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Expatriate Tax Returns

Expat Tax Returns

The Top Tax Implications For Expatriate Taxpayers

As an expatriate taxpayer, you may be required to file taxes in both your host country and your home country. This can create a number of complications, especially if you are not aware of the tax regulations in both countries. To make things easier for you, we have compiled a list of the top tax implications for expatriate taxpayers.

Residency Status
The residency status of an expatriate taxpayer is an important factor to consider when filing taxes. Depending on the residency status, taxpayers may be subject to different tax laws. The two most common residency statuses are resident and non-resident. As a resident, you may be required to file taxes in the host country on your worldwide income. Whereas, as a non-resident, you may only be required to file taxes in the host country on income sourced from there. It is important to understand the residency status of each expatriate taxpayer in order to accurately file taxes. Depending on your residency status, the taxes you owe may be different.

The Foreign Earned Income Exclusion
The Foreign Earned Income Exclusion (FEIE) is an important tax benefit available to expat taxpayers. It can significantly reduce the amount of taxes that expats owe in their home country. Under the FEIE, expats can exclude up to $105,900 of their income from being considered in US taxes. This can be a significant saving, since expats may otherwise be required to pay taxes in both countries on their worldwide income. In order to be eligible for the FEIE, expats must pass the Physical Presence Test. This means that they must be present in a foreign country for at least 330 days in a consecutive 12-month period. They must also be bona fide residents of that country for a full calendar year. Expats must be mindful of the Physical Presence Test to take advantage of the FEIE.

The Foreign Housing Exclusion and Deduction
In addition to the FEIE, expats can also take advantage of the Foreign Housing Exclusion and Deduction. This can significantly reduce their taxable income in the host country. The Foreign Housing Exclusion allows an expat to reduce their taxable income in the host country by the amount that they spend on housing in the foreign country. The Foreign Housing Deduction allows an expat to further reduce their taxable income by deducting a percentage of their housing expenses, up to a set limit. In order to take advantage of the Foreign Housing Exclusion and Deduction, expats must be able to show that their housing expenses are reasonable and necessary. Additionally, they must be able to show that their housing expenses were incurred in their host country. This is important to remember, as the Foreign Housing Exclusion and Deduction are only applicable to expats living abroad, not those living temporarily abroad.

The Physical Presence Test
The Physical Presence Test is an important requirement for expats who wish to take advantage of certain tax benefits. It is also important to ensure that expats are in compliance with host country tax laws. The test requires an expat to be present in a foreign country for at least 330 days in a consecutive 12-month period. They must also be bona fide residents of that country for a full calendar year. It is important to consider the Physical Presence Test when filing taxes as an expat. If you do not meet the requirements, you may not be eligible for certain tax benefits or even in compliance with host country tax laws. It is important to be aware of this requirement to ensure your taxes are filed accurately and to ensure there are no penalties.

Taxation of Gifts and Inheritances
When filing taxes as an expat, it is important to consider the taxation of gifts and inheritances. Gifts and inheritances may be subject to different tax regulations in both the host and home countries. Generally, expats may be required to report the value of any gifts and inheritances that are brought into their host country, as this is considered to be taxable income. Additionally, gifts and inheritances may be subject to death taxes in the host country. It is important to consider the taxation of gifts and inheritances when filing taxes as an expat. Depending on the tax laws of both countries, you may be required to report and pay taxes on any gifts and inheritances that you receive, so it is important to make sure that you are aware of the laws in both countries.

Conclusion
If you are an expat and plan on filing, visit our contact page to connect with our tax specialist. We want your taxes to benefit you and your refunds to be hefty.

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.

Lookout for 1099-Ks if You Received Over $600

Be mindful of your taxes! The IRS sent out another reminder and notice for independent workers. Expatriate Tax Returns has the information you need for filing your taxes.

Taxpayers who sold goods or provided services that received over $600 from digital transactions will receive a Form 1099-K. This is a significant change in amount compared to previous reporting threshold requirements and is required to be reported on your tax return.

Taxpayers must make estimated tax payments if the following applies:

  • Generally, if a taxpayer earns income throughout the year
  • If the withheld income tax from one’s salary or pension is not sufficient
  • If other forms of income such as dividends, interest, alimony, capital gains, awards, and/or income from self-employment are received
  • If the taxpayer is in business for themselves

Taxable income qualifications remain the same. Taxpayers who earn income from jobs (full-time and part-time) and sales are still required to file for those amounts. Money from relatives, friends or other personal expenses is not usually taxable.

If you have more questions about tax filing your taxes visit www.expatriatetaxreturns.com.

The IRS Warns Taxpayers About Increasing Texting Scams

Text messages themed like IRS announcements are on the rise according to the Internal Revenue Service. Thousands of scammers have already attacked taxpayers in 2022 through MMS and SMS text messages. Scamming through text messages is known as Smishing. Many smishing campaigns are often masked as Covid relief announcements, help establishing an IRS account, or tax credits. Expatriate Tax Returns has the best advice for you to protect yourself against phishing.

While observing October’s Cybersecurity Awareness Month, it is crucial to be cautious about scams. Smishing technology is now industry standard and can put thousands of people at risk. The messages often ask people to click a link in which phishing websites collect personal information. Taxpayers should never feed these databases with their personal information, especially since the IRS would never contact taxpayers through text message. Mark these messages as scam if your phone has flagging features.

The IRS noticed the increase in phishing in the fall of 2020. The best action to take when dealing with phishing is reporting it to phishing@irs.gov. In order to submit an effective report where the IRS can take action, provide the phone number, email address, along with the date and time the phisher reached out. In addition to reporting to the IRS, report to the Internet Crime Complaint Assistant (www.ic3.gov) and Expatriate Tax Returns (www.expatriatetaxreturns.com).

If you have more questions on what to look for during this time of increasing smishing, visit www.expatriatetaxreturns.com to connect with expert tax specialists.

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.

Tax Day 2022

Monday, April 18, is Tax Day 2022. Tax Day is the deadline to file your taxes or file for an extension. Don’t let this day approach without a plan to file. Expatriate Tax Services is here to assist you with your tax filing. No matter how complex your situation may be, we can complete taxes on your half with just a few forms and pieces of information. Visit our website to determine what documents we will need based on your needs. If you have a unique tax situation, give us a call, and we will help you choose the best process to move forward. Don’t delay your taxes any further. April 18 is fast approaching.