Atomik Research conducted a survey in January 2021, on behalf of H&R Block. They received a total of 503 responses from US expat living in countries like Japan, the UK and Mexico. It shows some surprising results.

Overall Results

• An exceptionally high percentage (76%) of US expats working abroad said they had been audited by the IRS because their tax returns were filed incorrectly.
• About 21% said they received no tax help from their employers while living and working overseas which created a barrier to filing their tax returns.
• A large percentage of people (63%) experienced difficulty with filling in their tax returns while only about 15% described themselves as confident when doing their taxes as an expat.
• About 75% of people who responded to the survey believed that earning a foreign income had a greater financial reward than working locally in the US.
• Three quarters of all respondents also believe that they are better risk-takers than their friends and family who did not venture abroad to live.
• Covid has also affected this cohort. Over a third of these US foreign workers thought about returning home to the US because their host country was badly affected by Covid-19.

Lifestyles of US expats

• Interestingly, about 27% of expats claimed earning enough to live a desired lifestyle in a foreign country came with unexpected complications.
• 21% stated that one of those complications was understanding the procedure of filing tax returns.
• Whereas about 26% believed they were safer from the pandemic in their host country than in the US.
• About 38% of respondents stated they had a better quality of life in their host country.
• 35% of people stated that they were in a better financial shape while living overseas.
• Covid-19 was the reason about 62% of respondents were thinking of returning to the US and giving up on the expat dream.
• Others still were prompted to increase their stints as expats. 82% of those who wanted to lengthen their time abroad expected to increase their time by a minimum of one year.
• US expats, while living overseas, were still achieving life milestones like: 30% were home buyers, 25% were changing jobs or switching careers and 23% were getting married.

Finances of the US Expat

• Three quarters of all respondents believe they will earn more money working overseas rather than in the US.
• About 20% believed that the tax concessions they received while working abroad allowed them to save more money.
• While 32% stated that affordable housing in their host countries facilitated better savings.
• 29% claimed affordable healthcare in the host country helped them make bigger savings.
• About 20% of respondents were affected by the pandemic by experiencing a wage reduction.
• 17% of people had to dip into their retirement savings to supplement their income during the COVID-19 pandemic.
• A large number of people (approximately 38%) had to find other jobs due to the economic changes experienced during the pandemic.
• Surprisingly, 33% claimed the pandemic changes led to a pay increase.
• More than 20% of respondents believed a tax planning financial product would be most helpful for US expats working overseas.
• Over one in five people stated currency management was a more useful tool as a means to manage their wealth.
• More than 20% claimed that a big financial barrier they’ve experienced while living and working overseas was the insufficient tax help from their employers.

Tax help for US Expats

• A large percentage of people claim to have been audited by the IRS for filing their taxes incorrectly while working overseas.
• Over a third of people had to pay fines greater than $500.
• Almost two thirds of people believe that filing their tax returns as an expat is difficult, whereas only 15% described themselves as confident when filing their returns while working overseas.
• A third of people claimed that in the time it took to complete their tax returns, they would rather be enjoying local culture or exploring the local sights.
• More than one third of people said that more information on the tax requirements of foreign-earned income would help them file their taxes more easily while living abroad.
• About 32% believed online help from a tax professional would help ease the process of filing their returns.
• 40% of people said they needed more information on which documents they were required to include in their tax returns to make filing their US taxes smoother while living and working overseas.
• Over a third of respondents wanted more information on rules that governed Foreign Earned Income Exclusion and how to qualify for it.
• 27% said knowing where to send their tax returns would be helpful when living and working abroad.
• Over 25% said easy communication with a tax professional who was based in the US, was important to them.
• Just under a quarter of respondents cited experience with filing taxes for other US expats as important when they were looking for tax advice professionals overseas.

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