US Tax Consultants offers a free, no-obligation consultation through our website.

We specialize in taxes in both the United States and Spain, and we understand the difficulties and challenges of having tax obligations in both countries.

With deep knowledge of the double taxation treaty, as experts in both U.S. and Spanish taxation, we provide the best way to prevent problems.

A U.S. citizen who is a tax resident in Spain can benefit from using a single tax preparer for all their taxes for several key reasons, outlined below.

Key Reasons to Use a Single Tax Preparer for U.S. and Spanish Taxes

1. Compliance with Tax Laws in Both Countries and Consistency in Filing Obligations

• U.S. Taxes: U.S. citizens, regardless of where they live, must file a federal tax return (Form 1040) annually. The U.S. uses a citizenship-based taxation system, meaning U.S. citizens are taxed on their worldwide income, even if they live abroad.
• Spanish Taxes: As a tax resident in Spain, the individual is also subject to Spanish taxes, such as the Impuesto sobre la Renta de las Personas Físicas (IRPF), which taxes global income earned both inside and outside Spain.

Using a single preparer ensures that both filings are properly coordinated, leveraging tax treaties between the two countries and applicable deductions to avoid double taxation.

2. Optimization of Double Taxation, Applying Proper Credits and Deductions

Spain and the United States have a treaty to avoid double taxation, meaning certain income may qualify for tax credits or exemptions in both countries. A preparer familiar with both tax systems can maximize these benefits and ensure no overpayment.

The U.S. allows foreign tax residents to claim a Foreign Earned Income Exclusion (FEIE) or a Foreign Tax Credit (FTC) to reduce their U.S. tax burden. An experienced preparer can determine which option is more beneficial for the taxpayer.

3. Efficiency and Consistency

Working with a single preparer ensures that all information is consistently organized between both returns. This simplifies the transfer of data between U.S. and Spanish tax forms, avoiding errors or inconsistencies.

A preparer knowledgeable about both Spanish and U.S. regulations can quickly identify overlaps that may impact both systems, such as income from properties, foreign bank accounts, or international investments.

4. Management of Foreign Tax Obligations (FATCA), Including FinCEN Filings, Modelos 720 and 721, D6, and ETE

In addition to annual tax returns, U.S. citizens living abroad may be required to file additional forms, such as those under FATCA (Foreign Account Tax Compliance Act), which mandates automatic information exchange between European and U.S. tax authorities.

Examples include:

• FinCEN 114 FBAR (Report of Foreign Bank and Financial Accounts)
• Form 8938 (Statement of Specified Foreign Financial Assets)

Similarly, Spanish tax residents, regardless of nationality, must file informative forms such as the 720/721, D6, and ETE.

An experienced preparer ensures that all these obligations are met on time and correctly filed.

5. Reduced Risk of Errors and Penalties

The U.S. tax system is complex, and failing to comply with tax laws, even unintentionally, can result in significant penalties. Working with a single professional familiar with both jurisdictions reduces the risk of errors that could lead to fines or audits.

Coordinating both systems ensures that important details, such as applicable tax deductions, are not overlooked in either country.

6. Comprehensive Advice and Strategic Tax Planning

An expert in both tax systems can offer strategic tax planning and advice that not only ensures compliance but also optimizes the taxpayer’s overall tax burden.

This is particularly relevant for individuals with significant investments, properties, or income in both countries.
A tax preparer specialized in both jurisdictions can help plan the best way to manage income, investments, and wealth over time, minimizing global tax liability legally.

Summary

Using a single tax preparer simplifies and optimizes the tax compliance process in both countries. It ensures the taxpayer:

• Comply with all tax obligations.
• Takes full advantage of the benefits of the double taxation treaty.
• Avoids problems or penalties with tax authorities in both the U.S. and Spain.

This approach provides complete coordination, ensures compliance with regulations in both countries, and optimizes tax benefits and obligations in a safe and efficient manner.

Can I File Informative Returns Myself?
Yes, you can technically file them yourself; they are simply informational returns. However, the penalties for mistakes are significant, so it’s important to consider the risk of errors. As previously mentioned, the penalties are much higher than in other sanctioning procedures, and using professionals provides greater peace of mind.

Why Choose US Tax Consultants?

• Experience: We have 60 years of experience filing both Spanish and U.S. tax returns. Our expertise with forms like the 720 and others stems from many years of successful filings.
• Quality: The professionalism and experience of our team are guarantees. Our quality control processes prevent errors, ensuring that the information provided is correct and up to date.
• Client Follow-Up System: We’ve developed a specific email-based client information system for each type of filing. This ensures you’ll always know the status of your returns.
• Secure Payment by Credit Card: For convenience, you can pay securely by credit card.

What Should You Do Next?
It’s simple: Log in to the Client Area to upload the necessary documentation based on the checklist provided for each return, and we’ll start the preparation process. On our website, you can also find files to help you gather the necessary information.

At US Tax Consultants, we recommend centralizing tax preparation with a single manager, as this reduces the risk of errors by ensuring consistent information across all filings. That’s why we offer a comprehensive tax preparation service for both the AEAT and the IRS.