You may however qualify to exclude some or all of your foreign earned income from U.S. taxation if you meet certain tests. The “foreign earned income exclusion” (“FEIE”) allows a general exclusion of up to USD 101,300 for tax year 2016; this amount is adjusted annually for inflation. In addition to (or in lieu of) the FEIE, you may elect to exclude from income a housing cost amount based on your foreign housing expenses (the “housing cost exclusion”). To claim these exclusions, you must meet certain requirements. Our tax experts can guide you to ensure you are eligible to claim FEIE and housing exclusion.
Leaders in US
Expat Tax Preparation
Our sole focus is tax return preparation and providing advisory services to Americans living abroad. From simple tax returns to very complex tax returns, we have the expertise to guide you in any situation and give you the piece of mind you need.
- US Individual tax return and filing
- State Tax Return and Filing
- FBAR filing (Report of Foreign Bank and Financial Accounts)
- FATCA Reporting and Advisory
- Tax Filings for American business owners abroad
- Delinquent Taxpayer filing
- Audit support in case of IRS audits
- Retirment planning and IRA’s
- Investment Planning
- Tax consulting and advice
US INDIVIDUAL TAX RETURN AND FILING
If you are a U.S. citizen or Green Card Holder who lives and works outside the United States, you still have a requirement to file your US individual income tax return annually and include your worldwide income on the tax return.
FBAR (Report of Foreign Bank and Financial Accounts)
Declaring bank accounts abroad with the aggregate value of over $10,000 has been required of US citizens and residents for many years and in recent years the law around foreign bank account reporting has become more complex and non-compliance with respect to this reporting will lead
Declaring bank accounts abroad with the aggregate value of over $10,000 has been required of US citizens and residents for many years and in recent years the law around foreign bank account reporting has become more complex and non-compliance with respect to this reporting will lead you monterary and non-monetary penalties. As a general rule, foreign bank account reporting does not have any tax implications rather it is only disclosure of your foreign bank accounts. Foreign Bank Account Reporting submission due date is June 30th for the year previously ended on December 31st and there is no extension avaialble to submit the required forms. Speak to one of our experts to understand your obligations in respect of reporting your foreign bank accounts.
STATE INCOME TAX FILING
Generally, states impose tax only on individuals who are residents of the state or individuals who have had income from the state which is above a certain threshold. If an individual is a resident of a particular state and then moves abroad, such individual will most
likely be treated as a part-year resident for the year of the move and will most likely be required to pay tax at least on the portion of income allocated to the period in which they were a resident. In some states, you may have a filing requirement if you own a property in the state or if your family members live in that state. Speak to one of our experts to understand your state tax filing obligations.
TAX FILING FOR AMERICANS WITH BUSINESSES ABROAD
If you are a US citizen or Green Card Holder and own a business outside the US, you may have seperate filing requirements to go along with filing of your personal tax return. Certain U.S. individuals who own more than 10% of stock in a foreign corporation must include additional
forms (Form 5471) with their federal tax return. In general, Form 5471 assists the IRS with gaging the scope of a U.S. taxpayer’s foreign holdings that may facilitate U.S. tax deferral. The form is useful for keeping track of the earnings and profits of U.S. owned foreign corporations, determining whether a foreign entity is a controlled foreign corporation (“CFC”) generating so-called “subpart F income” (generally passive-type income of a CFC that a 10% U.S. shareholder must include currently in gross income), and tracking possible IRC Section 956 inclusions (i.e., investments in U.S. property by CFCs that can trigger a current inclusion in a 10% U.S. shareholder’s gross income).
Our tax experts can help with filing of your business taxes abroad and assist with filing requirements which are requird to be included as part of your tax return.
FATCA was enacted in 2010 and the objective behind FATCA is to combat offshore tax evasion by requiring U.S. citizens to report their holdings in foreign financial accounts and their foreign assets on an annual basis to the IRS. The IRS requires certain U.S. citizens to report the
total value of their “foreign financial assets.”
In order to further enforce FATCA reporting, starting 2015 foreign banks were required to report the balances in the accounts held by customers who are U.S. citizens. It is this renewed effort by the U.S. government to combat offshore tax evasion through FATCA that has led to a recent surge in tax compliance efforts by U.S. expats. We have experience in combating FATCA and can advise you on the steps you are required to take in order to be compliant with FATCA rules.
Since the enactment of FATCA, foreign banks have began reporting the account balances of their U.S. citizen and Green Card holder customers to the IRS (either directly or to the local tax authority that then reports the information to the IRS under an IGA). As a result, the risk of
U.S. expats being detected by the IRS has increased significantly. Therefore, it is highly recommended that U.S. expats who are delinquent on their U.S. tax return filings, come forward and seek the help of a qualified tax professional in order to take advantage of the programs currently available.
The IRS is currently running a special program (Streamline Filing) for delinquent taxpayers where there may only be a requirement to file the last 3 years of tax returns and last 6 years of foreign bank accounts and by doing so, taxpayers position with the IRS will be fully up to date. Speak to our tax experts to under Streamline Filing and how you may be able to file under this special program.