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Tag Archive for American Expat Tax News

This Year’s FBAR Deadline Is Upon Us

Ephraim Moss

The IRS has just issued a reminder to taxpayers that the FBAR filing deadline of June 30th is fast approaching. Unlike other tax forms, extensions for filing the FBAR are not allowed, so June 30th remains a hard deadline.

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State Tax Considerations For American Expats

One of the more common tax questions from American Expats is do I have to file a State return?

Unfortunately, there is not an easy answer to that question, as it depends on the State and your personal situation… but you may have to file a return. There are a few factors that you need to look at first.

• Do you still own property in the State? Some expats keep their home and rent it out. In that case a return must be filed.

• Are you still receiving income from the State? Interest, dividends, bank accounts, mailing address and other types of State sourced income may trigger a need to file. Read more

Expatriation: Deferring Payment Of The Exit Tax

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Expatriation And Exit Tax

Many individuals who previously took on United States citizenship as a second nationality or obtained a green card are now regretting this decision.  Some individuals often incorrectly assume they can give up the US citizenship or the green card without adverse US tax consequences.

Under the so-called “expatriation” tax rules, harsh tax consequences will result if the individual giving up his US citizenship or “long-term” green card (generally, held for 8 out of the past 15 years) is a so-called “covered expatriate”.  Only “covered expatriates” will suffer the onerous tax consequences.  One is a “covered expatriate” if the individual has either a net worth of US$2 million at the time of expatriation; or, if he has a certain average income tax liability over the past 5 years prior to expatriation. One is also automatically treated as a “covered expatriate” if the person fails to notify the IRS that he has expatriated and satisfied all of his tax liabilities for the past five years even if he did not meet the aforementioned dollar thresholds.

In these cases, imposition of an “Exit Tax” (among other harsh tax results) will occur when one gives up his US citizenship or “long term” green card. Under the Exit Tax provisions, the individual is subject to tax on the net unrealized gain on all of his world wide assets as if such property were sold for its fair market value on the day before the expatriation date.  Thus, the individual must pay US income tax on gain that he is “deemed” to have earned by operation of the Exit Tax rules, when in fact, the individual has not sold anything and is without any cash in hand with regard to the deemed sale. Naturally, this raises the issue of how the individual will fund payment of the Exit Tax. Read more

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