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Expatriate Tax Returns

US 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.

Why Expatriate Tax Returns?

You may find yourself uncertain as to what to look for in a tax preparer. Is it necessary? What is the cost? How can I be confident in their work? We understand the uncertainty, and we are here to help.
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Moving Abroad Your Life May Be More Complicated Than Ever Before

Relocating can enable you to get a great job, make more money and have a totally interesting change to your lifestyle.  Moving offshore creates other issues that need to be considered like:

  • Dealing with foreign currency and exchange rates
  • Language barriers
  • Benefit packages such as health insurance, tuition, housing, transportation
  • Tax rules, rates and regulations

Basically, pretty much everything you take for granted.

Before agreeing to any employment contract you should contact Expatriatetaxreturns.com to review the offer, help you to manage your expectations, project your tax liabilities, and help with the answer to the question “Is it worth it?”

Moving across the world is a decision that cannot be taken lightly.  Get some professional guidance along the way to make sure that you are aware of all ramifications.

News for American Citizens Living Abroad

Expatriate Tax Returns Filing News for Expats

Tax Day, April 15th has passed. The bad news is if you owe taxes to the U.S. government, payment is overdue to the IRS. As an expat, you are given an automatic two-month extension to June 15th for filing but all monies owed were due on April 15th.

Hopefully, you are among the majority of Expats who do not owe any taxes but if not, pay now. If you are one of the minority expats that do owe taxes, you may have to pay interest. Submit your payment in full to stop the interest from accruing. Our CPA’s are here to help make your tax filing easy, contact Expatriate Tax Returns today.

Good News for American Citizens Living Abroad

Expatriate Tax Returns Good News Tax Filing

Adults across the U.S. will recognize April 15th as Tax Day. This is when individual income tax returns are due. There is some flexibility for expatriates. The Internal Revenue Service website states that if you are “a U.S. citizen or resident alien residing overseas or are in the military on duty outside the U.S.” that you are given an automatic two-month extension for filing.

You are not required to submit a request to take advantage of this extension. Your tax filing will be due by June 15th if you qualify. As long as you pay all taxes (most expatriates don’t owe any taxes), no late penalties will be applied. A CPA can provide valuable financial advice and help ensure that you always pay the amount required by law – no more and no less. Make tax filing easy, contact Expatriate Tax Returns today.

I Made a Mistake on My Expat Tax Return – What Do I Do?

Expatriate Tax Returns Expat Tax Return Mistakes

Realizing that you made a mistake on your expat tax return can be a heart-stopping experience. Don’t worry. The issue can be corrected.

What Do I Do When I Notice a Mistake?

The best thing to do when you notice a mistake on your tax return is to deal with it. Common errors include forgetting to report income or not taking all allowable deductions. No matter what the mistake was, it is always better to file an amendment before the IRS notices and contacts you about it.

How Do I File an Amended Expat Tax Return?

There is a process in place to allow you to file an amended tax return. Using a Form 1040X, you can make changes to a previously filed 1040EZ, 1040A, or 1040. This usually must be done within three years of the original return or two years from the date the taxes were paid, whichever comes second. Next, you can:

  • Attach the necessary form or schedule if needed
  • Pay additional taxes owed before the due date to avoid penalties and interest
  • Submit the form using snail mail (not electronically)

Expert Advice Can Help You Avoid Expat Tax Errors

The best way to deal with expat tax return mistakes is to avoid them altogether. We can make the process much easier and provide you peace of mind. Whether you’re filing your taxes for the first time or need to submit an amendment, let us know. Contact Expatriate Tax Returns to discuss your expatriate tax questions.