US Citizens & Expats

Taxation of Expats & Americans with Foreign Income

The United States is the only country in the World that imposes severe tax return filing and reporting requirements to citizens, permanent residents, and expats who are continuously living abroad. As a consequence, the compliance with the federal income tax provisions could be a time-assuming and burdensome process.

Furthermore, many States follow a "domicile" doctrine or do not conform to federal law concerning the Foreign Tax Credit, Foreign Earned Income Exclusion, and Foreign Housing Exclusion, a situation that requires on-time decision-making and residency related tax planning. Our Certified Public Accountants and IRS Enrolled Agents, seek to relieve your income tax obligations through a combination of made to order tax return preparation services and more than ten years of experience in US cross-border taxation.

Our income tax services are designed to meet the unique tax filing and reporting requirements of fellow American taxpayers with foreign income and transactions. We offer a broad range of tax return preparation services, with a strategic focus on

US Citizens, Residents and Expats Living Overseas

US Citizens and Residents with International Income or Investments

Permanent Expatriation and Mark-to-Market Regulations

Income Tax Returns for Expats & Americans Abroad

A decision to relocate abroad is significant enough even without regard to the income tax implications that follow. For many the chance to live abroad is a tremendous opportunity, a step forward to career growth, or once in life cultural experience.

Still, the US income tax exposure is another issue that deserves consideration. US citizens and expats residing outside the USA are subject to tax on worldwide income and the annual tax return filing requirements still stand. Simultaneously, many aspects of the income tax provisions become more complex and obscure.

The internal revenue laws provide for deferral or even exemption from taxation of income earned abroad. Some of the most common options include the Foreign Earned Income Exclusion, Foreign Housing Exclusion, and Foreign Tax Credit. Because of the differences among the international tax systems, income tax returns often require alignment of foreign tax regimes to the internal revenue laws, interpretation of narrow international tax frameworks, various disclosures, and selection of tax treaty-based positions.

We aim to assist fellow Americans abroad focus on what is most important in their life. Your income tax compliance is our concern and our experts in international taxation decode

  • All 1040 federal income tax returns
  • All applicable schedules, including Schedule A, B, C, D, and E
  • State income tax returns for all 50 States and the D.C.
  • Form 2555 and 1116 availing of the Foreign Earned Income Exclusion, the Foreign Housing Exclusion, Foreign Tax Credit or Deduction
  • Interpretations of Double Taxation Avoidance Agreements, including the US, the UN, and the OECD Model Tax Treaties
  • Tax compliance, disclosures, and treaty-based return positions
  • Alignment and reporting of foreign income in line with the specifics of federal and state tax law
  • Assistance with the Foreign Bank Account Reporting (FBAR) and FATCA regulations
  • Accounting and Bookkeeping services for individual owners of foreign sole-proprietorships, partnerships and LLCs under both the IFRS and the GAAP
  • Tax advisory, reconsiderations, amendments, back tax returns, and assistance during audits and appeals
  • Representation before the IRS and the relevant State Departments of Taxation
  • Assistance with Installment Agreements and Offers in Compromise
  • ITIN Applications for non-resident alien spouses and qualifying dependents
  • Tax audit protection and insurance
  • Tax planning and consultancy services

Taxation of US Persons with Foreign Income or Investments

For many Americans ownership of a vacation home abroad or investment in a foreign company is a successful business endeavor. However, the return on the investment is not the only area that deserves attention. The risk of double taxation under home and host country laws is a factor that could overthrow any profit potential.

The availability of a tax treaty may shift taxation rights to add a layer of relief and limited scope of taxation. Moreover, the internal revenue laws provide for a foreign tax credit and certain exemptions to reduce the risk of double tax exposure. However, compliance with the international tax provisions of the Tax Code proved to be particularly troublesome.

We assist our clients with international income and investments to comply with the host and home country tax laws and simultaneously minimize income tax exposure and maximize tax credits. Our US tax services cover all aspects of foreign income and investments, from rental and leases of real property to shareholders in foreign companies, partnerships, and corporations. Some of our services include

  • Preparation of all required federal income tax returns
  • Preparation of all State income tax returns
  • Compliance with foreign financial asset disclosures including FBAR and FATCA regulations
  • Rental, royalty or lease tax returns for US citizens and residents with foreign real property investments
  • Application of tax treaty requirements to the US and treaty-partner tax law
  • Foreign trust and gift disclosures including Form 3520 and 3520-A
  • Information returns for investors in foreign companies, all required reports including Form 5471, 8865, 8858 and 8621
  • Strategies for avoidance of the Net Investment Income Tax and Additional Medicare Tax
  • Tax consultancy, representation, and advisory services

Tax Consequences of Permanent Expatriation

The Senate introduced the expatriation tax provisions in an attempt to block tax-motivated relinquishment of US citizenship and abandonment of permanent residency. The expatriation tax provisions under Sections 877 and 877A of the Internal Revenue Code apply to both US citizens and long-term permanent residents with a net worth over 2 million or an average tax liability of more than $160,000.00 for the preceding five tax years.

Permanent expatriation after June 17, 2008, triggers a mark-to-market regime that enforces a deemed sale for fair market value and concurrent taxation of all assets held by covered expatriates. Despite the availability of a statutory exclusion amount, the tax liability under the mark-to-market regime is substantial. To mitigate your income tax exposure, we provide various advisory, consultancy, and tax return preparation services to covered expatriates including

  • Determination of covered expatriate status
  • Preparation of all required returns, including Forms 8833 and 8854
  • Application of tax treaty provisions to your particular situation
  • Expatriation date determination under Sections 877 and 877A
  • Assistance with deferral of income tax liability
  • Various consultancy and tax advisory services

Should you wish to register for our expat tax services, you may do so at any time. Did not find what you were looking for? Ask your questions and get a free quote with more information about how we can assist you further. You may also contact us directly.