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Expatriate Tax Returns

Expat Tax Returns

10 Things Every Expat Should Know About Filing U.S. Taxes

U.S. expats are still required to file their taxes. If you have fallen behind, don’t worry, we can help.

Know Your Obligations – There are income thresholds and other factors that apply to expats.  Make sure you know what you are obligated to file to avoid an audit.

Note:  Most U.S. expats owe no money, but all are obligated to file.

  • Gather Your Documentation – Gather all your necessary documentation including prior tax returns, income records, interest records, benefits payments, and other tax materials. Having it all together will make it easier to prepare your taxes.
  • Understand Your Tax Forms – Research the process and make sure you are aware of all forms that apply to your situation.
  • Don’t Forget to File Your FBAR – If your aggregate account total is over $10,000 at any point, you will need to file Foreign Bank Account Reporting (FBAR), which is FinCEN Form 8938.
  • Know FATCA Requirements – You may need to report additional foreign accounts using the FinCEN form 114. Individuals with $200,000 on the last day of the tax year or $300,000 at any point during the year are required. For married couples filing jointly, the threshold is $400,000 and $600,000 respectively.
  • Catch Up with Streamlined Filing Procedures – Streamlined Filing Procedures are available to help those who failed to file their taxes for non-willful reasons.
  • File Your PFICs – Passive Foreign Investment Corporations (PFICs) include money market accounts, insurance products, and mutual funds. These may need to be filed using a Form 8621.
  • Avoid the Passport Revocation Law – If you owe over $50,000 to the IRS, you could be subject to the Passport Revocation Law.
  • Longer Audit Periods – The IRS increased the audit period from three to six years. Failure to file will increase your chances of an audit during this time frame.
  • Do Your State Tax Return – If you have connections to a U.S. state, know the filing requirements. You may have to file state taxes. Connections include possession of a mortgage, voter registration, or driver’s license.

If you have questions about filing your expat taxes, let us know. Expatriate Tax Returns provide solutions to help you stay legal, up-to-date, and make tax filing EASY for expats.

Expats 2019 Tax Filing Deadlines

Expats should plan to file on time to avoid tax-related headaches. Knowing when documents are due ahead of time will help you prepare. Don’t wait any longer. Instead, get acquainted with the 2019 U.S. tax deadlines for expats listed below.

  • Filing Deadline – Monday, April 15th, 2019

Most U.S. citizens recognize April 15th as Tax Day. This is the deadline for filing Federal Tax Returns. It’s also the deadline for filing your Foreign Bank Account Reports (FBAR). If you pay taxes in Maine or Massachusetts, then your filing deadline is April 17th because of the observation of Patriot’s Day and Emancipation Day.

  • Expat Extension Deadline – Monday, June 17th, 2019

It’s always recommended to plan to meet the earliest deadlines. However, if you are running behind, you can take advantage of an automatic extension available to expats. The extended deadline is June 17th. Interest will begin to accrue on any amount owed starting April 15th, so it is best to file sooner rather than later.

  • Final Expat Deadline – Tuesday, October 15th, 2019

If you filed for a final extension, then your expat taxes will be due by October 15th. You must have all forms including FATCA, FBAR, and other documents submitted by this date. You must submit your request by June 17th to utilize the final deadline.

With changes in tax law and a process that can be complicated, all expats are advised to prepare and file their taxes as early as possible. Don’t rely on extended deadlines. Expatriate Tax Services can help ensure that you file correctly and on time. Contact us today to learn more about filing your US taxes as an expat.

3 Major Myths About Expat Tax Filing

YOU DON’T HAVE TO FILE A US TAX RETURN BECAUSE YOU LIVE ABROAD

Not so!  US citizens and permanent residents must file a tax return no matter where they live or earn money, unless they do not meet the standard filing requirements.

IF YOUR FOREIGN INCOME IS BELOW THE FOREIGN EARNED INCOME EXCLUSION, FILING IN THE US IS NOT REQUIRED.

Totally false!  Although the FEIE (foreign earned income exclusion) allows expats to exclude $104,100 (2018) of their income, a return must be filed to claim this benefit.  Often times this exclusion is disallowed by the IRS if you wait too long to claim the benefit, so it makes good sense to file your return on time.

INCOME EARNED OFFSHORE IS NOT REPORTED ON YOUR US TAX RETURN.

Wrong!  US citizens and permanent residents must report their worldwide income on their annual filing which includes: compensation, business income, sale of assets, interest, dividends, and any other monies earned no matter how or where.

Contact us for complete answers to your expat tax questions!

TRUMPS TCJA (Tax Cuts and Jobs Act) and THE EXPAT

Expatriate Tax Returns Trumps TCIA and the Expat Tax Cuts and Jobs Act

Originally it was thought the tax relief was on the horizon for expats when President Trump’s new tax program was put into law, but the reality is that nothing is really different from the new rules that apply to all US taxpayers:

  • Tax Brackets
  • Standard Deduction
  • Personal Exemptions
  • Child Tax Credit
  • Mortgage Interest Deduction
  • State and Local Tax Deductions

The major change regarding international taxpayers is how Controlled Foreign Corporations are handled. Trump’s tax reform details a new category of corporate income called the Global Intangibles Low-Taxed Income (or GILTI), that requires recognition of a percentage of previously deferred foreign earnings and is now taxed as Subpart F income.

Current undistributed retained earnings are taxed at 15.5%, if held in liquid assets, and 8% if held in illiquid assets. This is a one-time tax and can be paid over 8 years.

Starting with your 2018 Corporate Tax Filing, everything is Subpart F Earnings.  Any income in excess of $102, 100 (or $204,200 if your spouse is active in the business) will be taxed at ordinary income rates.

Questions regarding your unique situation can be directed to Expatriatetaxreturns.com.

The Importance of Taking Risks to Experience Life

 

Taking risks is never the easy route to go. This is especially true when the risk is taking a journey that will change your life and your family’s lives. Becoming an expatriate and moving overseas for a year or two is certainly a risky decision. However, it is a decision that will allow you to reap the benefits of being an expat – living in a new part of the world and contributing to your company on a global scale.

Studies have shown that risk-taking is essential to business people’s success. In fact, American expats have written about how taking the risk and spending time overseas with their family has been one of the most beneficial moments of their professional journey.

 

Expat Taxes Best Price

 

Human beings naturally tend to view risk-taking negatively, often regarding it as dangerous and even unwise. Some risks don’t pay off, but those are usually the uncalculated ones. When you choose to become an expatriate, you’ll do it in a very calculated and intelligent way. This is called a calculated risk and it will pay off for you both personally and professionally. Taking a risk and becoming an expat will also help you stand out and present yourself as a leader and smart risk taker among your colleagues.

When you choose to become an American expatriate and travel overseas for your job, one of the most important things to remember during this calculated risk journey is to select the right accounting firm to handle your expatriate tax returns. ExpatriateTaxReturns.com is the industry leader for preparing the often-complicated tax returns of American expats. Fill out the simple form on our website or call us today at 877-382-9123 to get started.