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Archive for Olivier Wagner

US Expatriate Taxes: A Guide For Filing Taxes As An American Living Abroad

Olivier Wagner - Guide To Expatriate Tax Filings

Most of the Americans abroad agree that US expatriate taxes can be intimidating. The U.S. and Eritrea are the only two countries in the world which impose taxes on their citizens regardless of their residence. Taxes are an already complicated matter but it is even more difficult for U.S. expatriates who need to comply with two different tax systems and also keep an eye on ever-changing U.S. tax laws. Tax situations become more complicated when Americans abroad haven’t been filing for years or have foreign corporations and offshore bank accounts.

1. U.S. Taxes On Foreign Income: Who Needs To File A U.S. Tax Return?

Let’s gain an understanding of what the U.S. taxes on foreign income mean to Americans living overseas. First things first, who needs to file a U.S. tax return?

Firstly, you are a U.S. citizen or a Green Card holder living abroad. Secondly, your worldwide income is above the filing threshold. By income, we mean wages and salaries for any US and non-U.S. sources, dividends and interests, rental income etc. You can check here the tax table for U.S. expatriates. Self-employed Americans have to file the U.S. tax return if their annual income equals $400 or more.

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What U.S. Expat Needs To Know About Foreign Earned Income Exclusion

Olivier-Wagner- What U.S. Expat needs to know about Foreign Earned Income Exclusion

While all Americans are taxed in their worldwide income regardless where they reside, they also have Foreign Earned Income Exclusion to reduce the tax burden. And this is what our today’s tax infographic is about. In 2018 you can eliminate up to $104,100 of foreign earned income on your U.S. expat tax return. Let’s look into details and what this exclusion is about. Read more

Renouncing/Relinquishing Your U.S. Citizenship And Taxes

Citizenship, Expatriate taxes

We received a question from Denise from Canada.

The question is: “I’ve heard a lot of words to describe people who were no longer U.S. citizens – “surrendered”, “relinquished”, “renounced” U.S. citizenship. What is the difference between these three terms?” Read more

U.S. Expat Taxes For Americans Living In Germany

Olivier Wagner - Germany-US Expats Taxes

Are you a US citizen living in Germany? It’s important to understand the US tax liabilities for Americans living abroad. While you are enjoying your expat life in Germany, don’t forget to file your US taxes!

In this article we will cover the following topics:

  1. US expat taxes for Americans living in Germany,
  2. Double taxation Germany-USA and how to avoid it,
  3. Who is considered as a German resident,
  4. Germany taxes for US citizens, including Income tax for foreigners
US Expat Taxes: Filing US Tax Returns From Germany

First of all, you need to determine if you are required to file a US tax return. It doesn’t matter where you live in the world as the US government taxes their citizens regardless of their residence. Is your annual income above the filing requirement of USD 10,400? Well, then you are required to file taxes with the IRS.

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US Expat Taxes For U.S. Citizens Living In Australia

Olivier Wagner- US Expats Living In Australia And Taxes

Every day we receive a lot of questions about US expat taxes for US citizens living in Australia. No wonder there is a big demand as there are over 200,000 US expats living down there. For a few years, Australia tops ratings as one of the best expat destinations. It’s the English-speaking country with high-quality living conditions, warm weather, and beautiful beaches. And it’s expat friendly! Do you know that 1/5 of the Australian population was born outside the country?

But let’s talk about US citizens residing there. Well, if you are an American living in Australia and thinking you escaped the Uncle Sam, that’s not quite true. Whether you are a US citizen or a Green Card holder living abroad, you should file a tax return each year. There are filing income thresholds and if you earn above it, you need to say hi to the IRS by June 15th (automatic deadline for US expats).

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Passport Revocation By The IRS: What You Need To Know

Olivier Wagner, Passport Revocation By The IRS

More than a year ago, Congress passed law HR 22. It resulted in IRC section 7345 “Revocation or denial of passport in case of certain tax delinquencies”

This is a far-reaching law which covers all taxpayers owing more than $50,000 in back taxes. The intent of the taxpayer to leave the country is not a criterion. Nor it is limited to criminal cases, civil penalties are enough.

Before the IRS can revoke your passport, or prevent you from obtaining a new one, these seriously delinquent tax debt needs to be debt for which a:

  • The government has issued a notice of federal tax lien and all administrative remedies under IRC § 6320 have lapsed or been exhausted
  • The government has issued the levy

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What A Digital Nomad Needs To Know About U.S. Taxes

Olivier Wagner, Digital Nomads And Taxes

Are you a US digital nomad or a self-employed American living abroad? This blog post is for you! All U.S. persons (and green card holders) are subject to U.S. tax on their worldwide income regardless of current residence:

  • whether you live in the U.S. or outside the U.S.
  • have a dual citizenship,
  • or are an Accidental American that has never set foot in the U.S.

your tax obligations remain the same as any other U.S citizen living in the U.S. 

How To Deal With Taxes On Income Earned Through Online Work In Multiple Foreign Countries?

All U.S citizens whose gross income exceeds the applicable threshold of $10,400 for a taxpayer filing single in 2017 and/or $400 for people with self-employment income must file a US tax return. Now, as a Digital Nomad, you may be traveling from country to country in a short time span. Due to that, you’re not a resident of any of the countries you visit. 

Let’s take a look at the general rules. The wages are sourced where the work is performed. So far, so good?

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Bona Fide Residence Test For U.S. Expats Explained

Olivier Wagner, Expatriate Tax Expert

We want to talk about Bona Fide Residence Test, which one shall pass to qualify for FEIE. Are you an American abroad and you earn more than $10,000 USD a year? Then you are required to file U.S. federal tax return. If this is news to you, then you probably should know more about filing requirements for U.S. persons abroad.

However, if you are a U.S. expat who is aware of their tax obligations, then you probably heard about FEIE. It stands for Foreign Earned Income Exclusion. It allows you to exclude up to $104,100 for 2018 tax year from your taxable income. But in order to qualify for such exclusion, you need to meet requirements. One of them is to pass either Bona Fide Residence Test or Physical Presence Test.

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U.S. Expatriates Offshore Banking: Best Countries For Overseas Banks

Olivier Wagner, Best Banks For U.S. Expatriates, Expatriate Tax Advisor

We are regularly asked about expat offshore banking, best overseas countries, and banks for US citizens. It’s a well-known fact that a right bank can save money for US citizens traveling or living abroad. Many Americans abroad are looking into ways to invest through financial institutions. It can be either in their place of residence, in popular financial city centers or in offshore destinations. When choosing a bank, everyone usually pays attention to following criteria:

  • ease of opening,
  • Investment access and liquidity,
  • taxes,
  • asset protection,
  • foreign transaction fees,
  • exchange rate used to convert foreign transactions to USD,
  • wire transfer charges,
  • customer service etc.

Read further if you want to learn more about opening an overseas bank account as an American abroad.

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How To Qualify For The Physical Presence Test To Use Foreign Earned Income Exclusion

Olivier Wagner, Tax Expatriate Tax Preparer

U.S. expats can use the Foreign Earned Income Exclusion to reduce taxable income. And if you did you research on this topic, then you probably heard about tests to pass. American abroad has to qualify for one of the two tests. Today we explain what you need to pass the Physical Presence Test.

Let’s take another look at few general requirements to use FEIE:

  • You should have foreign earned income
  • Your tax home must be in a foreign country
  • and one must qualify for one of the two tests, either Bona Fide Residence or the Physical Presence Test.

The IRS states that a U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months qualifies for the Physical Presence Test, but is it really that simple?

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A Royal Story: Meghan Markle, The IRS And Implications Of U.S. Taxes

Olivier Wagner, IRS Tax Implications Of Meghan Markle Marrying Prince Harry

The United States is only one of two countries (the other one being Eritrea) to impose the tax on their citizens wherever they live. 

One of the implications of Prince Harry marrying Megan Markle (who is a U.S. citizen) would relate to the activities and assets of the royal family being disclosed to the IRS.

Mrs. Markle would have to report specified assets outside the U.S. if the total amount of these assets exceeds the US $ 200,000 on the last day of the year or reached $ 300,000 at any time during the year. (This threshold refers to this because we assume that she and Prince Harry will not file the 1040 joint form.). She would have to do so by filing form 8938 disclosing to the IRS her assets. These assets would include beneficiary interests in foreign trusts for instance.

This is on top of the reporting of her non-US bank accounts on an FBAR if they reach at least US $ 10,000 during the year.

A lot can be said about the disclosure of gifts. If a U.S. citizen receives gifts from foreign persons worth at least $100,000, he/she would have to disclose all such gifts on form 3520. Failure to disclose gifts from foreign persons on form 3520 carries a penalty of $10,000. If the engagement ring she received from Prince Harry was valued at least $100,000, she would have to report all such gifts, including a $500 gift from the Queen.

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What Is A Foreign Earned Income For U.S. Expats?

Olivier Wagner, Foreign earned Income For Expats

Do you want to take advantage of the Foreign Earned Income Exclusion, the Foreign Housing Exclusion or the Foreign Housing Deduction? As a U.S. citizen or Green Card Holder living abroad, you still need to file annual U.S. federal tax returns. There are many different options, which American abroad has in order to cut the tax bill. However, the 3 above-mentioned ones are based on Foreign Earned Income.

So what is a Foreign Earned Income?

It’s crucial to understand what FEI is for US expats. We prepared this easy infographic to provide more clarity on this topic. The definition by the IRS states that it’s income you receive for services you perform in a foreign country:

Check out the infographic below to understand the classification of types of income and what is considered to be NOT earned income. We also included what the IRS doesn’t count as a Foreign Earned Income.

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