As a Nigerian living and paying taxes abroad, you may have encountered the lament that you will end up paying taxes twice – in Nigeria and abroad. This is simply a reflection of the confusion and frustration many people face when navigating international tax systems.
For many in the diaspora, taxes often feel unfair, laced in jargon, and riddled with nightmare rules. It’s easy to feel overwhelmed, between understanding foreign income regulations and juggling obligations to loved ones back home. Hence, trying to stay compliant may feel like guesswork, and mistakes can be costly.
However, paying taxes is not only a duty, but a strategy. It’s empowering to understand how the system works, and play by the rules, regardless of whether you’re based in London or Houston.
The Tax Shock Abroad
Kemi was very delighted when she left Lagos for Maryland to pursue her Master’s degree. When she graduated and landed a promising tech job, she was unprepared for her first tax season.
She stared at her pay cheque in disbelief, as line after line of deductions chipped away at her earnings. It felt like her salary had been mugged by Federal tax, state tax, Social Security, Medicare, before it even reached her bank account.
When she got conflicting advice from her Nigerian friends, she eventually sought help from a tax professional. She was surprised to discover that she missed out on deductions, overlooked a foreign income clause, and was actually eligible for a refund.
Kemi now approaches tax season with confidence. Her journey is a reminder that when it comes to taxes, ignorance is not just inconvenient, but also expensive.
Paying Taxes for Nigerians Abroad
When it comes to taxes, living abroad doesn’t mean leaving your obligations behind. While the rules can be complex, understanding them remains key to staying compliant and protecting your future.
First, paying taxes is about where you live, not where you’re from. In the United States, both citizens and resident aliens, including green card holders, are required to report their global income. That means even money earned in Nigeria must be declared. In a similar approach in the UK, residents are generally taxed on both local and international income. You can get some relief, however, through claiming a special designation known as “non-domiciled” status.
Fortunately, Nigeria has made efforts to ease the burden. Through double taxation agreements with countries like the UK and Canada, you can avoid being taxed twice on the same income. But you can only take advantage from these treaties by filing.
And what about sending money home? Remittances to support family are not considered taxable income. But earnings from rental income, or business profits in Nigeria, must be reported in your country of residence.
The most important point is not to ignore taxes, which can be costly. Late filings, underreporting, or outright avoidance can jeopardize your immigration status. In both the US and UK, tax compliance plays a role in visa renewals and green card eligibility. So, it’s about safeguarding your life abroad.
Stay Compliant And Keeping More
Navigating taxes as a Nigerian abroad isn’t just about filling out forms, but building a strategy that protects your income and your future. And that starts with finding the right help.
A tax consultant who understands both Nigerian and foreign tax systems can be a game-changer. They’ll help you bridge the gap between two sets of rules, ensuring you don’t miss out on benefits or fall into costly traps.
But even the best advisor needs good records. So, keep track of every transfer, donation, and investment tied to Nigeria. Digital receipts, bank statements, and transaction logs aren’t just paperwork, and they matter.
When it comes to deductions, don’t leave money on the table. Whether it’s education credits, mortgage interest, or dependent claims, make sure you’re getting everything you’re legally entitled to.
And don’t forget the Nigerian side of the equation. If you’re earning rental income or running a business back home, you still need to file with the Federal Inland Revenue Service (FIRS). Living abroad doesn’t exempt you, and skipping this step can lead to penalties.
Finally, don’t wait for tax season to sneak up on you. Start early by reviewing your filings with a professional. Planning ahead means fewer surprises, smoother submissions, and more peace of mind.
Paying Taxes Is About Control
The truth about UK and US taxes for Nigerians abroad is that you can’t avoid the system, but you can master it.
Once you understand how money moves, you stop fearing taxes, and start managing them. So, are you guessing your way through taxes, or guiding your financial future? Have you faced tax confusion abroad? What helped you navigate it?
Share your experience below.
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