December 27, 2021 Expats who haven’t heard of virtual mailboxes should read below to find out if having one could save them time and stress on their upcoming taxes.
Which Address Do Expats Put on Their Tax Returns?
For many Americans living abroad, the question of what address to enter on their tax return arises. At first, the answer seems obvious: use the address for where you are living. The address on your tax return should be a place where you can easily and quickly receive any correspondence the IRS needs to send to you. But what if the mail system is slow or unreliable in your country of residence? Or, what if you expect to relocate before you file your next expat tax return? Additionally, many US financial institutions require you to provide an actual US address (meaning, not a PO Box) in order to maintain your account.
Why Not Ask Your Family to Help Out?
For the above reasons, some expats choose to use the address of a friend or relative in the US. But beware, if that address is in a state with an income tax (which is the majority of states), this runs the risk that the state tax authority will contact you asking why you haven’t filed a state tax return – even if you’ve never actually lived in that state. Resolving the matter by proving your non-residence in the state can be a time-consuming and frustrating task.
“Sticky states,” like California, New Mexico, South Carolina, and Virginia will make this process even trickier. State residency factors vary by state, but can include living in the state during the tax year (at all!), your immediate family continuing to live in the state, if you return to the state every time you return to the US, if you have a permanent address in that state (for example, an abode setup), or if you have a driver’s license, ID card, or voting privileges in that state. Adding to your tax-filing responsibilities is not something you want to do, no matter how convenient it is to have your family help you out.
How Do Virtual Mailbox Addresses Work?
Rather than relying on friends and family to forward your mail, a better option is to utilize a virtual mailbox service. But what is a virtual mailbox—and how does it work exactly?
For a monthly fee, you receive a personal, non-PO Box mailing address. It is best to have an address in a state that does not have an income tax such as Florida or Texas.
When mail is sent to your virtual mailbox address, you are alerted via email. Upon your request, the mail is scanned or forwarded to you. Some services will scan the first page and email it to you so that you can choose whether to “open” the rest of it. Beware: fees may be based on the number of “openings.”
Benefits of a Virtual Mailbox for Americans Abroad
Using a virtual mailbox means you will have instant, reliable access to your US mail and can maintain your US bank accounts and maintain a US address while living abroad without the risk of triggering state tax inquiries. So, for many expats, the minor expense is worth the major hassle it can save during tax time—and throughout the rest of the year.
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FAQs
The most convenient way to maintain a functional U.S. address while living abroad is to use a virtual mailbox service that you can activate online. This service scans, holds, and offers mail forwarding services for a few dollars per month.
What is the best way to maintain a US address? ›
How to Keep an Address in the US
- Using the address of family members.
- Using the address of close friends.
- PO Box address from a large service provider.
- Mail forwarding address or virtual mailbox from various operators.
You can pay the USPS a high fee to send your mail overseas if you don't want to pay for a subscription or have your loved ones sift through your personal information. You could also sign up for the USPS forwarding service, which costs $21.10 in-store or $19.35 online. Each week of service incurs an extra fee of $21.10.
Can I keep my US bank account while living abroad? ›
It is possible to keep your bank account if you move abroad. However, you may face restrictions and higher fees when using your account internationally. Read on for what you need to be aware of and the best banking strategy for those who are moving abroad.
How do Americans avoid taxes when living abroad? ›
Under the 2022 FEIE, expats are permitted to exclude $112,000 of income earned abroad from their US tax obligation. Another provision to help avoid double taxation is the Foreign Tax Credit. This gives Americans a dollar-for-dollar tax credit for the taxes they've paid or owe to a foreign government.
How do I change my address when I move abroad? ›
If you are moving to an International address outside of the United States, you will need to fill out the same Change of Address (COA) form PS Form 3575 that is filed for a domestic move at your Local Post Office™.
How do I get a virtual address in USA? ›
How do I get a Virtual Address?
- Here's how to set up a virtual address:
- Choose a Plan. Our mailbox plans starting as low as $9.99 per month. ...
- Choose an Address. We offer over 2,750 real street addresses. ...
- Check Out. You can pay with a credit card or with PayPal, whichever is more convenient.
- File Form 1583.
This includes expats and digital nomads. Most of these Americans get their mail from the United States via the US Postal Service or a virtual mailbox service. The Virtual Mailbox Service is a mail forwarding service designed for expatriates.
Can I use a virtual address for IRS? ›
Yes, the IRS does accept virtual office addresses. This means you can use your virtual office address to receive important correspondence from the IRS and obtain an EIN. You can also use this address when filing tax forms or any other LLC formation and maintenance documents.
Can US mail be forwarded overseas? ›
The United States Postal Service will forward mail overseas for a fee. You can sign up for the USPS abroad mail forwarding service for around $21.10 in person or about $19.35 if you sign up online. For each week of service, there is an additional charge of around $21.10. The monthly fee for the service is about $84.40.
International bank accounts
Banks with an international presence may offer international accounts. For foreigners who don't have a US address, this can be a convenient alternative. You can open an account from your home country, so you don't have to fly to the US to set it up beforehand.
Can I have a US bank account without living in the US? ›
Having a checking account can be a way to build a solid foundation for your financial life in the U.S. Some non-residents sometimes believe they're ineligible to open a bank account in this country. Fortunately, that isn't true. Many financial institutions offer U.S. bank accounts for non-residents.
Do I need to tell my bank if I move abroad? ›
Always tell your bank when you're going abroad
This can be a major inconvenience, especially if you're in a foreign country and don't have access to your funds.
Do Americans living abroad get taxed twice? ›
Most commonly, corporate shareholders often face double taxation. Americans living abroad can also be subject to double taxation if they owe taxes to both the US and their country of residence.
Do Americans living abroad have to pay taxes twice? ›
While yes, U.S. citizens file a yearly tax return even if they live abroad, U.S. expats don't usually end up owing anything. While there is no overarching tax exemption for U.S. citizens living abroad, there are a variety of mechanisms in place to prevent Americans from being double taxed on foreign-earned income.
Do dual citizens pay taxes in both countries? ›
Being a dual citizen means that a person is considered a citizen/national of two countries at the same time, and is subject to both country's tax laws.
What is the standard US address format? ›
According to the USPS, an address should be formatted in three lines: the name of the receiver is in the first line, street address in the second one, and the city, state, and zip code in the third line.
How do I use a US address for shipping? ›
With a U.S. address for shipping, you can use this address to purchase items from U.S. stores and have them sent to the address. The package forwarder will take care of the rest. Once your package is sent to your U.S. address, the forwarding company will send your items to you by reshipping them worldwide.
