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Tag Archive for Expatriates

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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How Does Negative Gearing Work For Australian Expatriates? Cash And Non-Cash Deductions

If you’ve paid attention to the news lately, you’ve no doubt heard the term “negative gearing”. It has become somewhat of a political football – with the Liberal and National parties supporting current arrangements, while Labour intends to change it. But what exactly is negative gearing and how do the rules apply to Australian expatriates?

Negative Gearing 101 Read more

Filing IRS Back Taxes for US Expat Americans

American expats are still required to file a US federal tax return to the IRS. As expats also have to comply with the tax rules in the country where they live, it’s counterintuitive but nonetheless important that they file US taxes too.
Taxing US citizens abroad, or Citizenship (rather than Residence) Based Taxation, dates back to the Civil War, but until recently the IRS was powerless to enforce expat taxes, so few expats filed.

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Claiming the Foreign Earned Income Exclusion when Filing a Late Return – What US Expats Need to Know

The Foreign Earned Income Exclusion lets US expats exclude the first around $100,000 (the exact figure rises a little each year) of their earned income from US taxes.

It’s a great choice for many expats who earn less than this threshold, and sometimes a good option for expats who earn above the threshold too.

To claim the Foreign Earned Income Exclusion, expats have to file form 2555 with their annual US tax return. Form 2555 requires expats to prove that they live abroad.

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What US Expats Can Learn From the Paul Manafort Indictment

President Trump’s former campaign manager Paul Manafort, along with his associate Richard Gates, were indicted last week, with a long list of criminal charges filed against them.

The charges include engaging in conspiracies against the United States and to launder money, making false statements, acting as an unregistered foreign agent, and failing to report foreign bank and financial accounts.

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Highlights Of The Latest Republican Tax Reform Plan

President Trump unveiled his latest framework for tax reform, which stems from a collaborative effort by the so-called “Big Six,” which includes members of the Trump administration and Senate and House leaders.

The following is a quick summary of some of the main provisions of the plan, which have potential consequences for U.S. expat individuals: Read more

Roth IRA Taxation For Expats In Canada

The importance of income tax treaties should not be underestimated when considering the U.S. tax implications of living abroad. U.S. and foreign tax laws often fall short of ensuring that U.S. expats are on equal tax footing with their non-expat counterparts. In such case, a relevant tax treaty may be available to pick up the slack. Read more

Estate Planning For American Expatriates

Retiring abroad is more popular than ever, thanks to perceptions of a better quality of life, more affordable health care, and a warmer climate.

Americans living abroad earning over $10,000 a year (or just $400 of self-employment income) are still required to file a U.S. tax return though, declaring their world wide income. This includes expats who have retired or settled permanently abroad. Read more

The Tax Questions U.S. Expats Most Often Ask

Do I still have to file and pay U.S. taxes if I live abroad?

This is the most common tax question that U.S. expats ask. Unfortunately, the U.S. tax system is based on citizenship rather than residence, so it doesn’t discriminate where in the world you live.

As a result, expats have to file and pay U.S. taxes on their worldwide income if they earn over $10,000 (or just $400 of self-employment income).

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U.S. Expat Taxes For Americans Living In Sweden

It has been estimated that there are several thousand Americans living in Sweden.

Living in Sweden is an incredible experience for a number of reasons, including the friendly locals, the free, high-quality public services, the charming culture, not to mention easy access to the rest of Europe. As an American expatriate living in Sweden though, what exactly do you need to know regarding filing U.S. expat (and Swedish) taxes?

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Final Regulations Clarify Exceptions To PFIC Reporting

Ephraim Moss, PFIC reporting

The IRS recently finalized regulations, previously in proposed and temporary form, which provide guidance on determining the ownership of a passive foreign investment company (PFIC) and the reporting obligations of PFIC owners. The final regulations make some changes to the proposed and temporary regulations based on comments that the IRS received from taxpayers and taxpayer organizations.

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Introducing FATCA – What Does It Mean In Your Life?

John Richardson, FATCA,

Be patient. Settle in for the ride. Historians will write much about the role FATCA played in eroding America’s role as a world power.

There is no legislative record which explains the purpose of FATCA. FATCA appeared as an “offset provision” in the HIRE Act which was signed into law by President Obama in March of 2010. Some claim that FATCA was for the purpose of preventing Homeland Americans from “stashing their wealth” in unreported “foreign bank accounts” outside the United States.

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