H&R Block Expat Tax Survey 2023

At H&R Block Expat Tax Services, we care about more than just filing your expat taxes for you — we strive to give Americans abroad the confidence and guidance they need to make smart overseas financial and tax decisions. We already knew that U.S. expats around the world face unique challenges, especially when it comes to financial choices and taxes — but we wanted to dig in a bit further to see the whole picture.

In early 2023, H&R Block Expat Tax Services surveyed U.S. expats living around the world about their finances, lifestyle, and tax situations. Together, they represent a snapshot of perks and challenges of life as an American abroad, and how that life can affect a U.S. tax return and financial well-being.

What we found is that while expats experience a high quality of life, managing U.S. finances and tax responsibilities can hinder the carefree, adventurous lifestyle they left the States to pursue. Americans abroad have considerable unexpected challenges when it comes to taxes and financial wellness — for example, we found that 76% of surveyed U.S. expats say they’ve been audited by the IRS for incorrectly filing their taxes while working abroad, and 32% of those who said they had to pay fines said they paid more than $500.

The good news is that H&R Block is here to help. See the rest of our insights below, and when you’re ready to get your expat taxes in order Block has your back. Get started with our made-for-expats online tax prep today.

U.S. citizens abroad on lifestyle perks and challenges

Living in another country certainly has its perks, but it also can have its complications. We found that expats abroad love the adventurous lifestyle but say they are somewhat unprepared for managing their finances — which can hinder enjoying that lifestyle.

• Nearly 3 in 4 (74%) respondents consider themselves more open to taking risks in life when compared to their friends and family in the U.S. who have not lived abroad.
• 38% of surveyed U.S expats said their quality of life has improved while living in a foreign country.
• 35% said their finances improved while living in a foreign country.
• The major life events respondents plan on going through while living and working abroad are:
  • 30% – Purchasing a home
  • 25% – Switching careers/jobs
  • 24% – Having a job
  • 23% – Getting married
• More than a quarter (27%) of U.S. expats say making enough money to keep up a desired lifestyle is an unexpected complication when living in another country.
• More than 1 in 5 (21%) said an unexpected complication of living in another country is understanding how to pay taxes.

COVID–19 impacted expats abroad, just as it did millions of Americans in the U.S.:

• More than a third (36%) of U.S. expats considered going back home because their host country is heavily affected by COVID–19.
• 26% said staying in their host country is the safest option during the COVID–19 pandemic.
• 62% of respondents considered shortening their time abroad because of the COVID–19 pandemic.
• Of those who considered lengthening their time abroad because of the COVID–19 pandemic, 82% of respondents expect to extend their time living and working abroad by a year or more.
• Nearly 1 in 5 (19%) said they had a reduction in pay due to the economic changes in 2020 related to the pandemic.
• Nearly 1 in 5 (19%) said they had to work while ill because they did not have paid sick leave due to the economic changes related to the pandemic.
• 17% of respondents said they had to take money directly out of retirement savings due to economic changes in 2020.
• 38% said the economic changes in 2020 led to them finding a new job.

U.S. citizens abroad on taxes and finance

One of the biggest challenges for U.S. citizens abroad is staying compliant with the IRS and the U.S. government. For example, we found that three out of four surveyed U.S. expats say they’ve been audited by the IRS for incorrectly filing their taxes while working abroad, and 32% of those who said they had to pay fines said they paid more than $500.

• 63% of respondents feel it is difficult to file their taxes as an expat.
• More than a fifth (21%) of U.S. expats said a financial barrier they’ve encountered while living and working abroad are employers not offering tax help.
• Only 15% of respondents would describe themselves as confident when filing their taxes as an expat.
• More than 1 in 5 (22%) say tax breaks have allowed them to save money while living and working outside of the U.S
• Outside of tax breaks, 32% said affordable cost of living abroad allowed them to save money, and 29% said affordable healthcare abroad allowed them to save money.
• More than a fifth (21%) of U.S. expats said a financial barrier they’ve encountered while living and working abroad are employers not offering tax help.
• 30% of surveyed expats said they would immerse themselves in the local culture (15%) OR discover breathtaking landmarks (15%) if they did not have to spend time filing taxes.
• 40% of surveyed U.S. expats wish they had more information on which financial documents (e.g. foreign bank account statements, W2s, etc.) they needed to include when reporting taxes while living and working in a foreign country.
  • 1 in 3 (33%) wish they had more information on income tax rules to qualify for the Foreign Earned Income Exclusion.
  • More than a quarter (27%) simply wish they had more information on where to send their tax filing paperwork.

Need help filing U.S. taxes as an American abroad? We’re here for you each step of the way.

Navigating the alphabet soup of tax forms can be difficult enough for Americans living Stateside and throwing in international tax forms makes it a bit more convoluted. The good news is U.S. citizens abroad have said they benefit from expat-specific tax breaks, and H&R Block has an entire Expat Tax Resource Hub dedicated to helping expats understand their filing options.

Need help? Don’t stress — taxes for expats are complicated, but we’ve got your back. If you’re all set and ready to file with us online, go ahead and start the process with virtual Expat Tax Preparation from H&R Block Expat Tax Services today!

_{H&R Block commissioned Atomik Research to run an online survey of 503 United States expatriates living abroad. More than three-fourths of the respondents are living in the United Kingdom, Mexico, or Japan. The margin of error fell within +/- 4 percentage points with a confidence interval of 95%. The fieldwork took place between January 15 to 21, 2023. Atomik Research is an independent creative market research agency.}