Should I hire one firm to file my U.S. taxes and another firm to file my taxes in my host country?
To answer this question, let’s use a medical analogy: If you have a toothache and a foot problem, do you look for a dentist who is also a podiatrist or do you talk to two separate specialists? The same go for taxes. If your U.S. tax specialist is well-versed in expat returns, they should certainly know everything about tax issues specific to your host country and how they should be integrated into your U.S. tax return.
Let's look at the U.K. as an example. While you can probably find one or two firms that specialize in the dual-filing of U.K. and U.S. taxes, the fees they charge will likely be somewhere between obscene and ridiculous. The reason for this is simple: while there are thousands of Americans in the U.K. who need to file taxes in both countries, the number of competent tax preparers who can file in both is minuscule. And truth be told, there is nothing special about U.K. (or any foreign country) as far as the IRS is concerned. All taxes paid abroad are counted in the same way whether they’re paid in the U.K. or Ukraine. The same works for National Insurance, ISA contributions, QROPS, council tax, and anything else that you might think is unique to the U.K.
The only real upside to hiring one accountant to deal with both tax systems is reduced communication. But do you want to pay three or four times the price for the same service just to deal with one professional instead of two? It’s a personal decision, but one you should make knowing exactly what you’re going to be paying for.
If you’re not sure where to start to find a good accountant in your host country we can help. With clients in 175 countries, we’ve developed strong relationships with local firms around the globe who can prepare your local (non-U.S.) tax return. All the firms we partner with have been recommended by other clients and vetted by us. Please get in touch with us so we can assist.