Why Expats & Nomads Who Move Abroad Mid-Year Need To Amend Their Tax Returns
Moving abroad mid-year introduces exciting opportunities—and potential tax savings. One significant benefit for U.S. expats and nomads alike is the Foreign Earned Income Exclusion (FEIE), which allows you to exclude a portion of your foreign-earned income from U.S. taxation. If you moved abroad mid-year and didn’t claim the FEIE, amending your prior tax returns to include the partial-year FEIE could lead to substantial refunds.
Understanding the Partial-Year FEIE for Mid-Year Movers
The FEIE permits qualifying individuals to exclude foreign-earned income up to a certain limit, which adjusts annually for inflation:
2022: $112,000
2023: $120,000
2024: $126,500
If you moved abroad mid-year, you can claim a prorated FEIE based on the number of days you lived and worked overseas. For example, if you relocated on July 1, 2023, you could potentially exclude half of the $120,000 limit for that year, equating to $60,000. If you relocated in November or December, you could still see a significant refund.
Why Mid-Year Movers Should Amend Prior Tax Returns
Many expats who move abroad mid-year overlook the partial-year FEIE or mistakenly believe they don’t qualify, leading to overpayment of taxes. Amending your prior tax returns can:
Claim Missed Exclusions: Adjust your taxable income to reflect the time you were eligible for the FEIE.
Recover Refunds: Get back taxes you overpaid in previous years.
Ensure Compliance: Correct errors or omissions in your original filings.
You can amend your tax returns for up to three years from the original filing deadline. For example:
For the 2021 tax year, you have until April 15, 2025, to amend.
For 2022, the deadline is April 15, 2026.
How Big Cake Tax Helps Mid-Year Expats
At Big Cake Tax, we specialize in guiding expats through the complexities of U.S. taxation, including the partial-year FEIE for those who move abroad mid-year. Our services include:
Eligibility Assessments: Determining whether you qualify for the partial-year FEIE in current and past tax years.
Amending Returns: Reviewing and correcting prior filings to claim all eligible exclusions.
Maximizing Refunds: Helping you recover money you overpaid and keep more of your income.
Don’t Leave Money on the Table
If you moved abroad mid-year and didn’t claim the FEIE, you could be missing out on substantial tax savings. Amending your tax returns is a smart way to recover refunds and ensure your filings reflect all the benefits you’re entitled to.
Let us help you make the most of your expat tax situation. Schedule a consultation with Big Cake Tax today and let’s ensure more of your cake stays on your plate. 🍰