Written by: Sebrina Eden

Fear Itself: the IRS and Filing From Abroad

My biggest fear as an author isn’t whether my books become popular or beloved. Don’t get me wrong, that is the dream and sometimes my brain likes to tell me it will never happen. But even if just one person enjoys what I put out there I’ll be happy.

No, my biggest fear – the one major thing that scares me into not writing is the American tax system. It doesn’t matter to the IRS that I haven’t lived in America or worked for an American company since before ’08. They still want to know everything about my finances and then some.

I have put off this dream career my entire life, or certainly since my 20s, because of this fear. Yes, I know I should have really only worried about it once I started selling and earning money, but – and this is a big but – even if I don’t have to pay taxes I still need to file if I make any money.

Filing from abroad is awful. I could pay someone on the IRS approved list of accountants in the UK their extortionate fees with money I don’t have or do it myself. When I was working, my husband and I would set aside a stressful weekend to do it all by hand. All because I couldn’t find an e-file that would accept my UK residence. Maybe it was me, I don’t know.

Either way, it’s daunting. All those forms so stupidly coded. The ridiculous math that spans not only multiple sheets but multiple forms. My anxiety would get so bad I couldn’t just sit through answering my husband’s questions. I would forever need to run to the bathroom to be ill.

It is terrifying. If you do it wrong and didn’t realise because the language is archaic and NOTHING is simplified you risk fines upward of tens of thousands of dollars. I don’t know anyone who has that kind of money. I certainly don’t. My husband certainly doesn’t.

So, rather than pursue my dream as an author, I’ve hidden from it. I half assed it, never finishing anything, but also talking about how much I wanted to publish. It was less anxiety inducing than the mere idea of fucking up my taxes and the IRS bursting through the door like an over-aggressive version of the Kool-Aide man and thus penalising my family and me.

I don’t know. All I know is with every step closer to publishing. Every step closer to potentially earning some money, even though logically I know I may never earn anything, I have a massive panic attack that stops me in my tracks until I can lie to myself enough to keep going.

That’s what I do. I lie to myself. I tell myself that maybe I can hire an accountant in the states. Maybe one my mom used when she owned a business, and we can do it all via skype. Is that even a possibility now that the pandemic has changed the way people work?

I also tell myself that if I make enough money I could apply for British citizenship and renounce my American citizenship. That way I only need to worry about taxes in one country. You know, the country in which I reside. It would remove every anxiety inducing barrier.

So, this is a plea to American authors with residency outside of the US or even with dual citizenship in any country that has a tax agreement with USA. How do you deal with the tax situation in the states? Is it really as terrifying as I’ve made it out to be in my head? Are you taxed twice if you earn more than $400 in the year? If you are taxed twice, is there anything left for you? Or is it all covered under foreign income exclusion up to a certain amount?