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Expatriate Tax Returns

American Expats

The 2023 US Tax Deadline For Expats: What You Need To Know

The change in the tax deadline is part of the Tax Cuts and Jobs Act, which was passed by Congress in December 2017. The Act includes a number of provisions that affect taxpayers who are living and working abroad.
The new deadline is intended to give expatriate taxpayers more time to comply with the new tax law. However, it is important to note that the deadline is not set in stone. The IRS could change the deadline again in the future.
If you are an expatriate taxpayer, it is important to be aware of the new deadline. This article will explain what you need to know about the 2023 US tax deadline for Expats.
What is the deadline?
The deadline for filing US expatriate taxes has been moved from June 15th to December 31st, 2023. This new deadline applies to both individual taxpayers and businesses.
What is the process?
The process for filing US taxes has not changed. Expatriate taxpayers will still need to file their taxes using the same forms and procedures as before.
What do you need to know?
There are a few things expatriate taxpayers need to know about the new deadline:

  • The deadline is not set in stone. The IRS could change the deadline again in the future.
  • The new deadline only applies to taxes owed for the 2023 tax year. Taxes owed for previous years are still due on June 15th.
  • The new deadline does not apply to state taxes. Expatriate taxpayers who owe state taxes will still need to file their taxes by June 15th.
  • The new deadline does not apply to taxpayers who are living and working in US territories. These taxpayers will still need to file their taxes by June 15th.

The benefits of filing early
There are a few benefits to filing your taxes early:

  • You will avoid the rush. December 31st is a busy time of year and the IRS is likely to be overwhelmed with last-minute filers.
  • You will avoid interest and penalties. Taxes that are paid late are subject to interest and penalties.
  • You will get your refund sooner. If you are owed a refund, you will get it sooner if you file your taxes early.

The penalties for not filing
If you do not file your taxes by the deadline, you will be subject to interest and penalties. The interest rate is currently set at 5% per year. The late filing penalty is currently set at 10% of the taxes owed.
If you want to learn more about tax updates, read our blogs or visit our contact page.

The Foreign Tax Credit: What You Need To Know For 2023

 

The foreign tax credit is a credit available to taxpayers who pay taxes to a foreign country. The credit is intended to offset the burden of double taxation, whereby a taxpayer is taxed on the same income by both the United States and the foreign country.

The credit is available to both individuals and businesses and is claimed on Form 1116. Taxpayers can elect to claim the credit either on a per-country basis or on a consolidated basis.

The credit is generally claimed on the taxpayer’s return for the year in which the taxes were paid. However, taxpayers can elect to carry the credit forward for up to 10 years.

If you are an expatriate taxpayer or a business with income from foreign sources, it is important to be aware of the foreign tax credit and how it can benefit you. Read on to learn more about the foreign tax credit and what you need to know for 2023.

Qualifying for the Foreign Tax Credit

To qualify for the foreign tax credit, taxpayers must have paid or accrued foreign taxes to a qualified foreign country. The credit is available for income, estate, and gift taxes, as well as for certain excise taxes. In order for the taxes to qualify, they must be imposed on the taxpayer by the foreign country and must be the legal and equitable equivalent of U.S. taxes. The taxes must also be paid in cash, and cannot be paid in the form of goods or services. Furthermore, the taxes must be imposed on the taxpayer’s income, profits, or gains from sources within the foreign country. And, finally, the taxes must not be reimbursed by the taxpayer’s employer.

Utilizing the Foreign Tax Credit

To claim the foreign tax credit, taxpayers must file Form 1116 with their tax return. The form must be completed and attached to the return in order to claim the credit. Form 1116 must include information about the taxpayer’s foreign income, foreign taxes paid or accrued, and the credit computation. Taxpayers must also attach documentation supporting the foreign taxes paid or accrued, such as foreign income tax returns, W-2 forms, or 1099 forms.

The Foreign Tax Credit and You

If you are a U.S. taxpayer with income from foreign sources, it is important to be aware of the foreign tax credit and how it can benefit you. The credit can help to offset the burden of double taxation, and can potentially save you money on your taxes. Be sure to keep good records of your foreign income and taxes paid, and consult with a tax advisor if you have any questions about claiming the credit.

2023 Foreign Tax Credit Changes

There are a few changes to the foreign tax credit that taxpayers should be aware of for 2023. First, the credit is no longer available for foreign real estate taxes. This change was enacted by the Tax Cuts and Jobs Act of 2017 and took effect in 2018. Second, the credit is no longer available for foreign-derived intangible income (FDII). This change was also enacted by the Tax Cuts and Jobs Act of 2017, and took effect in 2018.

If you want to learn more about tax forms, read our blog page or visit our contact page.

What You Need to Know About The Proposed Tax Bracket Changes For 2022

The United States has a progressive tax system, which means that taxpayers are taxed at different rates depending on their income level. The current tax brackets are 10%, 15%, 25%, 28%, 33%, 35%, and 37%.

For the tax year 2021, the income thresholds for each tax bracket are:

* 10% bracket: $0 to $9,875 for singles; $0 to $19,750 for married couples filing jointly

* 15% bracket: $9,875 to $40,125 for singles; $19,750 to $80,250 for married couples filing jointly

* 25% bracket: $40,125 to $85,525 for singles; $80,250 to $171,050 for married couples filing jointly

* 28% bracket: $85,525 to $163,300 for singles; $171,050 to $326,600 for married couples filing jointly

* 33% bracket: $163,300 to $207,350 for singles; $326,600 to $414,700 for married couples filing jointly

*35% bracket: $209,426 to $523,600 for singles; $418,851 to $628,300 for married couples filing jointly

*37% bracket: $532,600 or more for singles; $628,300 or more for marries couples filing jointly

Who will the tax bracket change affect?

The proposed tax bracket changes will affect taxpayers with an income of $200,000 or more. Under the proposed changes, there will be a new tax bracket of 39.6% for taxpayers with an income of $200,000 or more.

What are the proposed changes?

The proposed changes would create a new tax bracket of 39.6% for taxpayers with an income of $200,000 or more. The other tax brackets would be unchanged.

How will the changes impact you?

The changes would impact you if you have an income of $200,000 or more. If you are in this income bracket, you would be required to pay 39.6% in taxes on your income.

What can you do to prepare for the changes?

If you are in the affected income bracket, you can begin to plan for the changes by adjusting your tax withholding. You can also make adjustments to your budget to account for the higher taxes you will be required to pay.

Wrapping up

The proposed tax bracket changes would create a new tax bracket of 39.6% for taxpayers with an income of $200,000 or more. The other tax brackets would be unchanged. The changes would impact you if you have an income of $200,000 or more. If you are in this income bracket, you would be required to pay 39.6% in taxes on your income. You can begin to prepare for the changes by adjusting your tax withholding and making adjustments to your budget

If you have questions about your tax brackets or other tax information, visit our contact page to connect with an expert.

Tax Advice for Americans Living in South Korea

Are you an American living abroad in South Korea? South Korea is the next hotspot for American life considering its thriving economy. A common question many Americans living there ask is “should I file my taxes with the South Korean or US government?” Expatriate Tax Returns is here to answer your questions and help you with your tax needs.

If you are an American living in South Korea, Expatriate Tax Returns is the perfect company to file your taxes with. We service all people with American citizenship no matter their location. Filing with us is easy and our staff is happy to help answer any questions or resolve any tax concerns.

The South Korean tax calendar follows the same deadlines as the American format: January 1 to December 31. Tax returns must be filed by the 31st of May in the following year. The only difference is that residents in South Korea must pay 50% of their taxes by the 30th of November in the year that the taxes are due.

Americans living in South Korea must also file using specific documents. These documents include but are not limited to:

IRS Form 1040 (tax returns for individual income)

IRS Form 8938 (Specified Foreign Financial Assets; FATCA)

FinCEN Form 114 (Foreign Band and Financial Accounts FBAR)

Expatriate Tax Services is helping Americans all around the world. If you are in South Korea, a different foreign country, or even America, visit www.expatriatetaxreturns.com to connect with a professional tax specialist.

2021 Tax Returns: File and Avoid These Mistakes

 

Don’t miss the deadline! People who have not filed their 2021 tax return have a limited time to complete filing. The extension deadline is October 17, 2022. Learn about the best way to file and how to avoid common mistakes when filing under an extension with Expatriate Tax Returns.

The best way to file tax returns is electronically. Filing electronically is the quickest and easiest way to file since the submission will be immediate, the electronic system can detect form errors, and calculates data. Instead of waiting on the postage system to deliver tax returns or for approval on the filing submission, taxpayers can depend on accuracy and effectiveness by filing online. Filing online helps taxpayers avoid these common mistakes:

Misspellings

Names used for filing should match the spelling on the taxpayer’s Social Security Card and ID. Misspellings could prolong filing time and could disqualify the filing submission.

Inaccurate Information

Information such as the SSN, taxpayer income, address, and other information should be accurate and the exact same as what is printed on the associated documents. Online filing could help prevent submission rejection since the system can prevent mathematical errors.

Missing Information

Provide as much information as possible, especially if the online system is requesting such information. If any data is missing from the submission, preparers will have to collect the information which prolongs the filing process time and can disqualify the submission.

Visit www.expatriatetaxreturns.com if you have any questions or concerns about electronically filing 2021 tax returns under the October 17, 2022 extension deadline.

Checking the Status of Your Return

Once you file your taxes, you may be anxious to receive your return. The IRS has a tool that can help track your refund through the process. The “Where’s My Refund” tool is available on IRS.gov to all those who have filed.
There is also an app available for download called IRS2Go app. Users will need their social security number, tax filing status, and refund amount to utilize either tool.

The tool will provide three phases in which to track to refund:

  • Return received
  • Refund approved
  • Refund sent

When the status changes from received to approved, the IRS is ready to send your refund via your chosen method. Keep in mind that the tool is updated once a day, so set a reminder for yourself to check it and stay on top of your refund.