How is May treating you all so far? Are you sorting out all the papers and receipts to file your annual US expat taxes? If you haven’t started yet, hurry up. This year’s US expat deadline to file your federal tax return is June 15th and it is just around the corner!
What Are The Most Common Tax Mistakes By Americans Overseas?
Wednesday is a day of our weekly tax infographic and today we want to share the top 5 tax mistakes by Americans living abroad. You might be surprised to learn what your fellow US expats don’t do or do wrong when it comes to fulfilling US tax obligations: Read More
Recently we’ve been asked to cover the topic on filing US federal income tax return if you are a US citizen living in the UK. You asked and we delivered! Read further to learn more about your US and UK tax obligations.
The starting point for any US expat tax-related topic is gaining a clear understanding who needs to file US taxes. Individuals, who are US citizens, including the ones with dual citizenship (UK/US in this case), or Green Card holders abroad who earn a minimum threshold for filing a US tax return are required by US tax law to file a tax return and pay taxes you may owe. Below are numbers for 2017:
Do you know that owning a Controlled Foreign Corporation got affected by New Tax Bill? In a nutshell, Trump’s tax reform now means that all income is Subpart F income. In addition, all currently untaxed retained earnings will be subject to a one-time tax. Read further if you want to find out what it means exactly and how U.S. expats with CFCs are affected.
Let’s take a quick look at a few changes that were introduced in recent tax legislation. Generally, Trump’s tax reform benefits individuals who are struggling with their finances by doubling standard deductions, i.e. from $6,000 to $12,000 for singles, and reducing the rates for five tax brackets of the existing seven. Read More
Even if you have left the United States for a brighter future elsewhere, you (something not as strong) take a moment and think about any obligations you have towards the IRS. The US retains its right to tax globally its citizens and resident aliens who are a citizen or national of a country with which the United States has an income tax treaty in effect. Only two countries have such a citizenship-based taxation system: the United States and Eritrea.
What Is A Foreign Earned Income Exclusion For U.S. Expats?
The Foreign Earned Income Exclusion (FEIE) is offered to US citizens and resident aliens that are living abroad on a consistent basis, have earned income in a foreign country and can prove that they have done so for the past tax year by satisfying either the Physical Presence Test or the Bona Fide Residence. Read More
What Are The Important Updates One Needs To Know About U.S. Tax Reform?
The New Tax Bill “Tax Cuts and Jobs Act” presents the first major overhaul of the United States federal income tax system in more than three decades. The major benefits will be mostly felt by the large and small businesses. But what’s about tax reform’s impact on Americans overseas?
What Has NOT Changed For Americans Overseas?
- You can still use Foreign Earned Income Exclusion or Foreign Tax Credit to lower your tax bill. In 2018 a U.S. expat can exclude up to $104,100 of foreign earned income.
- The reporting requirements for FBAR stay in place: you need to file FinCEN Form 114 if you have an aggregate value of over $10,000 in any foreign financial accounts you own or have a signature over.
- FATCA and Form 8938 also didn’t have any changes (unfortunately).