How To Find An Accountant For Americans Abroad — Types Of Tax Professionals (Part 2)

This is part 2 of a 3 part blog series to help you assess if you need to pay a tax professional to help you prepare your US tax return as an American abroad.

If you’ve read part 1, and decided that you’d like to pay someone your hard earned cash to prepare your US tax return for you, then this blog post walks you through the various types of tax professionals so that you’re aware from a consumer perspective how to approach looking for one, if that’s the road you want to walk down, and find one you can afford.

Stereotypical “working with an accountant” image

Table of Contents

• Reasons To Hire A Tax Professional
• Reasons Not To Hire A Tax Professional
• Why is it so hard to find a tax professional?
• Types of Tax Professionals
• Types of Expat Tax Firms or Services
• Tips To Find A Tax Professional
• Final words… Don’t Delay
• About the Taxpayer Advocacy Panel
• About the International Member of the Taxpayer Advocacy Panel

Reasons To Hire A Tax Professional

These reasons to hire a tax professional might seem obvious, but it’s worth reiterating some common sense consumer advice.

Only hire someone if you can afford it

It’s always recommended to figure out your budget, and stick to that budget. There are even free ways to file! And you don’t even have to be on a low income to be able to use free tax prep options, so consider free before consider spending any money at all. But when free still doesn’t cut it, and you need to hire a professional, figure out your budget and stick to it so that costs don’t skyrocket.

You’ve had a change in circumstances or an event triggering a tax reporting requirement

Moved countries? Sold a house? Had a kid? Had a death in the family and you need to settle their affairs? Just retired? Ideally, you’ll have sought advice before these large life events occur, but it’s not always possible to prepare for everything life throws at you. These are all great reasons to consult a tax professional and you’re not sure how to file your US tax return in the year these one time events occur. Caveat: if you use this method, keep in mind that forms can change year to year, so be sure to check the form instructions. Sometimes there are big rewrites to the tax code like in 2017 when the Tax Cuts & Jobs Act passed, it changed many standard forms significantly the following tax filing year. We expect another big tax bill in 2025, which will impact the 2026 tax filing year, so keep this in mind for the future. A tax professional will be staying up to date on these changes, so keep in mind this risk of not catching changes to rules that could impact your return.

You have a particularly complicated tax filing situation

Have a US trust? A non-US trust? Own a business? Complicated investments? Have a non-US pension not recognized by the US? Live in a country without a US tax treaty? These are all potentially reasons why you may want to hire a tax professional on an ongoing basis to file your US tax return. Some of the most common issues I hear from international taxpayers are people who have a non-US trust or own PFICs (Passive Foreign Investment Companies). The IRS estimates that the forms for non-US trusts (Forms 3520A and 3520) and PFICs (Form 6421) takes about 50 hours each to complete, and that’s just those specific forms, it doesn’t include the other forms of your tax return! In which case, it’s worth outsourcing these complicated filings and the time burden to a tax professional to do it for you.

Reasons Not To Hire A Tax Professional

When you sign a tax return with your name on it, you are responsible for the accuracy of your own tax return, regardless of whoever prepared it for you.

Treating a tax professional like audit insurance

Another issue I encounter is that people will pay a tax professional with the mentality that it’s an insurance policy in case the IRS decides to audit you, and that the professional will take liability if the return is filed inaccurately since they prepared it for you. This is not legally accurate. When you sign a tax return with your name on it, you are responsible for the accuracy of your own tax return, regardless of whoever prepared it for you. I get that people will pay a tax professional to ensure that it’s filed accurately if they don’t trust themselves, that totally makes sense. People who have complicated returns especially don’t have the time to learn all of the rules so it makes sense to “outsource” preparation of your return to give you the peace of mind it’s being prepared correctly and accurately. Just be aware that tax professionals shouldn’t be treated as audit insurance. If you want audit insurance, it does exist, although most people don’t need it.

“Pay the problem away”

As explained, if your name is on the tax return, then the accuracy is your responsibility. I know that even thinking of taxes keeps some people up at night, and it’s well known that many people experience high levels of anxiety and stress around tax filing season. So many think that throwing money at the problem will fix it. I’ve heard reports from multiple people over the years who spent a whole month’s salary on an accountant to file their US tax return. Not only is this extreme, it’s not a good solution to spend money outside your means.

Paying for services that a professional is not qualified to advise on

You wouldn’t pay an electrician to do a plumber’s job so why would you pay an investment advisor for tax advice? Be clear on what professional services the company or individual that you’ve engaged is capable of providing. A tax preparer won’t be able to advise you on what retirement plan is best for you from a tax perspective, but they should be able to tell you how you’ll be taxed on a specific pension product. This may seem like the same question, but the nuance is important to make sure services match expectations.

I’ve talked to a number of professionals across the finance industry who are not qualified to give tax advice or services, but given how little knowledge there is in the market on US expat taxes, and they are sympathetic, they do their best to try to assist. The issue with this is that they are not qualified to give advice outside of their qualifications, and no matter how well meaning, can cause huge problems later down the line. So before engaging a professional, make sure that the person or company you’re paying is qualified to give the advice or assistance that you seek.

Paying more means you’ll get better advice

I come across people frequently who think if they spend a higher amount of money on a tax professional compared to others, that this increases the likelihood of it’s accuracy and decreases the chances of an audit. In theory, this should be the case. But in practice, this doesn’t always happen. International taxpayers have particularly complex tax returns, and it is well documented that the complexity of maintaining tax compliance from abroad is particularly challenging. I have heard stories from Americans abroad who spent a lot of money on tax prep services with large international firms, but later found out the return was prepared incorrectly, coming at an additional huge expense to correct. I have also heard from people who use stateside tax professionals who have prepared returns for Americans abroad incorrectly, again having to spend large sums on additional tax prep services to rectify.

Why is it so hard to find a tax professional?

Before I go further, I really want to explain what’s going on in the market right now. There are a few market conditions contributing to the difficulty that Americans abroad experience in finding a tax pro.

There are three main reasons why it’s so hard to find a tax professional:

• More people are retiring from the profession than ever before
• Less people are entering the profession than ever before
• There are very few expat specialist tax professionals

First, more people are retiring from the profession than ever before. This is due to Baby Boomers retiring but also since the Tax Cuts & Jobs Act (TCJA 2017) passed, it made filing taxes more complicated than it was previously. A number of tax professionals I spoke to around 2018/2019 were planning to retire anyway, but some retired early because it just wasn’t worth relearning the new processes required. Pre-2018, filing taxes didn’t change all that much from year to year. But from 2018 onwards, there have been significant changes to the tax code that impacted on the way that tax returns are filed. Many tax pros are having to relearn how to file each year to ensure they’re filing for their clients correctly.

As filing taxes has gotten more complicated, so has the appeal from a professional perspective. This brings us to less people are entering the profession. That’s right, less students are going to school to study accountancy due to a lack of interest from young people. So the pool of professionals to choose from is getting smaller from entry to exit.

Third, add to the mix that on top of the shortage happening from within the US, there has never been a huge volume of expat specialist tax professionals in the first place. The pool of expat specialist tax pros has also suffered from retiring professionals and no one new entering the field. I’ve gotten more emails in January this year compared to past years of people looking for a new accountant after theirs just retired at the end of last year. I’ve also talked to a number of expat specialist accountants who don’t give out business cards anymore and aren’t taking on new clients. They’re desperate to retire, but feel too guilty about retiring without passing on their client list to someone who can take over. Other accounting firms I’ve talked to aren’t taking on new clients as they’re already at capacity.

I get complaints from people saying that their accountant has doubled or even tripled their fee from the year before. Given demand exceeds supply, they can get away with charging more, even if it seems unfair. Some firms use this as a tactic to offload trouble clients, and at the end of the day, they can choose who to work with and who not. Additionally, people complain to me that their tax pro doesn’t provide a good level of customer service. I know it is not ideal to pay a lot of money and not receive a good level of service, but at the end of the day, if you have an accountant, you should count yourself lucky in the first place.

To say the accounting field is in crisis is an understatement. This is compounded by the fact that there have never been enough expat specialist accountants in the first place, and the situation is only going to get worse. Over a third of accountants are considering leaving the field over the next 5 years. So if you know of any young people, this is a booming field full of opportunity to encourage them to enter.

I hope this knowledge helps set your expectations appropriately for finding a tax professional. Now that you’re aware of the market conditions, we can look at the types of tax pros that are available.

Types of Tax Professionals

The tax field is not a one size fits all profession. There are a range of tax professionals, and it’s important to be aware of which do what so that you know how to approach a professional when looking to engage their services. Below is a list of the types of professionals available in the market.

Enrolled Agent (EA)

An Enrolled Agent (EA) is a tax practitioner who is federally authorized by the U.S. Department of the Treasury. EAs don’t have a specific educational background, but they must pass a three-part exam and pass a background check. They also need to do continuing professional education to maintain their EA status. EAs aren’t able to give tax advice (unless they are also a CPA.) So if you’re trying to figure out the best way to save for your kid’s college education, an EA wouldn’t be able to recommend to you the best kid’s savings products in the market. But an EA can prepare your tax return, and they would be able to answer specific questions on how certain things are taxed. For example, if you asked them how a child savings account in your country of residence is taxed, they should be able to answer this.

Certified Public Accountant (CPA)

While an Enrolled Agent is approved by the federal government, a CPA is approved at the state level. Usually CPAs have to pass a four-part state exam and obtain 150 credit hours of education usually in the form of a Bachelor’s degree in accounting at a college or university. CPAs are able to assess your financial goals and recommend financial products to help you achieve those goals. From money management, financial planning, setting up a business to tax planning, they can specialize or have a wide range of financial and tax expertise to assist you. Some offer tax preparation services while others don’t, it’s not a one size fits all profession. Ask what a CPA’s areas of expertise are before engaging them. If you’re reading this article, you’ll potentially look to engage a CPA that specializes in expats. It all depends on what kind of services that you’re looking for, so before hiring a CPA, just make sure that the services they offer match the services you seek.

CPA vs. EA — which is best for you?

https://smartasset.com/retirement/enrolled-agent-vs-cpa

Be clear on what services you need, and make sure that the professional you reach out to is able to provide those services. Not all CPAs prepare tax returns, for example. Some people will be dual qualified — they’ll be a CPA AND an EA. Just keep in mind that someone with more qualifications will charge more. If you only need someone to prepare a tax return for you and you don’t have a complicated situation, you most likely don’t need a CPA to prepare your tax return and an EA will do the job to save on costs. But if you need tax advice, then hiring a CPA might be a better fit for your situation.

Tax Attorney

To be clear, most people will never need to engage a tax lawyer in their lifetime. I frequently get emails from people asking for recommendations for a tax lawyer or attorney to prepare their tax return, when I actually think they are asking for a tax return preparer. Although there are law firms that prepare tax returns, they will charge higher fees compared to a CPA or an EA. This is because tax attorneys usually work with people who require legal advice and they’ve had more education, they are lawyers after all! Some examples where you may want to engage a tax attorney includes representing a taxpayer at tax court if in dispute with the IRS, advise on the legal structuring of a complex estate, or advise on the legal structure of an international business. It is usually best not to engage a tax attorney for standard tax return preparation services in order to save yourself money.

Financial Advisor

A US financial advisor is someone who can advise in investments, debt management, budgeting, saving for college, retirement planning, estate planning, insurance, and tax planning. Some financial advisors also prepare US tax returns. Financial advisors that also prepare tax returns will typically also be qualified as a CPA, EA, or hold Tax Certification from the National Association of Certified Public Bookkeepers. You may even come across someone that is dual qualified in your country of residence and the US. Just be sure that you understand what their qualifications are and it matches the services that you seek. Depending on if you hire a financial advisor just to prepare your tax return or to advise you, will depend on the cost and how they charge. Some will charge based on a commission, some will charge a fee, and some will charge a combination of commission and fee depending on the services you hire them to do.

Wealth or Investment Manager

A wealth or investment manager do not offer tax preparation or tax advice services. These are not the kind of people that you’ll want to engage with for your taxes. Wealth and investment managers sell and/or advise on financial products. Although these professionals will have a certain level of awareness of the tax implications in your country of residence and the US when selling you the products, this doesn’t always happen. If you are engaging a wealth or investment manager, then this individual should consult with your tax professional — whether it’s an EA, CPA, or otherwise — in order for you to be aware of the tax consequences before you buy.

Types of Expat Tax Firms or Services

Tax prep companies come in all different shapes and sizes so it’s important to understand the different types so you know what you’re money is getting you. I’m going to focus on expat tax firms in particular, since these tend to provide the best services for Americans abroad.

Online Firms

Online firms tends to be some of the most cost effective given they don’t have an office to pay for, therefore have lower operating costs. Their staff work remotely often all over the world and are expats themselves, so they tend to have a better understanding of tax filings for Americans abroad. Some of the most well-known firms in this space include Greenback, Expat Tax Online, and Bright!Tax, but I would also throw ExpatFile and MyExpatTaxes into this category since they have an option to upgrade to have an accountant review your return before it’s submitted to the IRS.

Dual Qualified Professionals

These types of tax professionals are usually some of the best, and it’s because they went to school twice! They have a US qualification as well as another country’s tax prep or accounting qualification. Frequently these are dual qualified accountants, but some are also dual qualified tax preparers, lawyers, or financial advisors. They are some of the brightest and most passionate about the work they do, it’s not just a job, it’s a living. There’s nothing better than knowing the person doing your taxes actually enjoys doing your taxes! Just be aware, that with two qualifications also means that these types of professionals also charge more.

Also keep in mind that not all countries have dual qualified professionals. For example, the United Kingdom and Canada has a good pool of dual qualified tax professionals given there is a large US expat population living in those countries, but in places like Spain or Cameroon, dual qualified professionals simply don’t exist since there aren’t as many expats living there.

US Based Firms

Out of all of the types of firms that specialize in expats, this is the category that has the most firms available in the market. This makes sense given most expats start in the US then move abroad. Many people move back to the US after living abroad, but continue to have bank accounts or pensions abroad so require ongoing assistance to ensure non-US accounts and income are reported correctly. I’ve talked to many people who stick with the accountant they used before they moved abroad, but frequently stateside accountants that don’t specialize in expat taxes can fall short or miss something that can hit you later down the road. Unless your family accountant specifically says they specialize in expat taxes or your tax situation is extremely simple, it is best to look at switching to a firm that has a better understanding of expat taxes for when you move abroad.

H&R Block and Taxes For Expats are some of the top firms that come to mind, however there are many others that come in all different shapes and sizes. Be sure to research the firm before contacting them, so you know what you’re getting into and you can set your expectations accordingly. As well, some of these firms list their pricing on their website, and some don’t.

The top thing I hear from people using stateside accountants is that even those who say they are expert in expat tax, later down the line the taxpayer found that something wasn’t done right, and frequently these are expensive mistakes to rectify. Filing expat tax returns can be very complicated, even for tax professionals that specialize in it! So it’s not always their fault, especially if you didn’t tell your accountant about something that could impact your tax filings.

Equally, I’ve found stateside accountants not ask basic questions, like if the FBAR is required or not, that have led to expensive mistakes. The best thing to do before enlisting a tax professional is to make sure you are clear on what services you want, and also do some research on what forms your return may need to include. When you begin preparation with a new tax professional for the first time, it will aid the conversation to ensure that nothing is omitted and all bases are covered.

The Big Four Firms

PwC, KPMG, Deloitte, and EY — these are the big dog accounting firms with an office in every country or major city around the world. They work with international corporations who send employees on two year work assignments all over the world, and these employees usually get tax prep services included in their relocation package provided by one of the big four. Although it’s great that these employees don’t have to pay out of pocket, often I speak to those who decide to stay living abroad after the initial 2 years or leave the company but stay living abroad, so they need to pay for tax prep services out of pocket for the first time. Frequently, these individuals ask the big four to do it for them since they are used to using them, and are shocked at big four prices — rarely is it less than four figures, even for a simple return.

It is worth a reminder that just because a firm is expensive, doesn’t mean they’re going to do a better job. Some of the worst horror stories I’ve heard from Americans abroad are from those who paid big bucks to one of the big four, and received the wrong advice. Later down the line, these individuals found out, and had to pay high prices at an additional cost to another firm to correct the mistakes the big four made. If your previous employer paid for you via one of the big four, but the honeymoon period ends and you have to pay yourself, it’s usually better to move away from the big firms than to get stuck with unnecessarily high tax prep costs and risk inaccuracies.

One Person Firms

These individuals are people with one of the following backgrounds:

• A tax pro who worked for a big firm and then went solo.
• A tax pro who worked for a stateside firm then moved abroad so they started their own firm to earn an income.
• Some used to work at their local embassy’s tax attaché before the IRS pulled funding in 2015, so these tax pros liked where they were living and didn’t want to leave, so instead of returning to the states they started their own one person firm and stayed put.

All of these types of one person firms can provide a good level of service, keep in mind they’ll also be familiar with dual taxes for the US and your country of residence which can be a major bonus. They also tend to be some of the most reasonably priced tax pros since they have no staff and the cost of your service goes directly to them. Some of the drawbacks are that they’re only one person so they can only take on so many clients and can only spend so much time on customer service since they have to balance time with their other clients.

Tips To Find A Tax Professional

1. Decide on your budget, and stick to it

How much can you afford to spend? I find people often start randomly calling up accountants to try to gauge pricing in the market and once they’ve talked to a few (expensive) tax pros, determine that they need to spend more than they had initially thought. The issue is that prices vary wildly in this space, all due to the different types of tax pros available and your personal circumstances for what forms are required or not.

Preparing your taxes can be free, if you’re willing to do it yourself. And filing yourself isn’t as bad as you probably think it is. It is worth trying yourself, at least once, to better understand the process. This also helps you ask better questions when interviewing tax pros if you do decide it’s too hard and you want to go down that route.

Prices for online tax prep software range from free to hundreds of dollars, while tax professionals will charge hundreds to thousands, so just be sure to set your expectations accordingly.

2. Figure out what you need

Two things to consider when assessing your tax prep needs:

1. What forms do you need the tax pro to prepare for you?
2. What’s the minimum level of customer service you’re ok with?

Go back and look at your previous year’s tax return, and write down a list of tax forms (in the top right-hand corner of some pages.) When you call up tax pros to ask for how much they charge, give them the list of forms you need done, and this will enable them to give you a better quote. Keep in mind that during the tax pro’s assessment of your situation if it is revealed that you require additional forms, the price may go up. Many tax pros charge a fixed price per form at least, if not an hourly rate.

Also think about what level of customer service you’d like to receive and how you’d like those services to be delivered. Are you ok with an online tax pro who you can email but won’t do calls to save on costs? Or do you want someone you can go in and meet with face-to-face to discuss your taxes? The quality of customer service you seek will also drive the price up. Keep in mind that tax pros charge less where less customer service and ongoing communication is required. If you’re going to call them up every day, or on April 15, just be aware they’ll look to charge you for their time.

3. Speak to at least 3 tax professionals

Don’t go with the first person that you find, or your friend’s accountant that they recommended, be sure to get at least 3 quotes to compare options. There are no price comparison websites for expat tax professionals unfortunately, so you’ll have to do it the old fashioned way and sample the market and then go with the one you’re most comfortable with. That said, if you can’t find someone in your budget, then keep looking, there is always someone in your budget but given the limited selection of tax pros in the market, you just need to keep looking.

Another caveat, don’t let any tax professional pressure you into services you don’t feel comfortable with. If speaking to a professional and they bring to your attention the upcoming filing deadlines, that’s one thing, but if they try to pressure you into buying a service you’re not sure you need, that’s another. There are some firms that use unethical high pressure scare sales tactics in this space, so be aware someone may try this on you.

4. Speak to at least 2 references or read reviews online

If it’s a small company, there won’t be any online reviews to see if others are happy with them, so ask the tax pro if they can provide two client references you can speak with. There are also a bunch of American abroad online forums to talk about taxes, so you can ask there as well. Some of the bigger firms are on TrustPilot or Feefo, so check there too.

5. Do not use someone who doesn’t have a qualification

One of the first things you should ask when you first approach a tax professional is what qualifications they hold. If you engage an accounting firm and they assign the processing of your return to a trainee, that’s ok, but make sure that whoever is supervising their work has the correct qualifications to prepare and file the return on your behalf.

6. Check the professional has the qualification they claim to have

One of the best ways to check if someone has a qualification is to check the IRS Tax Return Preparer Directory. This is the only official list from the IRS listing tax professionals with a Preparer Tax Identification Number (PTIN) who can prepare a tax return for a client. There will be something similar for your country of residence, whether that’s through the tax agency or from a professional organization’s member directory. As detailed in the previous section, not everyone needs an attorney, or a CPA, but checking to make sure they have the qualification they claim to have is easy and a no brainer as a first step to selecting a tax professional.

Final words… Don’t Delay

Whether you decide to hire a tax professional, file yourself, or use online tax prep software, the best thing you can do is to just get filing your taxes over and done with as soon as you can. I know taxes aren’t everyone’s cup of tea, but they are unfortunately a fact of life. One can only stick your head in the sand for so long before you have to face the music, and most people I hear from that suffer the most are those who have postponed for too long where it starts to negatively impact their finances. And as scientific evidence suggests, stress causes you to age faster. So it’s better to bite the bullet and get it done sooner rather than later so you can spend your life living life rather than prolonging stress and anxiety! Filing your taxes is often not as bad as many people think it is, and once you get over the hump, you’ll feel better once it’s done and out of the way for the year too!

In part 3, I will talk about options available to search and find tax professionals for Americans abroad. Stay tuned, part 3 will be published soon!

About the Taxpayer Advocacy Panel

The Taxpayer Advocacy Panel is a United States Federal Advisory Committee whose mission is to listen to taxpayers, identify taxpayers’ issues and make suggestions for improving IRS service and customer satisfaction. TAP is comprised of approximately 75 members who volunteer to serve a three-year term, and represent all 50 states, District of Columbia, Puerto Rico and a member to represent U.S. Citizens living or working abroad.

About the International Member of the Taxpayer Advocacy Panel

I am originally from Ohio, went to college in Wisconsin, and moved to London, United Kingdom to do my masters and upon completion was offered a job, and so I stayed. 17 years later, I am married to a Brit, run a UK company, and volunteer to help Americans abroad in tax advocacy work. My three-year term on TAP started in 2022 and ends 2024. I serve on the Special Projects Committee for TAP, which is the committee that handles international issues within the IRS. I am not an accountant, which makes me a minority on TAP, in addition to being the only member on TAP not in the United States, my unique perspective helps bring clarity to the issues, prioritize problems, and provide solutions. You can contact Rebecca on tapinternational1 at gmail dot com