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Tag Archive for US citizen

Are You An American For Tax Purposes? Are You A U.S. Citizen If You Never Lived In The U.S.?

Are You An American For Tax Purposes?

The U.S. law has different classifications of who and what is considered to be an American(officially, a U.S. person) for tax purposes and it’s important to check if you fall into any of the categories below, hence obliged to report your worldwide income to Uncle Sam.

The Official Term Is “United States Person” And It Includes:

1. A U.S. citizen by birth:

  • You were born in the United States
  • You were born outside of the United States with at least 1 parent who is a U.S. citizen*

2. A resident alien of the United States if you meet one of the two tests:

  • A Green Card test
  • The substantial presence test for the calendar year

Read more

The Trump Tax Reform — What A US Citizen In Israel Should Know

One of the pressing issues of President-elect Donald Trump’s campaign was his proposed tax reform. It is clear that not everything will be passed into law, and in fact changes were made over the course of the presidential race before arriving at the current proposal.  Of course, it is too early to know exactly what will change and by how much, but it is clear that some major changes will be made. With the backing of a Republican majority in both the House and Senate, it should not take long for these changes to happen. Furthermore, many of the changes are not significantly different than previously proposed tax reforms by some Congressmen, which should help ease their passage into law. Read more

FATCA 2015 Roundup: It’s All Serious Business!

TaxConnections Member Manasa Nadig

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

Foreign Trust Protection for Foreign Assets: A Myth Busted!

It is not uncommon anymore that a US Citizen has parents and elders living in foreign countries who may have set up trusts in those countries under (obviously) its laws. There are also US Citizens who have expatriated to/ now live in foreign countries and set up trusts for their children there.

Today’s post was prompted by questions from several clients about an urban legend that seems to be perpetuating itself out there: “You do not have any US tax reporting requirements if you are a US citizen/ permanent resident and your foreign assets and/ investments are in a foreign trust.”

If you have believed this to be true and set up a trust in a foreign country or are thinking of taking this step or are just Read more

Part 11 – Understanding “Exit Taxes”

S. 2801 of the Internal Revenue Code is NOT a S. 877A “Exit Tax”, but a punishment for the “sins of the father”

Updated September 12, 2015 – the IRS has issued “proposed rules”  governing the issue of “The sins of the father”.

The following was a comment on Part 9 of this “Exit Tax” series.

“I know many tax compliant, patriotic Americans who have renounced. Many have done so seeing the $2m threshold approaching, to protect their families and get on with their lives. All with heavy hearts.

You did not mention the additional burden on those who renounce who have US citizen relatives–the tax their Read more

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