Expatriate Taxes | TaxConnections

02 Feb 2023

A Guide To ITIN Renewal For Taxpayers: How To Avoid Delays

An Individual Taxpayer Identification Number (ITIN) is a unique identification number assigned by the Internal Revenue Service (IRS) to individuals who are required to have a taxpayer identification number but do not have, or are not eligible to obtain, a Social Security Number (SSN). The ITIN is used for tax purposes and is required for certain tax-related transactions. However, ITINs are assigned for a specific period and need to be renewed periodically to maintain their validity.

If an ITIN is not used on a federal tax return at least once in the last three consecutive years, it will expire. Additionally, ITINs that have the middle digits of 78 or 79 will expire at the end of 2021. It’s important to renew the ITIN in a timely manner to avoid any delays or complications when filing taxes or carrying out other tax-related transactions.

This guide will walk you through the renewal application process of your ITIN. From determining if your ITIN needs to be renewed, to gathering the necessary documentation, and submitting the form and federal tax return. By following this guide, you can ensure that your ITIN renewal process is smooth and without any delays.

How to renew your ITIN?
To renew an ITIN (Individual Taxpayer Identification Number), individuals must complete and submit Form W-7 to the Internal Revenue Service (IRS), along with the necessary documentation and a federal income tax return. Here is a step-by-step guide on how to renew an ITIN:

Determine if your ITIN needs to be renewed: An ITIN is valid for a specific period of time. If it has not been used on a tax return for at least three consecutive years, it will expire.

Gather the necessary documentation: Depending on your citizenship and residency status, you may need to provide proof of identity and foreign status. Examples of accepted documents include a passport, birth certificate, or national identification card.
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Written by Olivier Wagner | Posted in Expatriate Taxes • TaxConnections • Taxpayer ITIN Renewals

15 Jul 2022

Are You Entitled To A Tax Refund When You Live Abroad?

We’ve been getting a lot of inquiries about tax refunds for U.S. citizens who live abroad. If you live in the U.S., your refund would be directly deposited to your account. Once you move overseas, receiving a refund becomes more complicated as many U.S. Expats no longer keep their U.S. bank account.

Since the refunds cannot be deposited to a foreign bank account, taxpayers living overseas receive a check instead. However, these can take month to arrive. There are few things you can do to ensure you receive your refund faster.

Receiving A Tax Refund For U.S. Citizens Abroad

Receiving a tax refund is surely the best thing about filing your U.S. Expat Tax Return. You cannot imagine how much joy it brings us to inform our clients they’re now not only compliant, but they are actually due a refund. Many taxpayers are simply not aware of the credits they are eligible for. The additional child tax credit is the most common example of a tax credit U.S. expats don’t know about.

Although many expats receive refunds every year, there are ways to speed up processing of your refund. Most U.S. citizens abroad receive their refund in a mail, often waiting even months for their checks. In this blog post we’ll discuss the ways to ensure your refund isn’t delayed.

Are You Entitled For A Tax Refund When You Live Abroad?

Written by Olivier Wagner | Posted in Expatriate Tax Refund • Expatriate Taxes

17 May 2022

Foreign Earned Income Exclusion For US Expats

Even if you’ve moved abroad for a brighter future, you still might have obligations towards the IRS. What happens if you earn income from sources outside the United States? If you live abroad, you might qualify for the foreign earned income exclusion (FEIE). This article explains what FEIE is and how it works, and provides some examples of situations where you might benefit from claiming it.

The U.S. retains its right to tax citizens and Green Card holders who live abroad and they must file their taxes even if they’re not physically present in the country. The foreign earned income exclusion (FEIE) allows U.S. taxpayers to exclude from their taxable income certain amounts they earn outside the United States. The FEIE was created in 1954 to relive American Citizens from the burden of double taxation when they move overseas.

What is the Foreign Earned Income Exclusion?

Written by Olivier Wagner | Posted in Expatriate Taxes • Foreign Earned Income Exclusion

08 Feb 2022

Expatriates: U.S. Tax Guide And Forms You Need To Know

Generally, if you are a United States citizen or permanent resident (Green Card Holder) living outside the United States for more than one year, you are called an expatriate or “expat.”* Rather than adding to the long list of tax guides that explain the general concepts of expat taxation,** we will focus on the specific requirements to file several US international tax forms, not well known. These are forms not well known, but they carry huge penalties for excluding or screwing up.

We will give you a general understanding of the following United States IRS Tax Forms:

Written by Gary Carter | Posted in Expatriate Taxes

27 Jan 2022

Tax Law Updates For Americans Overseas In 2022

2021 is ending and 2022 is coming. Post-holiday is tax filing season and Americans living abroad need to file their taxes. Just like Americans living in the United States, federal tax returns are filed every year. However, applying from abroad is more complicated. Below is new information about the taxes collected abroad for 2022 that Americans file with the United States.

Some things stay the same

First, it might be helpful to look back at what’s not new for Americans overseas in 2022.

Americans living abroad must submit US tax documents and report that foreign accounts, assets, and businesses remain unchanged. This year there was hope that President Biden’s tax reform might be accompanied by some kind of exemption for Americans living abroad, but that has not materialized.

Written by Olivier Wagner | Posted in Americans Overseas • Expatriate Taxes • Tax Law Updates

04 Nov 2021

What To Do If The IRS Freezes Your Assets As An Expatriate

How would you feel if you found your bank account frozen? After all the sweat and the sacrifice, you make after hours of working and putting together all your resources only for the IRS (Internal Revenue Service) to freeze them. Can the IRS freeze your foreign bank account?

When you delay paying your taxes, the IRS can access your bank account, savings, or assets such as a house or a car. They can take your salary before it gets to your pocket. Two, they can place a tax lien on your personal property. Finally, they can freeze your bank account and use the money to pay your tax due. When you move overseas, the IRS does no longer has such power.

However, don’t believe that your money is safe just because it is in an offshore bank account. The IRS can issue a levy to any bank within the US. If you’re an account holder of a foreign bank that has a branch in the US, the IRS can easily issue a levy notice to the US office and empty your account overseas.

Written by Olivier Wagner | Posted in Expatriate Taxes • IRS Freezes Assets

02 Feb 2021

Social Security Tax And Employer Withholding

Must You Pay Social Security and Medicare Tax?

Nonresident aliens who are F-1, J-1, M-1 or Q-1 visa holders are not subject to social security and Medicare taxes (FICA) on services are performed to carry out the purpose for which they are admitted to the United States [IRC sec. 3121(b)(19)]. This generally includes on-campus work for which authorization is granted on Form I-94, Arrival and Departure Record, or Form I-20, Certificate of Eligibility for Nonimmigrant Student Status.

A nonresident alien admitted to the US as a student is not permitted to work off campus for a wage or to engage in business unless given approval by the U.S. Citizenship and Immigration Services (CIS). This should be noted on the student’s copy of Immigration Form I-20, or Form I-688B, Employment Authorization Document.

Off-campus work due to severe economic necessity or for optional practical training is considered by the IRS to qualify for the exemption. The IRS does not consider other off-campus work performed by a nonresident alien student to be performed to carry out the purpose of a student visa.

Written by Gary Carter | Posted in Expatriate Taxes • Social Security Income

22 Sep 2020

US Citizens Living In Canada Will NOT Pay US Tax On $1200 US Cares Act Payment But Likely Will Pay US Tax On Canada’s CERB Payment

Prologue – The Only Certainties Are Death And Taxes

But are these payments taxable and if so by whom? "U.S. persons living in Canada could benefit from #COVID19 aid from both Canada and the USA" /via @globeandmail https://t.co/UVHB8N65Ok

— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) September 21, 2020

The above tweet references an article in the Globe and Mail on May 7, 2020. The article contains interesting perspectives, but much has changed since that time.

COVID-19 And The Role Of Government Assistance

Written by John Richardson | Posted in Cares Act Payment • Expatriate Taxes

30 Jan 2020

How To Tell If You Are A Non Resident Alien, Resident Alien Or Dual Status Alien When Filing Your Tax Returns

How To Determine To File Tax Return As An Alien

The community of tax professionals on www.taxconnections.com offers great knowledge and expertise. We noticed one of our members Gary W Carter has this fun analyzer that does not ask you your name, maintains your anonymity and tells you whether you need to file as either a non resident alien, resident alien or dual status alien when filing a U.S. tax return.

I took the quick analyzer test myself, even though I am a U.S. citizen born and living here simply because I wanted to know the value for our worldwide visitors and readers of TaxConnections Blogs. If you have the same question regarding your filing status as an alien tax filer, you will appreciate this quick and private analyzer.

Click Here To Determine Your Alien Tax Filing Status.

You Remain Anonymous!

Written by Gary Carter | Posted in Expatriate Taxes • TaxConnections

23 Jul 2019

Get Professional Advice To Avoid Risk Of ‘A Boris’: U.S. Expatriates In U.K. Warned

Boris Johnson, the front-runner to succeed Theresa May as Britain’s prime minister this week, is well known to Londoners for myriad reasons, including having unofficially lent his name to a bicycle-sharing scheme (“Boris bikes”) that was launched in 2010, and with which he, a keen cyclist himself, was associated.

Less well known to many of his fellow Londoners is that he had a bitter and rather public battle with the U.S. IRS six years ago, when it sought to tax him on the sale of his London property, owing to the fact of his American citizenship, acquired at birth.

Below is an updated version of a story on his U.S. tax travails that we first ran last September. We thought it timely to revisit this issue now, because London property experts report that Americans currently account for a disproportionately large share of those currently shopping for – and buying – London properties, helped by a dollar that’s at near-record highs against the pound, and expected to strengthen further. At the same time, London property prices have been under pressure, with the average value of a London home reported recently to be down by 4.4% in the year to the end of May.

When British politician Boris Johnson renounced his citizenship in 2016, many observers speculated that he had finally been moved to do it after the seemingly ill-advised sale of his home in north London in 2009 saw him hit with a significant (said to be in the tens of thousands of pounds) capital gains tax payable to the U.S. government on his half of the profit from the sale.

Written by Helen Burggraf | Posted in Expatriate Taxes

11 Jul 2019

American Couple In France In Major Win Against IRS Over Tax

In a development that is being seen by American expat groups in France as a major win, the U.S. Internal Revenue Service has admitted in a U.S. Tax Court that it had wrongly collected millions of dollars of tax from France-resident American citizens, ending a years-long legal saga that could see millions of dollars paid to U.S. expats who have lived in and been filing tax returns from France, in the form of refunds.

The matter, which is seen as changing an element of the way Americans resident in France are taxed by the U.S., could lead to thousands of the estimated 100,000 American citizens currently living in France claiming back up to US$100m from the U.S. government, according to London-based U.S. tax attorney Stuart Horwich of Horwich Law.

Horwich assisted Ory and Linda Eshel, the two France-resident U.S. taxpayers who mounted the legal case in question, in bringing their claim to court.

At issue is a court statement by the IRS, in a Washington, DC court, that it had finally accepted that U.S. citizens resident in France could deduct against their U.S. taxes certain previously disallowed taxes paid to France.

Written by Helen Burggraf | Posted in Expatriate Taxes • France

13 Jun 2019

Are You A U.S. Citizen Living Outside The United States?

John Dundon - Expatriate Filing Extension

International Taxpayers Extension Request is for US taxpayers residing outside of the USA. Your 2018 income tax forms are due June 17th 2019. That date is coming up here soon and it usually catches people off guard.

If this might be you, worry not… Simply File IRS Form 4868 for automatic extension of time to file US individual tax return.

Filing this form gives you an additional 4 months (until October 15th) to file your income tax forms. However you still must estimate what your federal income tax liability will be and get that payment into the US Treasury ASAP. That payment was actually due April 15th 2019.

If you live outside of the US you should not be penalized for late payment if you pay by June 15th, but you will be assessed interest for the late payment.

Written by John Dundon | Posted in Expatriate Taxes • Filing Extension