All Blog Posts by America's International Tax Experts
US or Foreign Income? The Ultimate D-I-Y Guide.
Is it important to know whether your income is attributable to the USA or another country? In fact, the determination of the source of an item of income is a number one priority when it comes to taxation rights, allocation of deductions, and foreign tax credit provisions. As an ease to taxpayers, we have developed this do-it-yourself guide to explain some of the most relevant source of income rules. For simplicity and transparency, we have also presented 14 real-life examples!READ MORE
The 12 Bona Fide Residence Test Factors
US citizens and residents are subject to tax on worldwide income regardless of the location of their permanent home. Expatriates and Americans who are continuously living overseas are still required to file US income tax return and pay any taxes due. Because of the immense burden on taxpayers, Section 911 of the Tax Code was enacted to heave a sigh of relief. The current language of the statute has its roots back to 1942 when Congress considered it necessary to encourage, promote and stimulate international trade, by providing foreign earned income exclusion. The exclusion is capped at $100,800 for 2015 and $101,300 for 2016 tax year. Foreign earned income is defined as income derived from or attributable to services performed in a foreign country. But what is the definition of a foreign country?READ MORE
The Streamlined Foreign Offshore Procedure: From A to Z
The Streamlined Foreign Offshore Procedure (SFOP) was developed by the IRS to address noncompliance with the foreign financial assets reporting requirements, an omission of a foreign-source income or a failure to file certain information returns. The streamlined procedure is available to US citizens, expatriates and residents whose noncompliance with the internal revenue laws was not borne by a willful conduct or an attempt to avoid paying taxes in the United States. If you have resided outside the United States and you failed to file returns or under-reported foreign-source income, the SFOP is the shortest way to regain compliance without the burden of severe penalties. So what is the fuss about it?READ MORE
Taxes and Amazon. All that international FBA sellers must know!
The Fulfillment-By-Amazon turned out to be a striking opportunity for nonresident individuals and companies. So what it takes to transform your small business into an Amazon extravaganza? A great place to find answers is the Fulfilled-By-Amazon information page. It comes with a bunch of useful information, such as a start-up guide, labeling and packaging instructions, fees, terms, case studies, and more. Still, the information about your U.S. tax obligations is obscure. This article aims to provide clear guidance on the key elements that nonresident individuals and non-US businesses must consider before conquering the U.S. market through an FBA agreement.READ MORE
Fraud & Tax Numbers. The IRS revokes ITINs not used on a return.
The Individual Taxpayer Identification Number (ITIN) is a nine-digit number that is used to identify certain individual taxpayers within the tax system. The ITIN is assigned directly by the IRS to eligible nonresident and resident taxpayers who do not have and do not qualify for a Social Security Number. The first ITIN was issued back in 1996 when the IRS replaced the temporary Internal Revenue Service Number (IRSN) with the ITIN as a mean to address accurate identification of international taxpayers with tax return filing or reporting requirements. Until recently, the number was personal and valid for life. Well, not anymore!READ MORE
10 Real-Life Examples Why American Expatriates Should File a U.S. Tax Return
Believe it or not, American citizens and residents are obliged to file a U.S. income tax return even if residing outside the United States. Despite the media coverage of the IRS efforts to enforce offshore compliance, many taxpayers are still unaware of the tax implications that follow a decision to relocate abroad. On the other side are the taxpayers who knowingly object filing a return for a number of reasons ranging from a frustrated "It's not fair!" or "Why to pay taxes if I live abroad?" to the stranded "I'd never go back!" To all of you, regardless of your reasons, these real-life examples will make you think twice when the tax season comes!READ MORE
Trump on Taxes! The Outcome of the Elections.
The President promised a massive “across-the-board reduction of taxes for working and middle-income Americans.” The Trump Plan proposes to revamp and simplify the tax code with the expectation to boost the economy, create jobs and reduce the tax burden on taxpayers. We have highlighted some of the most relevant changes that affect the average American family.READ MORE
Tax Guide for Americans & Expats in the Netherlands
This brief tax guide aims to supplement and enhance your understanding of the Dutch tax system by providing current insights and practical information. We have also stressed the importance of on-time tax planning and treaty provisions available solely to Americans expatriates residing in the Netherlands.READ MORE
2017 Federal Tax Update. Part 1 – Individuals
The Internal Revenue Service has recently released Rev. Proc. 2016-55 which is setting forth the cost-of-living adjustments in effect for 2017 tax year. We have compiled the most common individual income tax provisions and contrasted them to the 2016 limits enumerated in Rev. Proc. 2015-53.READ MORE
Foreign Bank Account Reports. Doing them right!
The last several years marked a tremendous increase in the number of Foreign Bank Account Reports filed with the Treasury Department's Financial Crimes Enforcement Network. In fact, the IRS has announced that the number of Forms 114 (Former TD.F. 90.22-1 or FBAR) filed in 2015 topped at over 1.1 million! This record number shows an upsurge in awareness of the foreign financial account reporting requirements and a trend towards voluntary compliance. Still, many taxpayers experience practical difficulties in complying with the FBAR regulations. So, what it takes to do it right?READ MORE
2017 Return Due Dates under the PATH Act
The Protecting Americans from Tax Hikes (PATH) Act of 2015, made major changes to tax and information return filing dates. The rationale behind the accelerated return due dates is streamlining the tax return filing information and strenghtening the IRS identity theft prevention and detection efforts. Most of the changes are effective for tax and information returns due in 2017. How the new return due dates affect you and your business?READ MORE
Tax Guide for American Expats in Germany
This brief tax guide aims to supplement and enhance your understanding of the German income tax system by providing current insights and practical information. We covered the most important rules that expats should consider when it comes to residency, income and tax withholding. In addition, we have also stressed the importance of tax planning and treaty provisions available solely to American citizens and residents living in Germany.READ MORE
Debunking 5 Myths About FATCA
The Foreign Accounts Tax Compliance Act of 2010 (FATCA) requires foreign banks and other financial institutions automatically report the accounts held or controlled by U.S persons to the IRS on an annual basis. The goal of the automatic exchange of financial information in tax matters is increased offshore transparency, reduction of the tax gap and elimination of taxpayer noncompliance. The FATCA provisions are instituted trough:READ MORE
Tax Guide for American Expats in Ireland
This tax guide aims to enhance your understanding of the Irish income tax system by providing current insights and practical information. We covered the most important rules that expats should consider when it comes to residency, income, taxes, and withholding. We have also highlighted some tax planning and treaty provisions available solely to American citizens and residents living in Ireland.READ MORE
Tax Guide for American Expats in the Philippines
This tax guide aims to supplement and enhance your understanding of the Philippine income tax system by providing current insights and practical information. We covered the core rules expats should consider when it comes to residency, income and tax withholding. We have also stressed the importance of on-time tax planning for American expats in the Philippines.READ MORE
Form 5472 Now Required for a Foreign-Owned U.S. LLC
On December 13, 2016, final regulations were issued under Sections 6038A and 7701. The new rules treat a U.S. disregarded entity, wholly owned by a foreign person, as a “U.S. corporation” solely for the report on Form 5472 “Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.”READ MORE