Americans in Norway: Is it worth paying for professional help with taxes?
Navigating two tax systems as an American living in Norway can be a headache-inducing process. So, is it worth shelling out for professional help? We asked our readers.
The US's citizenship-based taxation system is almost unique (hello Eritrea!), and forces Americans living abroad to file a tax return in two countries.
Thankfully, Norway's Skatteetaten tax agency makes paying tax as painless as possible (we're talking about the bureaucracy here, not your finances). But the inconsistencies between how Norway and the US tax income and wealth means that for Americans living in Norway, navigating the two systems can still be very complicated.
READ ALSO: The five worst tax traps for American citizens in Norway
So is it worth paying for help?
The vast majority of those who responded to our survey used some kind of professional help, with half paying 5,000 kroner or less to an online tax preparation company like H&R Block, or a tax preparation software such as Turbotax.
About a third paid a law firm, accountancy firm, or global mobility firm, such as PWC, KPMG, or Vialto, or Norwegian companies such as Magnus Legal or Codex Law, who can charge more than 15,000 kroner ($1,500) to get someone's tax affairs in order.
"It's necessary because being a US citizen with all my savings and retirement investments in the US, while living in Norway, makes both tax filings very complicated," explained Jay Frankel, an American who lives in Oslo, and uses Codex Advokat, who he said do "excellent work, but charge very high fees".
Ellen, who has been posted to Norway by her company, said it was “100 percent” worth getting advice. “I paid for it when I was only in the US, and now it’s even more complicated,” she said.
“Trying to figure out how to file the right forms in the correct way isn’t worth the stress,” agreed one anonymous respondent. “I filled out the forms myself for several years and was always scared that I had done something wrong because they are so confusing and use such complicated language.”
Another said that hiring a tax lawyer was “a financial burden I could do without.”
Andrea Nahrgang Imbsen, a former Olympic biathlete from Minnesota, said using an advisor helped prevent her from receiving fines for late filing.
“Otherwise, I would forget to do it. Next year, I’ll have to pay a lot more or risk fines as I’m a small business owner,” she said.
How complicated is it to submit both US and Norwegian tax returns?
Most respondents found filing their returns a daunting prospect, and a couple had been avoiding the issue for years.
“I will file in Norway for the first time year and am a bit worried,” said one anonymous respondent.
Another anonymous respondent said they had ended up paying taxes in both countries in their first year in Norway and had been “unsure of the process”. Another described it as "super complicated".
But others were less upset by it, with one saying that double filing was only “a minor yearly inconvenience”. “I’m not sure if I was affected badly. It just was a hassle,” said another.
What issues have people had with investments?
"I hate that they can tax my 401k [a way of diverting income into a tax-shielded pension] and HSA [a tax-shielded Health Savings Account]," Ellen complained about Norway's insistence on taxing capital gains inside tax-free saving accounts annually. "It completely defeats the purpose of those savings options."
But not everyone stuck to the law with one anonymous respondent saying they had simply not reported the contents of their US-based investment account.
"This is in violation of Norwegian tax law," they admitted.
One respondent, who did report their US investment account, said that they found this expensive and difficult because of the disconnect between the information Skatteetaten requires and that US brokerages provide.
"The greatest difficulty is that my retirement savings and investments are all in the US, and US banks and brokerages don't provide the information that Skatteetaten requires for filing Norwegian taxes," he said. "This means I must pay a huge sum to a Norwegian tax lawyer to translate my US brokerage documents into the numbers that Skatteetaten requires."
What issues have people had with bank accounts?
Some Americans have struggled to open bank accounts in Norway.
"My investment account at Sbanken was closed for further investments," said Mel, although she said she had managed to get DNB to open one up for her.
Several had struggled to open an account, with one saying it had taken them "an incredibly long time", with several banks refusing due to FATCA legislation, which requires them to report information about US holders of bank accounts to the US authorities.
"It took forever," agreed another. "My husband is current unemployed and they want to refuse to give him BankID."
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The US's citizenship-based taxation system is almost unique (hello Eritrea!), and forces Americans living abroad to file a tax return in two countries.
Thankfully, Norway's Skatteetaten tax agency makes paying tax as painless as possible (we're talking about the bureaucracy here, not your finances). But the inconsistencies between how Norway and the US tax income and wealth means that for Americans living in Norway, navigating the two systems can still be very complicated.
READ ALSO: The five worst tax traps for American citizens in Norway
So is it worth paying for help?
The vast majority of those who responded to our survey used some kind of professional help, with half paying 5,000 kroner or less to an online tax preparation company like H&R Block, or a tax preparation software such as Turbotax.
About a third paid a law firm, accountancy firm, or global mobility firm, such as PWC, KPMG, or Vialto, or Norwegian companies such as Magnus Legal or Codex Law, who can charge more than 15,000 kroner ($1,500) to get someone's tax affairs in order.
"It's necessary because being a US citizen with all my savings and retirement investments in the US, while living in Norway, makes both tax filings very complicated," explained Jay Frankel, an American who lives in Oslo, and uses Codex Advokat, who he said do "excellent work, but charge very high fees".
Ellen, who has been posted to Norway by her company, said it was “100 percent” worth getting advice. “I paid for it when I was only in the US, and now it’s even more complicated,” she said.
“Trying to figure out how to file the right forms in the correct way isn’t worth the stress,” agreed one anonymous respondent. “I filled out the forms myself for several years and was always scared that I had done something wrong because they are so confusing and use such complicated language.”
Another said that hiring a tax lawyer was “a financial burden I could do without.”
Andrea Nahrgang Imbsen, a former Olympic biathlete from Minnesota, said using an advisor helped prevent her from receiving fines for late filing.
“Otherwise, I would forget to do it. Next year, I’ll have to pay a lot more or risk fines as I’m a small business owner,” she said.
How complicated is it to submit both US and Norwegian tax returns?
Most respondents found filing their returns a daunting prospect, and a couple had been avoiding the issue for years.
“I will file in Norway for the first time year and am a bit worried,” said one anonymous respondent.
Another anonymous respondent said they had ended up paying taxes in both countries in their first year in Norway and had been “unsure of the process”. Another described it as "super complicated".
But others were less upset by it, with one saying that double filing was only “a minor yearly inconvenience”. “I’m not sure if I was affected badly. It just was a hassle,” said another.
What issues have people had with investments?
"I hate that they can tax my 401k [a way of diverting income into a tax-shielded pension] and HSA [a tax-shielded Health Savings Account]," Ellen complained about Norway's insistence on taxing capital gains inside tax-free saving accounts annually. "It completely defeats the purpose of those savings options."
But not everyone stuck to the law with one anonymous respondent saying they had simply not reported the contents of their US-based investment account.
"This is in violation of Norwegian tax law," they admitted.
One respondent, who did report their US investment account, said that they found this expensive and difficult because of the disconnect between the information Skatteetaten requires and that US brokerages provide.
"The greatest difficulty is that my retirement savings and investments are all in the US, and US banks and brokerages don't provide the information that Skatteetaten requires for filing Norwegian taxes," he said. "This means I must pay a huge sum to a Norwegian tax lawyer to translate my US brokerage documents into the numbers that Skatteetaten requires."
What issues have people had with bank accounts?
Some Americans have struggled to open bank accounts in Norway.
"My investment account at Sbanken was closed for further investments," said Mel, although she said she had managed to get DNB to open one up for her.
Several had struggled to open an account, with one saying it had taken them "an incredibly long time", with several banks refusing due to FATCA legislation, which requires them to report information about US holders of bank accounts to the US authorities.
"It took forever," agreed another. "My husband is current unemployed and they want to refuse to give him BankID."
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