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expat taxes

My passport or Green card has expired, so I do not have to file my expat taxes any more?

Filing a US tax return while living abroad can be stressful and expensive. When I first came across this idea, I found it surprising, but finally understood how frustrated American taxpayers with a second citizenship and no desire to return to the United States would choose to renounce their American status. However, throwing your passport …

My passport or Green card has expired, so I do not have to file my expat taxes any more? Read More »

This is not like this! Legal foreign marriages are recognized by the US. A US citizen with a foreign spouse is therefore married for US tax purposes and is even allowed to file a joint tax return with the foreign spouse if you wish. By making this joint election, the foreign spouse enters the US tax system, which may not be a good idea if the foreign spouse has foreign income and assets. Filing a separate tax return may be a better option in that situation, but filing with "single" status is in no way a valid option. If you have eligible children dependents who have SSN or ITIN you can file as Head of Household. The IRS says "If you are a U.S. citizen married to a nonresident alien, you may qualify to use the head of household tax rates. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien"

I got married abroad, So I am still single because my spouse is foreign?

This is not like this! Legal foreign marriages are recognized by the US. A US citizen with a foreign spouse is therefore married for US tax purposes and is even allowed to file a joint tax return with the foreign spouse if you wish. By making this joint election, the foreign spouse enters the US …

I got married abroad, So I am still single because my spouse is foreign? Read More »

GILTI Tax

Similar to a subpart F inclusion, “U.S. Shareholders” of CFCs include GILTI in income on an annual basis. U.S. corporations may be entitled under section 250 to a deduction of up to 50% of their GILTI inclusion and related section 78 gross-up. Unlike a subpart F inclusion, a U.S. Shareholder calculates a single GILTI inclusion, …

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Form 14654 and the Streamlined Offshore Program

There are two directions for the IRS streamlined program. These are the SFOP (Streamlined Foreign Offshore Program) and the SDOP (Streamlined Domestic Offshore Program). Both the SFOP and SDOP has the following benefits: amnesty from FBAR penalties, accuracy-related penalties, and failure to file penalties. Differences between the SFOP and SDOP The differences between the two …

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FATCA compliance and FBAR filing

FATCA was signed into law in 2010, with an aim to levy certain taxes on U.S. citizens and entities with substantial overseas holdings and the overseas institutions that enable some sorts of tax evasion. Requires foreign banks to report and pass due diligence of US persons bank accounts to accurately report to the US treasury …

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Form 8621 (PFIC)

Required when there is distribution of income from a passive foreign investment company (PFICs) in which a U.S. person is a shareholder or a disposition of the shares of a PFIC by gift, death and most types of otherwise tax free exchanges or redemptions. This form must be filed to compute the tax due on …

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Form 3520

Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts Usually amounts of $100,000 or more are required to be reported in a calendar year.

Form 5471 (CFCs)

U.S. citizens and U.S. residents who are officers, directors, or shareholders in certain foreign corporations are responsible for IRS Form 5471 filing. Under the TCJA, rules requiring the inclusion of GILTI for controlled foreign corporations (CFCs) were added. The new rules are in Section 951A and other sections of the Internal Revenue Code (IRC). The …

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Form 8938, statement of Specified Foreign Financial Assets

If you are required to file Form 8938, you must report your financial accounts maintained by a foreign financial institution. The following are considered reportable under the code: Financial accounts held at foreign banks and financial institutions Stocks, bonds, or other securities issued by a non-U.S. person and not held through an investment account Notes …

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Form 2555. Foreign Income Exclusion

Required to be prepared and filed if you qualify for either physical presence test or Bona fide residence, exclusion amounts changes every year. For example, it was $105,900 in 2019 and $107,600 for year 2020

U.S Taxes and Canadian Retirement plans

U.S Taxes and Canadian Retirement plans

Planning for retirement can be an extraordinarily complex process, particularly when there are cross-jurisdictional issues like the Canada-US Tax Treaty. As a non-resident or expat, you will need to understand how each country taxes withdrawals in registered investment plans, such as the RRSP, TFSA, and other certain pensions as explained in this article. Registered Retirement …

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foreign income tax

The country where I live does not tax it, So this is not an income? What about deductions?

The country where I live does not tax it, So this is not an income? The IRS does not care how your foreign country, where you reside and make money taxes income. If the income is not specifically excluded in the Internal Revenue Code, it is taxable. Section 61 leaves little doubt: unless otherwise provided …

The country where I live does not tax it, So this is not an income? What about deductions? Read More »

Reporting requirements for your interests in foreign corporations

Reporting requirements for your interests in foreign corporations

A US person may have international tax reporting obligations to the IRS if he owns more than 10% of the shares of a foreign corporation. US persons who may be subject to these special reporting rules include: 1) US citizens or residents serving as directors or officers of the foreign corporation. 2) US citizens or …

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I do not have to file a state tax return because I moved abroad.

I do not have to file a state tax return because I moved abroad.

American expats are happy to quickly end their tax ties to their former state of residence. Unfortunately, they are not always able to completely do so. This may result in them continuing to be considered tax residents for state tax purposes. Several states, such as New York, California, New Jersey, Pennsylvania and others, may continue …

I do not have to file a state tax return because I moved abroad. Read More »

Foreign investments are like American investments.

Are foreign investments treated like U.S. Investments?

This is another area of frustration. Foreign mutual funds, exchange-traded funds (ETFs), and other pooled investments are generally classified as Passive Foreign Investment Companies for US Tax purposes or PFIC. PFICs are punitively taxed and do not benefit from preferential tax rates like qualified dividends and long-term capital gains like US funds do. They are …

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US Expat taxes abroad

The Company is on my spouse name, do I still have to report it in my expat taxes?

Expat Taxes: Due to the complexity of US tax rules, some of the tax reduction and simplification ideas that are shared online among non-experts can turn out to be ingenious in the middle. The idea of ​​putting the business of a US citizen in the name of the foreign spouse is one of them. There …

The Company is on my spouse name, do I still have to report it in my expat taxes? Read More »

Stimulus Checks for US Citizens Living Abroad

Stimulus Checks for US Citizens Living Abroad

During the COVID-19 pandemic, the US government passed three major laws that included stimulus payments for Americans living in the US and abroad. Reviewing these details will help U.S. expats determine if you are eligible for the third stimulus check and if you can claim a recovery relief refund on your 2020 tax return. Do …

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Social Security

Social Security Payments for Americans Working Abroad (Expats)

Social Security for Expats Americans working abroad by foreign business normally participate in the social security system of their foreign employer. Self-employed Americans abroad, though, might likewise be needed to pay into the U.S. social security system unless they are eligible for a Certificate of Insurance coverage from the international nation. These certifications are offered …

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Child Tax Credit

Child Tax Credit 2021

The Child Tax Credit 2021 is a refundable federal tax credit for parents who claim their children as dependents. It was intended to make receiving an education more affordable and to help those with higher incomes pay their share for taxes. In order to qualify, a child must be resident in the United States at …

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IRS Tax Fourth Stimulus Checks

News: IRS Tax Fourth Stimulus Checks

All you need to know!! Many lawmakers are pushing for a fourth round of Stimulus Checks, but President Joe Biden has not yet shown any support for it. Approximately 24+ Senate Democrats sent a letter to President Joe Biden on March 31 2021 urging him to implement recurring payments and automatic unemployment insurance tied to …

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