Marriage to a Foreign Citizen

How Does My Marriage to a Foreign Citizen Affect My Taxes If We Don’t Live in the U.S.?

Question I’m an expatriate and live and work in Europe, visiting family in the United States a couple times a year. I didn’t think about my U.S. taxes until recently, when I sat down to work on them. How is my changed marital status going to affect my U.S. tax liability? Answer Congratulations on the …

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Contractor Versus Employee

Contractor Versus Employee Taxes for Americans Working Abroad

As an independent contractor or an employee, working abroad has both advantages and disadvantages. A US expat living overseas might have numerous financial and non-financial perks, especially when compared to their domestic counterparts. However, your taxes will vary greatly depending on whether you are an independent contractor or an employee. Read the following case studies …

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Foreign Retirement Plans

Reporting Requirements for Foreign Retirement Plans: Issues and Solutions

The IRS typically taxes contributions to foreign plans, the income that has been generated in those plans (growth) but has not yet been distributed, and payouts from such plans. The extensive list of information-reporting obligations and the severe penalties for infractions should draw your attention if the lack of tax deferral is insufficient to do …

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US Expat Taxpayers

Some US Tax Law Changes Impacting US Expat Taxpayers

The new changes to US federal tax laws impacts expats filing their 2021 tax returns in 2022.  The standard deduction for married couples filing jointly for tax year 2021 has been increased to $25,100.  For single taxpayers and married individuals filing separately, the standard deduction increased to $12,550 for 2021, and for heads of households, …

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foreign tax return

It is on my foreign tax return, so I can take this deduction

U.S. Expat Taxes are determined under U.S. tax rules, not those of a foreign country. The variations between what is deductible in one country versus another can sometimes result in significant differences between the foreign tax return amounts reported abroad and on the U.S. tax return. When the reported taxable income is exactly the same …

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foreign earned income exclusion and the foreign tax credit.

I have an option to choose between the foreign earned income exclusion and the foreign tax credit.

Americans overseas can reduce their US tax burden using the foreign earned income exclusion, the foreign tax credit or a combination of both. This year, for example, claiming foreign earned income exclusion allows higher-earning expats to qualify for coronavirus stimulus payments that they would not otherwise qualify for. Unfortunately, it is not permitted to switch …

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IRS Exchange Rates for Expats

What are the IRS exchange rates for Americans living abroad?

What are the IRS exchange rates for Americans living abroad? Filing your expat taxes generally means converting your foreign income into US dollars. To do that, you need to understand IRS currency exchange rates. This is what you need to know. Why are IRS exchange rates important for expat taxes? Every year, Americans living abroad …

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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 …

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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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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 …

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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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