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.
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.
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
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
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
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).
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?
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.
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.
One of the fundamentally important tax concepts for U.S. expats to know is that the U.S. tax system has built-in mechanisms for preventing the “double taxation” of your income (i.e., tax in both your new host country and in the United States). These mechanisms provide a measure of relief for U.S. expats who remain subject to U.S. taxation, despite living and working abroad.
As a follow-up to my post on listening to Foreign individuals who sell investments off shore but do not know United States Tax Law, I would like to say that there are many individuals who live off shore and have never filed tax returns. The issue is that if an individual owes Federal Tax in excess of $50,000 they could lose their United States passport. Many people who say they never owed that much Read More
A lot has been written about the Foreign Account Tax Compliance Act {FATCA} in the past year. As this year comes to a close and I write up this post, I wanted to give you all, my dear readers a synopsis at your finger-tips, a round-up, if you will of some major FATCA events for 2015:
1. FBAR Deadlines Changed:
On July 31, 2015 President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 into law, which modified the due date of several key forms for Americans with foreign income and Americans living abroad. That includes the Report of Foreign Bank and Financial Accounts, or Form 114, colloquially known as the FBAR.
Any U.S. person with a financial interest in, or signatory authority over, foreign financial accounts must file the FBAR, if at any time, the aggregate value of their relevant foreign account or accounts exceeds $10,000. An account over Read More
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