800-644-9293 info@thetaxfirm.com

Expatriates and Foreign National Tax Preparation Services

The Tax Professionals at TheTaxFirm.com provide a variety of tax preparation and compliance services to individuals and businesses. We have the knowledge needed to help you understand all your international tax and compliance obligations, and will take an in-depth look at your foreign financial accounts to determine what forms are applicable to you, as well as to help you find and take advantage of plans that will save you money.

Expat Americans

As an American living abroad, you are obligated to report your income to the IRS as well as your country of residence. While at first glance this may seem like an enormous tax burden, keep in mind that governments offer numerous resources and programs to help ensure you don’t have to pay the full amount to both countries. We have in-house International Tax Experts who will work directly with you to ensure your tax return is filled correctly.

 

Foreign Bank Account Report (FBAR)

The FBAR is a relatively recent IRS initiative that may require persons or companies that are involved with financial accounts outside of the US to disclose them to the IRS by filing Form TD F 90-22.1. This information is particularly relevant to US residents and companies, expatriates, and anyone who owns, controls, or has signature authority over a foreign account. This includes foreign bank and brokerage accounts, offshore investments, and overseas pension plans, to name a few. Essentially, if you are involved with a financial account at an institution that is physically outside the United States, you may need to meet FBAR requirements.
One FBAR requirement is that you must file if the sum total of your accounts exceeds $10,000 at any time during the calendar year. The penalties for failing to file a complete and accurate report can leave you facing fines of $10,000 per year.
A few other items to keep in mind are that the FBAR is a calendar year report due June 30 and extensions are rare. Furthermore, depending upon your exact situation and the status of your accounts, you may be required to file additional international tax forms to ensure the complete disclosure of all your international accounts.

Foreign Account Tax Compliance Act (FATCA)

As with the FBAR, not filing a FATCA will have serious penalties. Overall, the FATCA expands the IRS’ ability to track down unreported accounts, and punishments for discovery are even more severe. Foreign financial institutions (and even certain non-financial) institutions may be forced to provide the IRS with information about accounts held by Americans. While the targets of these provisions are obviously foreign banks and brokerage firms, foreign hedge funds, private equity funds, and trusts may also be classified as foreign financial accounts under the FATCA. Thus you may be required to file a FATCA.

Penalties for non-compliance are harsh, and failure to report can add up to $50,000 in fines. Additionally, the FATCA may extend the three-year statute of limitations to six-years if you neglect to report over $5,000 of income attributable to one of the above assets.

Foreign National Taxes – Non-Citizens And Tax Filing

Everyone living and working in the United States owes taxes, but your specific obligations will vary depending on your residency status and occupation. Yes, it sounds complicated, but there are several ways to ensure you are not overpaying on your taxes, and with the right accountant by your side the whole process can become far less stressful.

Resident

There are two ways to determine whether or not you are a resident. A green card accords you the privilege of permanent residency in the United States as an immigrant. Those who do not possess a green card can qualify for residency if they can prove a physical presence in the country for the requisite time period through the Substantial Presence Test.

As a resident non-US citizen you follow the same rules and procedures as a US citizen; however, you will pay taxes on your worldwide income rather than just US income. The terms of your visa may also require you to file income taxes, and in the future, it may be necessary to show proof to change the status of the visa, obtain permanent residency, or re-enter the US once you have left. Failure to comply with US tax laws could easily have a dramatic impact on your future.

Non-Resident Alien

Non-US citizens who do not qualify under either of the Resident Alien tests are still required to pay taxes on assets or income earned in the US. However, there are special tax forms, rates, and treaty exemptions that non-residents may qualify for.

Additionally, some studies have shown that the majority of non-residents either do not file or do so incorrectly, which eventually results in a massive overpayment of US taxes by these residents.

Dual-Status Alien

The US government may consider you a resident responsible for paying taxes from the first day you are present in the US as a permanent resident. For those who were nonresidents who obtained resident status during the first year of residency, you may be classified as a dual-status alien for tax purposes. As such, you may have to file under a separate return and cannot claim the standard deduction or dependency exemptions.

Keep in mind that these categorizations are merely a basic overview of the residency classifications, and there are numerous additional things to consider when filing your taxes. It is highly recommended that you contact an accountant with the expertise to understand your unique situation so that you fill out all the correct and necessary forms so that you get all the money that is owed to you and your residency status remains secure. in mind that these categorizations are merely a basic overview of the residency classifications, and there are numerous additional things to consider when filing your taxes.

Tax Forms for Expats and other International Tax Fillings.

Form 2555 — Foreign Earned Income Exclusion. To qualify you must prove that you work and reside outside of the US by meeting the bona fide resident and physical presence test. If you are eligible you are able to exclude at a certain amount (exact number changes each year) of your foreign earned income from US taxation.

Form 1116 — Foreign Tax Credit or Deduction. You can file this form to claim a credit or deduction if you have paid or accrued taxes to a foreign country. You cannot claim a credit for income which has been excluded from taxation by Form 2555. By claiming a credit for taxes paid to foreign countries you are able to reduce your tax liability to the US on a dollar for dollar basis

Form 8938 — Statement of Foreign Financial Assets (FATCA). Anyone who possesses foreign accounts or assets with an aggregate value of over $50,000 are required to file a FATCA. This applies to investments in foreign hedge funds and private equity funds as well as bank accounts and stocks or bonds.

Form TD F 90-22.1 — Report of Foreign Bank and Financial Accounts (FBAR). All US Persons with a financial interest in, or signature authority over foreign financial accounts if the balance of all those accounts exceeds $10,000 at any point during the calendar year.

Form 5471 — Information Return of US Persons with Respect to Certain Foreign Corporations. US Persons who own more than 10% of the shares of a foreign corporation must file this form with their income tax.

Below are some of the additional forms we provide for both individuals and corporations in need of tax services: For additional information regarding any of these forms or the services we provide please call:

926 — Return by a US Transferrer of Property to a Foreign Corporation

1042 — Annual Withholding Tax Return for US Source Income of Foreign Persons

1042 — Foreign Persons US Source Income Subject to Withholding

8828 — US Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests

3520 — Annual Return to Report Transactions with Foreign Trusts and Receipt of Foreign Gifts

3520-A — Annual Information Return of Foreign Trust with a US Owner

8833 — Treaty-Based Return Position Disclosure

1118 — Foreign Tax Credit (Corporations)

8858 — Information Return of US Persons with Respect to Foreign Disregarded Entities

8865 — Return of US Persons with Respect to Certain Foreign Partnerships

8621 — Passive Foreign Investment Company

Have questions? Get in touch with us.
  • Should be Empty:

Have Questions?