New China tax Residency Requirements for US Expats Explained

http://www.china-briefing.com/news/2014/03/18/china-expat-tax-filing-and-declarations-for-2013-income.html

TAX RULES FOR CHILDREN WITH INVESTMENT INCOME

You normally must pay income tax on your investment income. That is also true for a child who must file a federal tax return. If a child can’t file his or her own return, their parent or guardian is normally responsible for filing their tax return.

Special tax rules apply to certain children with investment income. Those rules may affect the tax rate and the way you report the income.

Here are four facts from the IRS that you should know about your child’s investment income:

1. Investment income normally includes interest, dividends and capital gains. It also includes other unearned income, such as from a trust.

2. Special rules apply if your child's total investment income is more than $2,000. Your tax rate may apply to part of that income instead of your child's tax rate.

3. If your child's total interest and dividend income was less than $10,000 in 2013, you may be able to include the income on your tax return. If you make this choice, the child does not file a return. See Form 8814, Parents' Election to Report Child's Interest and Dividends. 

4. Children whose investment income was $10,000 or more in 2013 must file their own tax return. File Form 8615, Tax for Certain Children Who Have Investment Income, along with the child’s federal tax return.

Starting in 2013, a child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax. NIIT is a 3.8% tax on the lesser of either net investment income or the excess of the child's modified adjusted gross income that is over a threshold amount. Use Form 8960, Net Investment Income Tax, to figure this tax. For more on this topic, visit IRS.gov.

For more on this topic, see Publication 929, Tax Rules for Children and Dependents. Visit IRS.gov to get this booklet and IRS forms.

Simplified Home Office Deduction Explained By IRS

http://content.govdelivery.com/accounts/USIRS/bulletins/aba73d?reqfrom=share

Are You Inviting An Audit?

http://triblive.com/mobile/5740073-96/irs-business-audit

PROBLEMS WITH FOREIGN PENSION PLANS

Excellent article  from Forbes.  http://www.forbes.com/sites/janetnovack/2014/03/06/pensions-create-yet-another-tax-trap-for-u-s-expatriates/

600,000 Dollars in Cash Hidden in Foreign Bank Causes Taxpayer to Go to Prison

California Taxpayer put earnings in Swiss Bank and did not file Fbar sentenced to prison for one year and pays over $500,000 in penalties and taxes. Read more below

http://www.imperialvalleynews.com/index.php/news/california-news/7369-california-man-sentenced-to-prison-for-failure-to-report-foreign-bank-accounts-held-at-ubs.html

Bank deal fallout: ‘Chaotic’ US tax stampede overwhelms specialists - swissinfo.ch

Bank deal fallout: ‘Chaotic’ US tax stampede overwhelms specialists - swissinfo.ch  We can help you no matter where you are in the world prepare past tax returns and enter the IRS Offshore Disclosure Program, Streamlined Program or Regular Disclosure Program.  Visit our website at www.TaxMeLess.com for more information or email me at ddnelson@gmail.com  When offer our clients the absolute confidentiality and privacy of Attorney-Client Privilege.

IRS Examining Foreign Life Insurance and Other Products to Discover Hidden Foreign Assets and Income

The Wall Street Journal articles indicates the IRS is now getting smarter. They are starting to examine offshore insurance products owned by US taxpayers. These policies are often used to hide foreign assets and foreign income not being reported on the tax returns of their US owners.  If you have cash surrender value or assets in a foreign life insurance policy you are required to show that policy on your US FBAR each year and may be required to report the income. It would also go on form 8938 if you are required to file that form.  If the policy holds foreign mutual funds you may be required to file the form reporting Passive Foreign Investment Companies also to avoid adverse tax consequences.

READ ARTICLE HERE

Rules for each State on How to Stop Filing and Paying State Income Taxes when an Expat Moves Abroad.

Great article from BNA including a chart listing tax laws and rules for each state in the US stating their individual rules (vary a lot from state  to state) on how to successfully terminate your state tax domicile when moving abroad. The chart at the end is a great reference tool to use when you want to stop paying state income taxes when you move to live and work abroad.  DOWNLOAD PDF ARTICLE HERE

If you need guidance on how to avoid paying state income taxes after moving abroad we can put together a strategy for you.  Email us at ddnelson@gmail.com

Where Offshore Tax Form Evaders Live and Keep Their Foreign Accounts

From Forbes.  Looks like if you live in California or New York you are primary suspect based on IRS statistics.  http://www.forbes.com/sites/ashleaebeling/2014/02/20/gao-report-where-offshore-tax-evaders-live-and-bank/

5 Most Tax Friendly States For Expats or Nonresidents to Locate a U S Business

Read the following link. Wyoming is no. 1. We recommend Nevada for ease of operation. Its no. 3.

http://www.dailyfinance.com/2014/02/15/the-5-most-tax-friendly-states-for-running-a-busin/

FBAR and Form 8938 Presentation in Puerto Vallarta & Melaque Mexico

US Expat Foreign Bank, Financial & Asset Reporting Guidance from dondnelson

Estate Planning Tips For Expats from Motlley Fool

http://www.fool.com/investor-alert/1255/estate-planning-loopholes-dont-let-uncle-sam-inher/?iid=61836479&vsaid=7123&email=ddnelson%40gmail.com&dest_url=%2Finvestor-alert%2F1255%2Festate-planning-loopholes-dont-let-uncle-sam-inher%2F&src=eunlinsbr0860003

4 Common Myths About Taxes

From USA TODAY 4 common myths about taxes It's not that surprising that there's a lot of misinformation out there about taxes. The U.S. tax code is over 4 million words long and not one of us has the time to go through it all. Most of us treat the tax code like the monster it is, interfacing with it only from a distance and once a year paying homage to it in the form of a tax return. Since there's so much to know about taxes and so little willingness to learn about them, people sometimes make assumptions about how the system works that turn out to be false. These bits of false information sometimes take on a life of their own and, unfortunately, become common knowledge. This is problematic because a misunderstanding of how the tax system works can have consequences — most personal financial planning requires a basic, and reality-based, understanding of how taxes work. Otherwise, you could find yourself owing a lot more money than you expected — or, at least, worrying about irrelevant details when you should be relaxing. http://usat.ly/1lPpttt Get USA TODAY on your mobile device: http://www.usatoday.com/mobile-apps

US EXPATRIATE AND INTERNATIONAL TAX EXPERT ATTORNEY CPA TO SPEAK AT FREE PUBLIC SEMINAR ON FEBRUARY 12, 2014 IN PUERTO VALLARTA, MEXICO

FATCA AND IRS REPORTING FOR DUMMIES - INVESTING IN MEXICO MADE EASY

INTERCAM GRUPO FINANCIERO will Present a Seminar on February 12, 2014 in Puerto Vallarta at the Hotel Marriott Casa Magna featuring Don D. Nelson, US Attorney and CPA.  He is a US expatriate and international tax expert who has been assisting Americans in Mexico for over 23 years.  The seminar will be at 6pm.

He will speak on:

• IRS filing requirements for reporting Mexican and other foreign financial accounts and how to avoid penalties for failing to file in a timely manner.
• The new form 8938 required to report Mexican and other foreign financial assets
• The new on line filing requirements for FBAR (foreign bank account reporting).  Yes you can no longer file on paper.
• IRS Reporting for Mexican Businesses, Corporations, and real estate.
• What to do if you have not been filing your US tax returns or foreign assets reporting forms and how to reduce or avoid the high penalties that may be imposed.
• Current IRS audit procedures and policies for expatriates.
• And he will answer your other questions on US taxation of those who live and work in Mexico

Don's informative and useful tax websites are located at www.TaxMeLess.com and www.Expatattorneycpa.com

Contact intercam at 52-322-2090696 to reserve your space.

Mr. Nelson will also be presenting a seminar in Melaque  the next evening. Intercam can provide you with more information on that seminar.

IRS TAXES CANNOT BE AVOIDED BY MOVING ABROAD

Read why 6.3 million Americans living abroad still must file a US tax return each year.  http://finance.yahoo.com/news/non-us-residents-abroad-must-file-income-taxes-195444214.html

INTERNATIONAL TAX RATES AROUND THE GLOBE

Click here for a great graphic with the international tax rates around the world (both corp and individual) including other interesting facts from INTERNATIONAL RELATIONS ON LINE.  You can use it to plan where to locate your business and personal affairs.

Need more information on US International Taxation, email us ddnelson@gmail.com or view more information at TAXMELESS.COM

US TAXATION OF FOREIGN INVESTMENTS

Great article from Forbes Magazine. ..foreign tax credits and foreign mutual funds explained. http://www.forbes.com/sites/investopedia/2014/01/31/understanding-taxation-of-foreign-investments/

Learn more at www.Taxmeless.com. Questions? Email ddnelson@gmail.com

Qualifying for the Foreign Earned Income Exclusion Physical Presence - When You Have Foreign Residence or Tax Domicile

The IRS can cause you problems if you claim a foreign residence for the Physical Present Test when attempting to use the  foreign earned income exclusion on your tax return. Factors that are looked at to determine if you have a foreign residence are:

In Sochurek v. CIR, the Court of Appeals for the Seventh Circuit listed some of the factors to be weighed in determining a taxpayer's residence:

a. The taxpayer's intention.

b. Establishment of a home temporarily in the foreign country for an indefinite period.

c. Participation in the activities of the community on social and cultural levels, identification with the daily lives of the people, and, in general, assimilation into the foreign environment.

d. Physical presence in the foreign country consistent with the taxpayer's employment.

e. The nature, extent, and reasons for temporary absences from the foreign home.

f. Assumption of economic burdens and payment of taxes to the foreign country.

g. Status of a resident of the foreign country as contrasted to that of a transient or sojourner.

h. The taxpayer's employer's classification of the taxpayer's income tax status.

i. Marital status and residence of the taxpayer's family.

j. Nature and duration of his employment; whether his assignment abroad could be promptly accomplished within a definite or specified time.

k. Whether the taxpayer's purpose in establishing a foreign home is tax evasion.

Want help with your tax return or have expat or international tax questions. Email us at ddnelson@gmail.com.  We have been doing expat taxes for over 30 years.

IRS DELAYS 2013 FILING START DATE

Due to government shut downs in 2013, IRS will not start processing 2013 Tax returns until end of January 2014.  We have noted that the IRS is slow or running behind on almost everything else too. The filing deadlines have not been extended!

We can still get started on your expat or nonresident tax return right now so you can file by the date the IRS is ready to go.  You can download our forms at our website at www.TaxMeLess.com