Helping U.S. Citizens Living in Panama
Tax Services For Expats
Are you a U.S. citizen living abroad? If YES, you are REQUIRED to file a US tax return reporting your worldwide income by June 15th.
This woman owned business started twenty years ago.. one client at a time…and has grown to help thousands.
Tax Services For Americans Living In Panama
Tax planning and preparation services for small businesses and individuals. Let our experienced CPAs and EAs take care of all your tax needs, from individual filings to comprehensive business returns. We provide a seamless, stress-free tax experience.
Individual Tax Returns
U.S. citizens living abroad have the same tax filing requirements as those residing in the US. Federal. State and City rules apply…we are there to guide you through the process, as it applies to your unique situation.
Business Tax Returns
Over the years, we have helped hundreds of small business clients. Whether located domestically or abroad, tax filings are mandatory. Calculating taxable business income is not an easy chore and requires understanding US and foreign tax rules…you can depend upon us to calculate the correct US bottom line and the tax that applies.
FBARS & Form 8938
Have you accumulated more than $10,000 in foreign banks or financial institutions? If so, we want to make you aware of the FBAR guidelines to ensure you file a complete return…on time, every time.
Expatriates in Panama
U.S. Consular Services in Panama
Working Abroad in Panama as an American Citizen
Panama is a premier destination for U.S. expats, offering a tropical climate, a lower cost of living, and a modern infrastructure fueled by the Panama Canal. Whether you are a “digital nomad” in Panama City or a retiree in the highlands of Boquete, the country offers a unique “Pensionado” program that provides significant discounts on utilities and services. While Panama uses the Balboa, the U.S. Dollar is legal tender, making the transition seamless for many American citizens.
Challenges for Expats in Panama
Territorial Tax System
Panama operates on a territorial tax system, meaning it generally only taxes income earned within its borders. However, because the U.S. taxes on worldwide income, you must still report your Panamanian earnings and bank accounts to the IRS, regardless of whether Panama taxes them.
The Foreign Earned Income Exclusion (FEIE)
Panama does not have a formal income tax treaty with the U.S. to prevent double taxation. Instead, U.S. expats in Panama typically rely on the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit (FTC) to reduce or eliminate their U.S. tax liability.
Reporting Requirements (FBAR & FATCA)
Panama is a global financial hub. If you hold more than $10,000 across Panamanian bank accounts at any point in the year, you are required to file an FBAR (FinCEN Form 114). Additionally, under FATCA, Panamanian banks often report account information for U.S. citizens directly to the IRS.
Social Security and the Lack of a Totalization Agreement
There is currently no Totalization Agreement between the U.S. and Panama. This means that if you are self-employed or working for a Panamanian company, you may be subject to social security taxes in both countries. We can help you navigate these contributions to ensure you aren’t overpaying.
Our Services for Expats in Panama
At Expatriate Tax Returns, we specialize in the specific nuances of the U.S.-Panama tax relationship:
- FEIE & Foreign Tax Credits: Maximizing your exclusions to ensure you owe little to nothing to the IRS.
- FBAR & FATCA Compliance: Expert guidance on reporting your Panamanian financial assets.
- Pensionado Tax Consulting: Helping retirees understand the tax implications of their Panamanian residency status.
- Business Filing: Tax preparation for Americans running businesses or investing in Panamanian real estate.
Quick Checklist for Panama Expats
| Requirement | Detail |
| U.S. Filing Deadline | June 15th (Automatic extension for expats) |
| FBAR Deadline | April 15th (Automatic extension to October 15th) |
| Panama Tax System | Territorial (Only local income is taxed) |
| Currency | U.S. Dollar / Panamanian Balboa |
EASY AS 1, 2, 3
You have questions? We have the answers! Contact us and complete our client census. You will get a response within 24 hours. Our team is never intimidated by a challenge. We provide answers, while others ask questions.
Click on Start Now
Expatriate Tax Returns understands the importance of filing your taxes quickly and correctly. You complete our organizer, so we know what questions to ask.
Submit Your Info
Collect “What We Need” from the template you will receive from the Expatriate Tax Return advisor.
Begin Filing Process
We will assign a preparer to begin your tax return filing process. Help you file the right returns, using the right forms, and providing all of the right information.
Individual & Business Expatriate Tax Returns
We can quickly walk you through the expat tax return preparation process, ensuring you get filed on time, in no time. As friendly professionals with over a decade of experience, we make expat tax return preparation easy. Furthermore, no matter your needs, we have the answers to your tax questions from expatriate tax return planning to preparation. Contact us today.
Need to file your Expat taxes?
Expatriate income tax planning and preparation, offering tailored solutions for late filers, small businesses, and partnerships.
Expert CPAs and EAs
Why Choose Us
U.S. PROFESSIONALS HELPING U.S. CITIZENS ABROAD
We are available 24/7 to answer your tax filing questions.
EASY TAX RETURN FILING
Easy as 1, 2, 3! File your taxes in 3 simple steps.
ARE YOU A U.S. CITIZEN LIVING ABROAD?
If YES, you are REQUIRED to file a tax return reporting your worldwide income by June 15th.
Get Free Copy of Expat Tax Guide “A” to “Z”
Get the essential American Expat Tax “A” to “Z” guide that covers all the details of expatriate taxes. Understand everything you need to know about navigating the complexities of expat tax obligations with this comprehensive resource.
Testimonials
Frequently Asked Questions
Yes. The U.S. taxes its citizens on worldwide income, regardless of where they live. Even if you reside in Panama full-time and your income comes entirely from Panamanian or other foreign sources, you must file a U.S. Federal Tax Return
if you meet the minimum income thresholds.
Generally, no. Panama operates on a territorial tax system, meaning they only tax income earned from activities performed within Panama. Foreign-sourced income, such as U.S. Social Security, U.S. pensions, and dividends from U.S. stocks, is typically exempt from Panamanian income tax.
No, there is no formal income tax treaty between the United States and Panama. This makes it even more important to use mechanisms like the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC) to prevent double taxation on any income that is earned locally in Panama.
While the Pensionado Visa is famous for its “lifestyle” discounts (like 25% off utility bills and 50% off movie tickets), its main tax benefit is confirming your residency under Panama’s territorial system. It allows you to enjoy your U.S. retirement income tax-free in Panama, though you still must report that income to the IRS.
If you have one or more bank accounts in Panama (or any other foreign country) and the total balance across all those accounts exceeds $10,000 at any point during the calendar year, you must file FinCEN Form 114 (FBAR). Panama’s status as a banking hub means the IRS pays close attention to these filings.
Most likely! If you are a U.S. citizen working remotely from Panama City or the beaches, you can often use the Foreign Earned Income Exclusion to exclude a significant portion of your earnings from U.S. taxation, provided you pass the Physical Presence Test (living outside the U.S. for 330 full days).
