Tax Tips

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 …

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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 …

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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 …

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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 …

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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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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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US Expat taxes abroad

I don’t need to worry about penalties for late filing because I never owe any U.S. tax.

Typically, penalties are calculated based on tax owed, international information returns, such as from 8938 can cost a taxpayer, if filed late, large penalties even of no tax is due. Some related penalties can reach up to $10,000 per form per month. Filing Form FinCEN 114 late or incorrectly can also result in hefty penalties. …

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foreign dividends

Foreign Dividends

Your foreign dividends may be eligible to be taxed at a special lowered tax rate. Here’s how you can find out, if they are: When you receive dividends from a US corporation, your Form 1099 will identify whether they are eligible dividends or not. Qualified dividends are entitled for a much lower tax rate that …

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taxes, tax office, tax return

Demystifying IRC section 965 Math

For foreign earnings, an overview of the taxation. With the bit of time of professionals or taxpayers to prepare for them, the tax code’s tax jobs and cuts introduced many changes. The revision of internal revenue code section 965, one of the most complex changes involved in it, maintains the United States taxes earnings from …

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receipts, tax office, bank notes

U.S. Expat Taxes – Tax Relief for U.S. Citizens Renouncing Citizenship

U.S Expat Tax Report: A new amnesty program for certain U.S. citizens who have renounced, or intend to renounce, their U.S. citizenship. Among other requirements, you must have renounced U.S. citizenship after March 18, 2010, and have never filed a U.S. Form 1040 income tax return. The relief is also good news for certain individuals …

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Stimulus Payments, Paycheck Protection Program, Expense Deductibility Headline, Tax Changes In Latest Covid Relief Package

Covid Relief Package When Congress initially responded to the Covid-19 pandemic by passing the CARES Act on March 27th, 2020 — handing down individual stimulus payments, Paycheck Protection Program loans, supplemental unemployment benefits and a bevy of additional tax breaks to struggling businesses — many anticipated that if the virus continued to spread unabated, additional …

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Another Stimulus Bill is Coming

In recent months and as a result of long negotiations between Congress’s Democrats, Republicans, and the White House on another round of stimulus legislation, the possibility of a deal is becoming real. In May, the Democrats in the House released COVID-19 Phase 4 legislation, the Health and Economic Recovery Omnibus Emergency Solution Act (HEROES Act). In July, …

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