It is certainly possible to prepare you own tax return and to save money in doing so. But the risks are great, indeed, including having to pay steep penalties for unintentionally providing incorrect information or neglecting to submit certain forms required for expat specific tax returns. There is also the risk of not knowing you need to prepare certain forms that must be filed independently of your federal tax returns, which can carry severe penalties for non-compliance (such as FinCEN Form 114/FBAR). The U.S. tax code is extremely complex, and as one example, we have included an excerpt* from a recent inquiry received by a panicked tax filer:
“I’m hoping you can help me regarding a letter I received from the IRS. I attempted to do my taxes by myself. It seems I made a mistake on my Form 2555/2555-EZ, and just received a bill for $4,000. I should not have to pay anything given the amount I made last year was low enough to qualify for the foreign income exclusion. Is there anyway I can correct this? Please help!”
*Some details changed to protect the individual’s identity.