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Expatriate Tax Returns

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The Tax Implications Of Getting Married Or Divorced As An Expat

To start off, an expat is someone who lives in a foreign country for a prolonged period of time, usually for work or retirement. If you are an expat and considering getting married or divorced, it’s important to be aware of the tax implications that may arise from either decision.

The Tax Benefits of Marriage

If you are an expat and thinking about getting married, there are a few tax benefits that you and your spouse may be eligible for. For example, many countries offer a tax deduction for married couples. This deduction is usually based on the joint income of the couple and can result in a lower tax bill for the household. Additionally, married couples may also be able to file their taxes jointly, which can further lower their overall tax liability.

The Tax Benefits of Divorce

While getting divorced may not seem like it would have any tax benefits, there are actually a few situations where it can save you money. For example, if you get divorced and your spouse is the breadwinner, you may be able to file as head of household on your taxes. This can result in a lower tax rate and a larger standard deduction. Additionally, if you have children, you may be able to claim them as dependents on your taxes even if you are no longer married to their other parent.

The Tax Implications of Remarriage

If you get divorced and then remarry, there are a few things to be aware of from a tax perspective. First, if you remarry someone who is a non-resident of your country, you may no longer be eligible for the married couples’ deduction. Additionally, if you have children from a previous marriage, you may no longer be able to claim them as dependents if your new spouse also has children. Finally, if you have remarried and your new spouse has a higher income than you, it may push you into a higher tax bracket.

The Tax Implications of divorce for expatriates

If you are an expatriate and getting divorced, there are a few things to keep in mind from a tax perspective. First, you will need to file for divorce in the country where you are a resident. This can be a complicated process if your spouse is living in a different country. Additionally, you will need to divide up your assets and income in a way that is acceptable to both countries. This can be a challenge if you have investments or property in multiple countries. Finally, you may need to pay taxes in both countries on any income or assets that you receive as part of the divorce settlement.

So, what are the tax implications of getting married or divorced as an expat?

The tax implications of getting married or divorced as an expat can be complex. If you are thinking about either of these things, it’s important to speak to a tax professional to ensure that you are doing everything correctly. Additionally, be sure to stay up to date on the tax laws in both your country of residence and your spouse’s country of residence, as they may change over time.

If you want to learn more about tax implications, read our blogs or visit our contact page to connect with us.

Have You Received Tax Advice That Sounds Too Good to Be True?

Have you ever received an email from a “Nigerian Prince” offering you money? How about a mailer informing you that you’ve “won” $1.5 million? Or phone calls to discuss your car’s “extended warranty”? Sometimes it can feel like there’s a fraudster lurking around every corner. Most of the time, when we’re faced with a potential scam, our guard is already up. The red flags go off in our heads, and we get a gut feeling that tells us to proceed with caution.

But, when tax season rolls around, the red flags and gut feelings may already be naturally present. With an estimated 52% of U.S. adults feeling stressed and anxious about the tax-filling process, fraudsters are preying upon those fears – and they’re getting creative. Every year, the IRS publishes its “Dirty Dozen” list, which lays out the 12 worst tax scams. For 2022, the IRS has identified the following four transactions, which they categorize as “potentially abusive arrangements”:

  1. Misapplication of Charitable Remainder Annuity Trust (CRAT) rules to eliminate taxable gain.
  2. Misuse of tax treaties through Maltese (or other foreign) pension arrangements.
  3. Entering into fraudulent Puerto Rican or other foreign Captive Insurance transactions.
  4. Inappropriately using the installment sale rules by receiving proceeds through alleged loans.

These four schemes work by falsely manipulating the tax code. Fraudsters hope your eyes glaze over just reading the four items listed above. These fake “tax professionals” want you to believe they are here to help you when they are here to help themselves. If you’re part of the 61% of the population that hires a tax professional to prepare your taxes and correctly interpret the code, we are genuinely here to help. We can maximize deductions that legally lower your tax burden using our expert knowledge. If you’ve received tax advice that feels “too good to be true,” a second opinion may be worth it, especially when civil fraud penalties are on the line.

Foreign Housing Exclusion

If you are living abroad and are receiving income from your employer for housing, you may be eligible for the Foreign Housing Exclusion. Employers may offer housing funds directly to you or may include them as part of your overall income. Both options are acceptable qualifies for the exclusion for the deduction. Those who are self-employed can also receive the deduction. The costs of renting an apartment and repairs, utilities, and insurance are deductible. Extra expenses such as furniture, television, or home improvements are not eligible. The IRS calculates your Foreign Housing amount as the “expenses for the year minus the base housing amount.” Housing limits are enforced based on where you reside. Use form 2555 to calculate your amount. (https://www.irs.gov/forms-pubs/about-form-2555). Give us a call with any questions or concerns on this deduction in particular or any general tax information.
We look forward to speaking with you!

IRS Amnesty Program: Streamlined Filing and How It Helps Expats Pay Taxes

Expatriate Tax Returns IRS Amnesty Program 2018

Moving to a foreign country can be exciting. During a time when many expats are learning a new way of life, they may forget about old responsibilities. This can lead to overdue taxes. The IRS’s Streamlined Filing Procedures may be able to help.

How Does Streamlined Filing Work?

Today’s Streamlined Filing Procedures were introduced in 2012. The new system was intended to provide an alternative to previous programs, which missed the mark by excluding many of the expats who needed them.

Streamlined Filing Procedures encourage expats to catch up on their taxes. To do this, the program reduced the number of previous years’ returns that are required. In order to use the new procedures, you will need:

  • Federal Returns – You must submit three years’ worth of returns. These must be the most recent three years and can include amended returns.
  • FBAR Forms – Six years of FBAR forms are required. The FBAR is usually only needed if your non-U.S. bank accounts total $10,000 or more. Streamlined Filing Procedures require FBAR forms even if you have less than $10,000.
  • Signed Form 14653 – You must submit a Certification by U.S. Person Residing Outside of the U.S. statement that is signed. This will certify that you are eligible, have filed all FBAR forms, and that your failure to file taxes was not intentional.

Do I Qualify for Streamlined Tax Filing?

Restrictions were removed in 2014, which means that you may be eligible now even if you weren’t over five years ago. If you can produce the items listed above, you may qualify. You must show that you did not file because you were not aware that it was required.

If you have questions about using Streamlined Filing Procedures, let us know. Expatriate Tax Returns can help you navigate the U.S. tax system and get caught up on your financial responsibility.

Understanding the Tax Fairness for Americans Abroad Act of 2018

Expatriate Tax Returns Tax Fairness for Americans Abroad Act

The Tax Fairness for Americans Abroad Act of 2018 (H.R. 7358) was introduced last December. This legislation applies to anyone with a non-resident citizen status. Ending citizenship-based taxation would require rewriting almost all the current tax code. Instead, steps are being taken to help address issues for expats who live overseas.

What Does the Tax Fairness for Americans Abroad Act of 2018 Change?

If you qualify as a non-resident citizen, you are still expected to pay based on the core tax code. The Tax Fairness for Americans Abroad Act of 2018 changes the way your financial responsibility is calculated.

The Act adds Sec. 911A which amends the code to allow non-resident citizens to be taxed based on their United States-sourced income only. That means any income coming from foreign countries can be excluded.

Do I Qualify for Non-Resident Citizen Status?

You may qualify as a non-resident citizen if you meet the following requirements:

  • You are a citizen of the United States
  • You live in a foreign country which is your “tax home”
  • You are fully compliant through the previous three tax years
  • You are not a U.S. federal employee

You must also meet all requirements outlined by the bona fide residence or physical presence tests. If you meet the criteria, you can elect to receive non-resident citizen status. It’s important to remember that you must be in a non-resident citizen status to exclude the sale of personal property.

If you have questions about your status, let us know. Expatriate Tax Returns can help you learn more about your financial responsibility and U.S. taxes.

Here Comes August 8th… HAPPINESS HAPPENS DAY!

Expatriate Tax Returns Happiness Happens Day 2019

2019 marks the twentieth year anniversary of this exuberant holiday, so get ready to put that smile on your face!

This holiday is based on the premise that happiness is unlimited and contagious. It can bring a lot of joy to you and others.

While being happy can mean different things to different people, Happiness Happens Day encourages people to take stock of their lives and try to do or think about things that make them happy.

Here ‘s a few ways to celebrate this happy day:

  • Do something nice for yourself. Happiness begins at home.
  • Do something nice for others such as donating your time or money to your favorite charity.
  • Do something that is helpful to your community like volunteering to pick up trash, weeding, or mowing lawns.

During this time of strong political differences and a world of unrest, join us at Expatriate Tax Returns celebrating happiness every day. As we all know, a smile is worth a thousand words!