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Showing posts with label expat tax return preparation. Show all posts
Showing posts with label expat tax return preparation. Show all posts

December 28, 2019

30 YEARS US INTERNATIONAL, EXPAT AND NONRESIDENT EXPERIENCE - US TAX ATTORNEY AND CPAS ARE HERE TO HELP YOU.

Over 30 years of Internatinal Tax and Legal Expertise by CPAs and Attorneys provide you with the answers and guidance you need:

Tax Services
  • US Expatriate Tax Planning & Return Preparation 
  • International Tax Planning for Corporations, LLCs, Partnerships and Trusts 
  • Past Year  Unfiled Returns for  Internal Revenue Service and all States 
  • International Estate Planning
  • Formation of US Corporations, Limted Liability Companies and Other Entities for use by offshore owners
  • US Nonresident Taxation
  • Corporate Expatriate Tax Equilization Assistance and Review
  • Phone and Email Consulations on all U.S. Tax Matters as affecting those living abroad and offshore.
  • Foreign bank and financial account reporting.
Tax Services for those working and residing in Mexico
  • Preparation of individual, Expatriations US Returns in coordinateions with Mexican tax law.
  • Mexican - US Business, personal and real estate tax planning.
  • Preparation of Past Year Unfiled US Tax Returns
  • Preparation of special US Tax Forms Required for those owning real estate or operating businesses in Mexico for Mexican Corporations, Fideicomisos, Mexican Bank Accounts, etc.

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  • U.S. Real Estate Law - Purchases, Sales and Leases
  • Nonresident ownership of US Real Estate
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January 31, 2013

15 US 2012 Tax Facts for Americans Living and Working Abroad


By Don D. Nelson, Attorney, C.P.A.
Kauffman Nelson LLP

If you are a US Citizen you must file a US tax return every year unless your taxable income is less than $15,700 - for a joint return or $ 9,750 - for a single return (these amounts are for 2012 and are lower amounts for earlier years) or have self employment-independent contractor net self employment income of more than $ 400 US per year. You are taxable on your worldwide income regardless of whether you filed a tax return in your country of residence. You must file a tax return each year if you income exceeds the amounts stated above even if you owe no tax.

  • As an US expatriate living and working abroad 4/15, your 2012 tax return is automatically extended until 6/15 but any taxes due must be paid by 4/15 to avoid penalties and interest. The return can be further extended until 10/15/10 if the proper extension form is filed.

  • For 2012 if you are a qualified expatriate you get a foreign earned income exclusion (earnings from wages or self employment) of $95,100, but this exclusion is only available if you file a tax return. You must qualify under one of two tests to take this exclusion: (1) bonafide resident test or (2) physical presence test. You can read more about how to qualify in IRS Publication 54.

  • If your spouse works and lives abroad, and is qualified, she or he can also get at $95,100 foreign earned income exclusion.

  • If your foreign earnings from wages or self employment exceed the foreign earned income exclusion you can claim a housing expense for the rent, utilities and maintenance you pay if those amounts that exceed a minimum amount of $15,216 up to a maximum amount which varies by your country of residence.

  • You get credits against your US income tax obligation for income taxes paid to a foreign country but you must file a US tax return to claim these credits.

  • If you own 10% or more of a Foreign corporation or Foreign partnership (LLC) you must file special IRS forms each year or incur substantial penalties which can be greater including criminal prosecution if the IRS discovers you have failed to file these forms.

  • If you create a foreign trust or are a beneficiary of a foreign trust you may be obligated to file forms 3520 and /or 3520A each year to report those activities or be subject to severe penalties. Foreign foundations and non-profits which indirectly benefit you may be foreign trusts in the eyes of the IRS.

  • Your net self employment income in a foreign country (earned as an independent contractor or in your own sole proprietorship) is subject to US self employment tax of 15.3% (social security) which cannot be reduced or eliminated by the foreign earned income exclusion. The one exception is if you live in one of the very few countries that have a social security agreement with the US and you pay that countries equivalent of social security.

  • Forming the correct type of foreign corporation and making the proper US tax election with the IRS for that corporation may save you significant income taxes and avoid later adverse tax consequences. You need to take investigate this procedure before you actually form that foreign because it can be difficult to make that election later.

  • If at any time during the tax year your combined highest balances in your foreign bank and financial accounts (when added together) ever equal or exceed $10,000US you must file a FBAR form with the IRS by June 30th for the prior calendar year or incur a penalty of $10,000 or more including criminal prosecution. This form does not go in with your personal income tax return and is filed separately to a different address.

  • In the past several years the IRS has hired thousands of new employees to audit, investigate and discover Americans living abroad who have failed to file all necessary tax forms. These audits have begun and will increase significantly in the future. The IRS gets lists of Americans applying or renewing for US passports or entering the country. They will compare these lists with those who are filing US income tax returns and take action against those who do not.

  • Often due to foreign tax credits and the the foreign earned income tax expats living abroad who file all past year unfiled tax returns end up owing no or very little US taxes. The IRS has several special programs which will help you catch up if you are in arrears which will reduce or possibly eliminate all potential penalties for failing to file the required foreign asset reporting forms. We can direct you to the best program for your situation, prepare the returns and forms and represent you before the IRS.

  • Beginning in 2011 a new law went into effect which requires all US Citizens report all of their world wide financial assets with their personal tax return if in total the value of those assets exceed certain minimum amounts starting at $50,000 . Failure to file that form on time can result in a penalty of $10,000.

  • Certain types of income of foreign corporations are immediately taxable on the US shareholder's personal income tax return. This is called subpart F income. The rules are complex and if you own a foreign corporation you need to determine if these rules apply to you when you file the required form 5471 for that corporation.

  • If you own investments in a foreign corporation or own foreign mutual fund shares you may be required to file the IRS forms for owning part of a Passive Foreign Investment Company (PFIC) or incur additional, taxes and penalties for your failure to do so. A PFIC is any foreign corporation that has more than 75% of its gross income from passive income or 50 percent or more of its assets produce or will produce passive income.

Download your 2012 US tax return questionnaire prepared expressly for Americans living abroad at www.TaxMeLess.com or at www.ExpatAttorneyCPA.com Please send us your completed questionnaire for a fixed fee quote for the preparation of your return.
Don D. Nelson, US Attorney, CPA
Kauffman Nelson LLP
Dana Point, California 92629 USA
US Phone: (949) 481-4094, US Fax: (949) 218-6483
Skype: dondnelson

Visit our International Tax Blog for the Latest Expat and International Tax Developments at www.usexpatriate.blogspot.com.

We have been preparing tax returns and assisting US clients located in over 50 countries around the the world for over 30 years. We also assist US Nonresidents meet their US tax obligations and return filing requirements. Email, skype or phone us for immediate assistance. We offer mini consultations (with attorney client privilege) to answer your tax questions and resolve your tax issues.
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Disclaimer and Conditions: The information contained herein is general in nature and is not to be construed or relied on as tax or legal advice with respect to you individual tax situation or questions. Your use of this material does not create any attorney/CPA relationship between you and this firm or any other obligation. You are advised to retain competent tax professionals help with your individual tax matters and for appropriate answers your specific tax questions.








March 7, 2012

US EXPATRIATE TAX RETURN DUE DATES FOR 2011

Expatriates who live and work abroad on April 16th, 2012, receive an automatic extension of time to file their US income tax returns until June 15th, 2012.  They do not need to even file an extension request. If additional time is required after that date they can obtain a further extension by filing form 4868 by June 15th, which will extend their return until 10/15/12.  Therefore, it may be be possible to get a further extension until 12/15/12 by filing a letter request with the IRS.  

Regardless of any extensions you receive or apply for as an expat, any taxes that are due for 2011 must be paid by 4/16/12 in order to avoid interest and penalty assessments for paying any taxes due at a later date. It is important (if you return is not completed yet) to file your expat extension by 6/15/12 since that will stop the IRS of assessing the largest penalty which is 5% (of the tax due with the return) per month up to a maximum of 25%  (of the tax due with the return) for filing your return late.

Your FBAR form TDF 90-22.1 (filed to report foreign bank and financial accounts) must be filed no later than June 30, 2012 for the 2011 Calendar year.  That form is filed separately from your tax return and cannot be extended beyond that date.

Most of the other special forms filed to report your offshore activities such as 8938, 5471, 3520, 8865, etc., due on the extended due date of your personal tax return.  The one exception is Form 3520A( filed for foreign trusts and Mexican Fideicomisos) is due 3/15/12 for 2011, but can be extended with Form 7004 to September 15, 2012.

February 20, 2012

QUICK U.S. TAX FACTS FOR EXPATRIATES AND AMERICANS LIVING ABROAD



· If you are a US Citizen you must file a US tax return every year unless your income is less than
$ 9,500 (for 2011 and lower for earlier years) or have self employment-independent contractor  net income of more than $  400 US per year.  You are taxable on your world wide income and required to report it regardless of whether you filed a tax return in your country of residence.
· As an US expatriate living abroad on 4/15, your 2011 tax  return is automatically extended until 6/15 but any taxes due must be paid by 4/15 to avoid penalties.  The return can be further extended until 10/15/12 if the proper extension is filed. You may even be able to get a further extension until 12/15if you send the IRS the proper letter.
· For 2011 if you are a qualified expatriate you get a foreign earned income exclusion (earnings from wages or self employment) of $92,900, but this exclusion is only available if you file a tax return.
· If your spouse works and lives abroad, and is qualified, she can also get at $92,900 foreign earned income exclusion. A foreign housing deduction or exclusion is also available if you earn in excess of the foreign earned income exclusion. This amount varies by country.
· You get credits against your US income tax obligation for the taxes paid to a foreign country on that same income but you must file a return to claim those credits.
· If you own 10% or more of a  foreign  corporation, LLC or partnership or are a beneficiary of a Foreign Trust such as a  Fideicomiso in Mexico, you must file special IRS forms each year or incur substantial penalties which can be greater including criminal prosecution if the IRS discovers you have failed to file these forms.
· Your net self employment income or independent contractor income  is subject to US self employment tax of 15.3% (social security) which cannot be reduced or eliminated by the foreign earned income exclusion unless you work in one of the few countries the US Social Security Administration has a social security agreement with and pay social security to those countries. If you live in one of those countries you must secure a required certificate to prove your exemption from US self employment tax.
· If at any time during the tax year your combined highest balances in your  foreign bank and financial accounts such as brokerage accounts, cash surrender value of foreign life insurance policies, foreign pensions, etc. (when added together) ever equal or exceed $10,0US you must file a FBAR form with the IRS by June 30th for the prior calendar year or incur a penalty of $10,000 or more including criminal prosecution. This form does not go in with your personal income tax return and is filed separately to a different address.
· In the several past year the IRS has hired more than 2,000 new employees to audit, investigate and discover Americans living abroad who have failed to file all necessary tax forms.
· Often due to foreign tax credits and the the foreign earned income exclusion expats living abroad  when filing  all past year unfiled tax returns and end up owing no or very little US taxes.
· Beginning in 2011a new law is in effect which requires all US Citizens report all of their world wide financial assets if in total the value of those assets are $50,000 or more on form 8938. 
· Income from certain types of foreign corporations are immediately taxable on the US shareholder's personal income tax return.  If your corporation only provides your personal services to customers you may have a Foreign Personal Holding Company which would cause all income to be immediately taxable to you. Income may also be immediately taxable when the income is from investments, rents, etc. This is call “Subpart F” income.
· If you own investments in a foreign corporation or own a foreign mutual fund shares you may be required to file the IRS forms for owning part of a Passive Foreign Investment Company (PFIC) or incur additional, taxes and penalties for your failure to do so. A PFIC is any foreign corporation that has more than 75% of its gross income from passive income or 50 percent or more of its assets produce or will produce passive income.
· The IRS is now matching up your US passport with your US tax records and knows if  you  have not been filing all required US tax returns while you are living  Abroad.  The IRS will shortly start matching up information received from Foreign Banks with US tax returns and required FBAR forms. If you have not been reporting, now is the time to start.

· Download your 2011 US tax return questionnaire prepared expressly for Americans living in Abroad   HERE.
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 Don  D. Nelson, CPA, Attorney (Kauffman Nelson LLP) has been assisting US Citizens , Permanent Residents and nonresidents in over 40 countries around the world with their US tax planning, tax return preparation, and other tax / legal matters for 20 plus years. He offers his clients attorney-client privilege which is not available from other tax accountants. He has helped hundreds of US expatriates around the world “catch up” filing their past late returns most often with little or no tax cost to you the delinquent taxpayer. His main office is at 34145 Pacific Coast Highway #401, Dana Point, California 92629 USA.


Our Tax Services Include

  • US Expatriate and International Tax Return Preparation.
  • US Nonresident return preparation.
  • Review of IRS International Tax Forms Prepared by you or your tax preparer.
  • Preparing and filing tax returns for past years – Our “Catch Up” tax service.
  • Surrender of US Citizenship or Green Card Tax Planning and Assistance.
  • International Business Tax Planning and compliance.
  • IRS Offshore Voluntary Disclosure Reprsentation and filing.
  • IRS Audit Representation with respect to Expatriate and International Tax Issues

Mini Tax Consultations are available for you to discuss your situation with Don your personally and secure his counsel resolving your tax problems and future tax planning by phone or email. No personal visit is required. All consultations are subject to the absolut privacy and confidentiality of Attorney-client privilege. LEARN MORE HERE.