US Enterepreneurs Living Abroad May Need To File Special Forms

If you live abroad and have your own business, you may need to file special forms with your tax return. If you own more than 10% of a foreign corporation, you may be required to file Form 5471 or pay penalties of $10,000 US for each failure to file the form. This forms reports on the ownership, income and expenses of the foreign corporation.

If you operate through a foreign partnership, you may be required to file Form 8865 which reports on the ownership, income and expenses of that partnership. Again failure to file this form can result in a $10,000 per year penalty.

If you have a foreign bank account, stock market account, or other financial accounts that any tiem during the year had more than $10,000US in it or a group of such accounts, you must file Form TDF 90.22-1 which is not filed with your tax return, but is due 6/30 of each year. It reports information on the account and its ownership.

Corporate Tax Equilization Policies for Executives Working Abroad

Corporate tax equilization policies are not always fair to corporate executives working abroad. If you participate in such a program and suspect it is not fair, you can have it reviewed by an expert to determine if you are actually benefiting. If you live in a low tax country, in most instances no tax equilization is better than equiliztion. That will often leave you with much more money in your pocket.

1031 Tax Free Exchanges Outside of US

1031 Tax Free Real Estate Exchanges are not allowed out of or into the US to or from a foreign country. Therefore, taxes must be paid if you sell your US property and want to reinvest it abroad. However, 1031 exchanges are allowed between one foreign property and another (so long as both are located outside of the US).

Voting While Living Abroad in US Presidential Elections

Even though you no longer have a residence in any US state, you can still vote in any US presidential election by following certain procedures mandated by the federal government. It can all be done by mail and you will vote by mail with an absentee ballot. Just click the title to this piece and you will be brought to a page that tells you how.

Status of Forces Agreements May Cause Problems

If you are living in a foreign country and do not have to pay income taxes in that country due to a status of forces agreement because you work for a civilian contractor hired by the US military or government, it may adversely affect you ability to claim the Section 911 foreign earned income exclusion. Revenue Rulings have held that for Vietnam and Japan such an agreement will not allow you to use the bonafide residence test to qualify for the exclusion. One ruling does hold that due to the facts and circumstances and wording of the status of forces agreement with the UK, a residence can still claim the exclusion.