January 10, 2015
College Savings Plans for Expats & Chidren - IRC 529 Plan
Great tax saving and planning Tool. Read More
http://blogs.wsj.com/expat/2015/01/05/ask-an-expert-tips-for-u-s-expats-using-529-college-savings-plans/
December 31, 2014
Affordable Health Care Law for Expatriates for 2014 (Obama care rules)
How does the Affordable Care Act affect U.S. citizens living abroad?
U.S. citizens living abroad are subject to the individual shared responsibility provision. However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period regardless of whether they enroll in any health care coverage.
In addition, U.S. citizens who are bona fide residents of a foreign country (or countries) for an entire taxable year are treated as having minimum essential coverage for that year. In general, these individuals qualify for the foreign earned income exclusion under section 911.
Individuals may qualify for this rule even if they cannot use the section 911 exclusion for all of their foreign earned income because, for example, they are employees of the United States. Individuals that qualify for this rule need take no further action to comply with the individual shared responsibility provision during the months when they qualify.
They will report their status with their federal income tax return on Form 8965.
See Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, for further information on the foreign earned income exclusion.
U.S. citizens who do not meet the physical presence or residency requirements must have minimum essential coverage, qualify for a coverage exemption, or make an individual shared responsibility payment when they file their federal income tax returns. Note that minimum essential coverage includes a group health plan provided by an overseas employer.
Download IRS Publication containing all rules by clicking HERE
U.S. citizens living abroad are subject to the individual shared responsibility provision. However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period regardless of whether they enroll in any health care coverage.
In addition, U.S. citizens who are bona fide residents of a foreign country (or countries) for an entire taxable year are treated as having minimum essential coverage for that year. In general, these individuals qualify for the foreign earned income exclusion under section 911.
Individuals may qualify for this rule even if they cannot use the section 911 exclusion for all of their foreign earned income because, for example, they are employees of the United States. Individuals that qualify for this rule need take no further action to comply with the individual shared responsibility provision during the months when they qualify.
They will report their status with their federal income tax return on Form 8965.
See Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, for further information on the foreign earned income exclusion.
U.S. citizens who do not meet the physical presence or residency requirements must have minimum essential coverage, qualify for a coverage exemption, or make an individual shared responsibility payment when they file their federal income tax returns. Note that minimum essential coverage includes a group health plan provided by an overseas employer.
Download IRS Publication containing all rules by clicking HERE
2015Year End Tax Strategies
From USA TODAY 11 year-end tax strategies to use before Dec. 31st http://usat.ly/1DHRTym
December 22, 2014
7 Big Tax Changes in 2015!
From USA TODAY
7 Big Tax Changes in 2015
http://usat.ly/16AaD4k
Get USA TODAY on your mobile device:
http://www.usatoday.com/mobile-apps
December 14, 2014
December 13, 2014
Nonresident Aliens May Be Subject to US Estate Tax (and Must file an Estate Tax Return) on their Assets in the US
Deceased nonresidents who were not American citizens are subject to U.S. estate taxation with respect to their U.S.-situated assets.
U.S.-situated assets include American real estate, tangible personal property, and securities of U.S. companies. A nonresident’s stock holdings in American companies are subject to estate taxation even though the nonresident held the certificates abroad or registered the certificates in the name of a nominee.
Exceptions: Assets that are exempt from U.S. estate tax include securities that generate portfolio interest, bank accounts not used in connection with a trade or business in the U.S., and insurance proceeds.
Estate tax treaties between the U.S. and other countries often provide more favorable tax treatment to nonresidents by limiting the type of asset considered situated in the U.S. and subject to U.S. estate taxation. Executors for nonresident estates should consult such treaties where applicable.
Executors for nonresidents must file an estate tax return, Form 706NA, United States Estate (and Generation-Skipping) Tax Return, Estate of a nonresident not a citizen of the United States, if the fair market value at death of the decedent's U.S.-situated assets exceeds $60,000. However, if the decedent made substantial lifetime gifts of U.S. property, and used the applicable $13,000 “unified credit exemption” amount to eliminate or reduce any gift tax on the lifetime gifts, a U.S. estate tax return may still be required even if the value of the decedent’s U.S. situated assets is less than $60,000 at the date of death (due to the decrease in the “unified credit exemption” for the lifetime gifts). See Unified Credit (Applicable Credit Amount) Section in Publication 559, Survivors, Executors, and Administrators, and the Form 706NA Instructions for more information.
American citizens are subject to U.S. estate taxation with respect to their worldwide assets. An estate tax return, Form 706, United States Estate (and Generation-Skipping) Tax Return, Estate of a citizen or resident of the United States, is required for a deceased American citizen, if the fair market value at death of the decedent's worldwide assets exceeds the "unified credit exemption" amount in effect on the date of death. However, if the U.S. citizen made substantial lifetime gifts, and used the applicable “unified credit exemption” amount to eliminate or reduce any gift tax on the lifetime gifts, a U.S. estate tax return may still be required even if the value of the decedent’s worldwide assets is less than the “unified credit exemption” amount at the date of death (due to the decrease in the “unified credit exemption” for the lifetime gifts). To determine the “unified credit exemption” amount for American citizens for any particular year, refer to the Instructions to Form 706 or to Publication 559, Survivors, Executors, and Administrators.
The Internal Revenue Service may collect any unpaid estate tax from any person receiving a distribution of the decedent’s property under transferee liability provisions of the tax code.
December 10, 2014
2015 New IRS Mileage Rates ..Based on old high Gas Prices
Read more here. http://www.forbes.com/sites/kellyphillipserb/2014/12/10/irs-announces-2015-standard-mileage-rates/
Let's hope gas prices remain down since mileage rates are based on previous high gas prices.
December 3, 2014
Wall Street Journal's Mini Guide to US Expat and Financial Issues
Read Mini Guide for Expats Here
We have over 20 years experience practicing US Expat and International Taxes. If after reading this guide you need assistance with any of the items covered, email us at ddnelson@gmail.com. Visit our websites at www.TaxMeLess.com and www,ExpatAttorneyCPA.com for more useful information.
December 2, 2014
Self Employment Taxes (social security and medicare) for US expatriates working abroad.
The US has social security agreements with the countries listed below. These agreements provide that if a US Expatriate in working in a treaty country, in many instances (it can vary by the country) they may elect coverage under US social security or the social security program of the country in which they live and work. This only applies if the expatriate is self employed. If the US expat is an "bonafide employee" of a foreign corporation subject to all the normal tax withholding and employment laws of that country they do not need to pay US social security.
If the country you work in DOES NOT have a social security agreement with the US, you must pay US self employment tax (social security plus medicare tax) on your net self employment income (after deducting expenses) whether or not you are paying social security or its equivalent in your country of employment.
The foreign earned income exclusion does not apply to US self employment taxes and does not reduce the self employment tax you owe even though it does reduce you income subject to US income taxes.
Social Security Handout on International Social Security Agreements Benefits
| Countries with Social Security Agreements | |
|---|---|
| Country | Entry into Force |
| Italy | November 1, 1978 |
| Germany | December 1, 1979 |
| Switzerland | November 1, 1980 |
| Belgium | July 1, 1984 |
| Norway | July 1, 1984 |
| Canada | August 1, 1984 |
| United Kingdom | January 1, 1985 |
| Sweden | January 1, 1987 |
| Spain | April 1, 1988 |
| France | July 1, 1988 |
| Portugal | August 1, 1989 |
| Netherlands | November 1, 1990 |
| Austria | November 1, 1991 |
| Finland | November 1, 1992 |
| Ireland | September 1, 1993 |
| Luxembourg | November 1, 1993 |
| Greece | September 1, 1994 |
| South Korea | April 1, 2001 |
| Chile | December 1, 2001 |
| Australia | October 1, 2002 |
| Japan | October 1, 2005 |
| Denmark | October 1, 2008 |
| Czech Republic | January 1, 2009 |
| Poland | March 1, 2009 |
| Slovak Republic | May 1, 2014 |
December 1, 2014
10 Most Tax Friendly States for Business in the US - For expat business owners and nonresidents
When you operate your business from abroad as an expat or as a nonresident, and need a US location for a US corporation or LLC, it is best to set it up in a state with no or low taxes to keep your costs tax expenses at a minimum. Read the following article to find out the best states in which to locate.
http://www.marketwatch.com/story/10-most-tax-friendly-states-for-business-2014-11-19
http://www.marketwatch.com/story/10-most-tax-friendly-states-for-business-2014-11-19
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