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Expatriate Tax Returns

Expatriate Tax Returns

Taxpayer Penalty Relief for Certain 2019 and 2020 Returns

Taxpayers experienced significant challenges during the COVID-19 pandemic. Because of this, the IRS issued Notice 2022-36. This issue includes relief of penalties to select people and businesses who filed late 2019 and/or 2020 returns. Expatriate Tax Returns has helpful information to keep you off the tax hook. Contact us today to see if you qualify for those 2019 and 2020 returns.

If you already paid penalties for these filing years, don’t fret! By the end of September, 1.6 million taxpayers will receive over $1.2 billion in refunds or credits.

If you failed to file federal taxes by April 18, 2022, tax filing deadline, this penalty relief is for you. Penalties for missing this deadline are often implemented at a monthly rate of 5% and go up to 25% of unpaid taxes. This relief includes the 1040 and 1120 form series, along with documents associated with Notice 2022-36.

To qualify for this relief, file eligible income tax returns at www.expatriatetaxreturns.com by September 30, 2022.

People who are required to file various returns (banks, employers, businesses, 1099 workers, etc.) also have a chance of penalty relief. All eligible 2019 income tax returns must have been filed by August 1, 2020, and 2020 returns must have been filed by August 1, 2021, to qualify for this relief.

Some exclusions to this relief apply. Disqualifications include but are not limited to:

  • Filing of a fraudulent return
  • The penalty was accepted as an offer to resolve an agreement
  • Penalty enacted by court determination

If you have questions about late tax filing or other tax concerns, visit www.expatriatetaxreturns.com to connect with an expert.

Paying Interest to the IRS When They Could be Paying it to you?

$3.3 billion – the amount of refund interest the IRS paid to taxpayers in the fiscal year 2021.

Did you know that, by law, the IRS must pay you interest on your tax refund if it takes them longer than 45 days to process it? As of June 21, 2022, the IRS had more than twice as many returns waiting to be processed as it did the year before.

Even better news? As of July 2022, the guaranteed interest rate on unpaid refunds increased to 5%. Meanwhile, the national average interest rate on a savings account is a measly 1%.

With the average individual refund at $3,263, there could be an extra $163 in your pocket just for filing your 2021 tax return!

So how do you get it? The first step is to move to file your 2021 tax return with Expatriate Tax Returns to the top of your To Do list. Preparing your taxes can be stressful, time-intensive, and overwhelming. In addition to peace of mind, having a tax professional such as Expatriate Tax Returns in your corner can help you avoid making costly mistakes while maximizing tax breaks that you may not even be aware of. We’re here to help! 

Perhaps you decided to prepare your taxes this year and filed an extension, but now you have an aching sense of dread knowing it’s yet to be completed? Our professional tax experts can also help you take it over the finish line. It’s essential to find a tax professional that you trust.

As Benjamin Franklin famously wrote: “remember that time is money.”

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.

The New and Improved Where’s My Refund Tool

Live stress-free with IRS’s new and improved Where’s My Refund tool. The update includes access for taxpayers to view their refunds from previous years. Taxpayers can now view refunds dating back to 2019! The only information needed to access the Where’s My Refund tool is your SSN (or ITIN), anticipated refund amount, and the taxpayer’s filing status.

Taxpayers can determine precisely what the status of their refund is by using this new tool. This is very beneficial for budgeting and planning purposes. The refund status will either be in received, approved or sent mode. This feature essentially gives users a forecast of where their money stands. Once the refund is filed, taxpayers can begin seeing their refund status 24 hours after filing electronically, 3-4 days after filing previous years electronically, and four weeks after mailing. Information about your refund has never been easier to access and is at your fingertips. Visit www.irs.gov for more information.

Generosity Extended: The IRS Mileage Rate

The IRS is looking out for American taxpayers. For the remainder of 2022, the optional standard mileage rate has been increased by the IRS. For the rest of the year, taxpayers can receive reimbursement for using their automobiles for business travel and other similar purposes. Once mileage is calculated, drivers can determine what they’ll receive for their business travel expenses.

Taxpayers driving for business trips have a new reason to be excited! The standard mileage rate, once initiated, will be 62.5 cents per mile. The updated rate for moving (sector for active-duty people in the military) and medical reimbursement is 22 cents per mile. Both rates were increased by 4 cents per mile. These increases will be put in place on July 1, 2022, and will last for the rest of 2022. The only rate that did not receive an increase is the rate for charitable organizations, which remains at 14 cents per mile.

2022 has introduced all kinds of challenges worldwide. One of the main challenges America has been facing this year is inflated gas prices. The American average price for fuel is $4-$5 per gallon. Nationwide, all drivers must deal with the inflated prices to be on the road.

Out of generosity, the IRS adjusted the optional standard mileage rate for taxpayers. According to Chuck Rettig, the IRS Commissioner, the IRS made this increase to shine a light on the challenging circumstance of high gas prices. This change is unique because the IRS consistently updates these rates yearly. Any previous business travel costs should be calculated using the former rates before the increase. This information can be found in Notice 2022-03.

The IRS is not only generous but also flexible. If taxpayers would like an alternative to the business travel reimbursement, they can calculate the vehicle cost instead of the optional standard mileage rates. If you have questions, call us or visit www.irs.gov for more information.

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.