Tag Archive for Recovery Rebate Credit

Affordable Renunciation: Power Of Recovery Rebate Credit

Affordable Renunciation: Power Of Recovery Rebate Credit

Are you concerned about the costs involved in renouncing your US citizenship or becoming tax-compliant? We have great news that can make this process more affordable. In this blog, we will explore the remarkable opportunity presented by unclaimed stimulus checks issued by the IRS during the COVID-19 pandemic. Learn how these checks have significantly alleviated the financial burden for many, making renunciation and compliance more accessible than ever before.

At our firm, we have witnessed firsthand the positive impact of unclaimed stimulus checks. Many individuals who were initially worried about the costs found relief when they discovered that they were eligible to claim up to $3,200 through these checks.

UNDERSTANDING THE EXPENSES OF RENOUNCING US CITIZENSHIP

A. GOVERNMENT RENUNCIATION FEE

Renouncing US citizenship comes with a government fee of $2,350, making it one of the most expensive renunciations among other countries. The fee includes administrative costs and the review process conducted by lawyers in Washington, DC. The US government considers the fee necessary for proper case review and approval. There have been discussions about potentially lowering the fee to $400, but it seems unlikely to happen in the near future.

B. COMPLIANCE COSTS
Before renouncing their citizenship, expats must become tax-compliant. This means meeting certain requirements, including filing tax returns for the prior 5 years and 6 years of Foreign Bank Account Reports (FBARs). Achieving tax compliance is crucial, and failure to do so may result in penalties or other consequences.

Related: Being an Accidental American: A Tax Perspective

Our firm offers a comprehensive renunciation package designed to assist expats in becoming tax-compliant. For those who have failed to file tax returns due to a lack of awareness, we recommend taking advantage of the Streamlined Foreign Offshore Program. This amnesty program offered by the IRS waives penalties for those who were unaware of their tax obligations to the US.

THE WINDOW OF OPPORTUNITY: CLAIMING STIMULUS CHECKS
Stimulus checks, issued by the IRS during the COVID-19 pandemic, have provided essential economic relief. Every American has the right to claim these checks, which can be done as a recovery rebate credit on their 2020 and 2021 tax returns. It’s important to note that the amount you receive is subject to limitations, particularly for high-income earners who may receive a partial amount.
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Written by | Posted in Affordable Renunciation • TaxConnections

A Guide To Recovery Rebate Credit For U.S. Expatriates

A Guide To Recovery Rebate Credit For U.S. Expats

If you’re one of the many U.S. expats who are owed stimulus money, you can still claim it through Recovery Rebate Credit. As the matter of fact, 2023 is the last year to get all the stimulus checks you might have missed! It will either boost the amount of your tax refund or reduce the taxes you owe to the IRS. Either way – you win! Don’t miss out on the opportunity to get the money you’re entitled to. Keep reading to find out how the credit works and what makes you eligible to qualify.

What is Recovery Rebate Credit?
Recovery Rebate Credit is part of the Covid-19 Economic Relief program. The credit makes it possible for those who didn’t receive Economic Impact Payments (also known as stimulus payments) to claim their missing money. So if you were eligible for stimulus payments but did not receive them (or you received a partial payment), you can claim them through Recovery Rebate Credit on your tax return.

How to claim Recovery Rebate Credit
Getting your Recovery Rebate Credit is not too complicated. You just need to file the right tax return and you’re good to go. For stimulus payments made in 2020 that you haven’t already received, you can claim the Recovery Rebate Credit on your 2020 tax return. And for payments made in 2021, you will need to file a 2021 tax return.

Even If you don’t usually file taxes but are otherwise eligible for stimulus checks, you will still need to file in order to get your money. And keep in mind – 2023 is the last year to do it! If you need any help along the way, don’t hesitate to reach out to us.

Recovery Rebate Credit vs Stimulus Checks
To put it simply – stimulus payments were actually just advanced payments of the tax credit. The U.S. government provided them in response to COVID-19, aiming to get money into the hands of taxpayers as fast as possible, without having to wait for them to file their tax returns.

In total, three rounds of stimulus checks have been paid out. The amounts you were eligible to receive varied depending on your filing status and other factors.

Recovery Rebate Credit 2020
The first and the second stimulus checks were advance payments of the 2020 Recovery Rebate Credit claimed on a 2020 federal tax return. They were sent out in 2020 and early 2021. Here’s how much the first 2 rounds of Stimulus Checks are worth:
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Written by | Posted in Recovery Rebate Credit • U.S. Expats