This article looks at US tax obligations for Americans living in Central America and reviews how Taxes for Expats supports expats in the region, including retirees, remote workers, freelancers, and small business owners.
Life in Central America comes with warm weather, lower costs, and a slower pace. What it does not come with is a break from the IRS. If you are a US citizen or green card holder living in Costa Rica, Panama, Belize, Guatemala, or elsewhere in the region, you still have to deal with US expat taxes every year.
For many, that means juggling local tax rules, foreign bank accounts, rental income back home, and confusing IRS forms.
Taxes for Expats (TFX) is a specialist firm that focuses solely on US expat taxes, including Americans living in Central America. This review looks at what TFX actually does, how it works, where it shines, and where you might want to think twice, especially from the perspective of someone building a life in Central America.
What Makes US Expat Taxes Different in Central America
Central America is attractive for US expats for three reasons that all have tax implications:
- Lower cost of living and potential tax incentives (such as pensionado or investor visas)
- Increasing number of digital nomads and remote workers
- A mix of cash-based and informal economies
For US tax purposes, though, three big ideas matter most:
- Citizenship-based taxation: The US taxes citizens and green card holders on worldwide income, even if you live full-time in Panama City or San José.
- Foreign Earned Income Exclusion (FEIE): If you meet residence or physical presence tests, you can exclude a chunk of foreign earned income (over $130,000 per year, depending on the tax year) from US income tax.
- Foreign Tax Credit (FTC): If you pay tax locally (for example, in Costa Rica or Belize), you may be able to use those taxes to offset your US bill.
Where Central America can get tricky is when local tax systems are territorial or relatively low. That can leave US expats with a remaining US tax bill, especially if they are self-employed or own businesses.
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Who Taxes for Expats Is Built For
TFX positions itself as a full-service solution for US expats and others with US tax obligations. Based on its own materials and multiple independent reviews, its core audience includes:
- Salaried employees working for local or US companies abroad
- Retirees receiving Social Security, pensions, and investment income
- Digital nomads and freelancers with global clients
- Business owners with entities in the US or offshore
- Non-US citizens with US income (property, investments, business)
For Central America specifically, that translates into:
- Retirees using pensionado-type programs but still receiving US pensions
- Remote workers around the region
- Surf instructors, tour operators, and small business owners with mixed US and local income
- Landlords renting out US property while living in Central America
How TFX Works From a Central America Perspective
The process is fully online, which matters if you are in a beach town with no local CPA who understands US rules.
The 5-Step Process
- Questionnaire and Account Setup. You complete an online intake form about income, residency, accounts, and assets. No in-person meetings; everything happens through a secure portal.
- Document Upload. You upload US and foreign tax slips, bank statements, local income records, and prior US returns. The portal remains as your long-term archive, useful if you move countries within Central America.
- Preparer Assignment. TFX only works with experienced CPAs and enrolled agents (each with 10+ years in expat tax). This is especially useful if you have local business structures, rental income, or complex residency questions.
- Preparation and Review. Your assigned preparer completes the return, and a senior reviewer checks it. They factor in FEIE, FTC, tax treaties (where applicable), and reporting like FBAR and FATCA.
- Final Approval and Filing. You review the return, ask questions, and approve. TFX can e-file or provide a file-ready PDF if you prefer to mail.
Typical turnaround is around 15 business days per tax year, with an expedited option if you are close to the deadline.
Pricing: What Will Central America Expats Actually Pay?
TFX uses flat-fee pricing, which removes much of the uncertainty associated with hourly billing. Based on common Central America expat profiles, pricing typically looks like this.
Retired in Costa Rica With a US Pension and Social Security
Most retirees without business income fall under a base federal return. Fees typically start around $450, assuming no complex investments or foreign entities.
Remote Worker in Panama With One Employer
Salaried remote employees generally fall between $450 and $610, depending on whether a state return is still required.
Freelancer in Belize With Multiple Clients
Self-employed expats usually require additional schedules. Straightforward freelance situations typically start around $525.
Small Tour or Service Business in Guatemala (Sole Proprietor)
Sole proprietors often fall in the $525 to $685 range, depending on reporting needs and state obligations.
Owner of a Foreign Corporation in Panama
Foreign corporate ownership triggers additional filings. Fees typically start at $1,000 or more, depending on complexity.
Behind on Several Years of US Tax Returns
Catch-up filings are usually handled through streamlined compliance packages, which typically start around $1,450.
These figures are indicative ranges based on public TFX fee structures. Exact pricing depends on individual circumstances.
Pros of This Pricing Model
- You know the cost before committing your time
- Most “normal” expats (salaried or retired) fit in the base fee
- Catch-up “streamlined” packages bundle multiple years and FBAR reporting
Potential Downsides
- Complex business structures (multiple entities, rentals in several countries, heavy investing) add forms and fees
- If your income is very low, fees may still feel high compared to do-it-yourself software
Strengths Highlighted Across Independent Reviews
Looking across multiple reviews and the TFX site, a few strengths come up repeatedly:
1. Expat-Only Focus
TFX does not handle domestic-only US taxpayers. That focus means preparers get deep repetition with issues like:
● Partial‑year moves to Central America
● Qualifying for FEIE via physical presence or bona fide residence tests
● Mixing US and local income sources
● Reporting foreign bank accounts and investment platforms
2. Experienced Staff
Reviews emphasize that returns are handled by seasoned professionals, not interns or seasonal hires. That matters when deciding whether FEIE or FTC is better in your specific country.
3. Process and Communication
Clients consistently note:
● Clear instructions and checklists
● Quick response times via portal and email
● Ability to reuse data year after year once set up
For Central America expats who may be moving countries or changing visa status, that continuity is valuable.
Weaknesses and Trade-Offs to Be Aware Of
No service is perfect, and a balanced review needs to address limitations:
- Cost for micro-budgets: If you are living very lean in Nicaragua or Honduras on a few hundred dollars a month, even the base fee can feel steep.
- Not a local tax advisor: TFX optimizes your US position. While they understand how local taxes interact with US rules, they are not a substitute for a Panamanian or Costa Rican tax lawyer if you are doing major investments or complex local structuring.
- Digital-only model: If you really want to sit across a desk with someone in your town, TFX will not give you that. All interactions are virtual.
How TFX Compares to Common Alternatives for Central America Expats
- Taxes for Expats: Expat-only focus, experienced staff, flat fees, streamlined amnesty, strong security.
- Local Accountant Only: Understands local rules, can meet in person, but generally no US expat expertise; can miss FBAR, FATCA, and FEIE.
- Big-Brand US Chains: Familiar brand names, some expat experience in larger offices, but often limited expat depth, more expensive, and rarely convenient from Central America.
- DIY Software: Cheapest upfront, flexible timing, but you must know which forms apply and there is a high risk of missed reporting.
For most US citizens settling or long-term traveling in Central America, the main comparison is between TFX and DIY. The decision comes down to:
- Your tolerance for risk
- How much you value your time
- Complexity of your income and accounts
Practical Tips for US Expats in Central America
Even if you decide to work with TFX or another specialist, there are steps you can take to make the process cheaper and smoother:
Organize your year as you go:
- Keep separate personal and business bank accounts
- Track all income (US and local) in a simple spreadsheet or accounting app
- Save receipts for major deductible expenses (travel for work, equipment, coworking)
Watch key thresholds:
- $10,000 combined in foreign accounts at any time → FBAR filing
- Foreign assets beyond FATCA thresholds → extra forms
- Substantial days in one country → potential local tax residency
Plan moves around tax rules:
- If using the physical presence test for FEIE, count your days carefully
- If changing countries within Central America, note the entry and exit dates
- Consider talking to a professional before big moves (selling a US property, setting up a foreign company, or taking a high-paying contract)
Conclusion
For US citizens and green card holders building a life in Central America, ignoring US tax obligations is no longer realistic. Automatic information exchange, stricter enforcement, and complex interaction between local and US rules make a “do nothing” strategy risky.
Taxes for Expats offers a middle path between expensive private tax lawyers and confusing DIY software. The firm’s expat-only focus, experienced staff, and clear, flat pricing make it particularly attractive for:
- Retirees with mixed US and local income
- Remote employees and contractors
- Freelancers and small business owners with simple or moderate complexity
- Anyone needing to catch up on several years of missed filings
