Quarterly Estimated Taxes for Expats: When You Need to Pay

If you expect to owe at least $1,000 in federal income tax after withholding and credits, you are generally required to make quarterly estimated tax payments or face an underpayment penalty. US expats working for foreign employers typically have no US withholding, which means they are responsible for making their own quarterly estimated payments to the IRS on April 15, June 15, September 15, and January 15. The estimated payment safe harbors work the same for expats as for US residents: you avoid the penalty if you pay at least 90% of the current year's tax or 100% of the prior year's tax (110% if your prior year AGI exceeded $150,000). Self-employed expats also owe self-employment tax on net earnings from self-employment, which the Foreign Earned Income Exclusion does not eliminate, and that tax should be factored into your estimated payment calculations. Payments can be made electronically through EFTPS, by check sent to the IRS, or through the IRS Direct Pay system, and all of these work from abroad though EFTPS requires some advance setup.