A Sponsored Article from USTax4Expats on Expatriate Tax Issues
Did you know?
- It’s estimated there are about 7 million Americans abroad; however, only 10% of them are up to date with compliance reporting and filing of correct tax forms and tax returns. The IRS is actively looking for non-compliant persons by contacting overseas banks to provide details of US Citizen customers and request them to complete the W-9 form with SSN details.
- American Citizens must file US 1040 tax returns reporting their worldwide income and claim appropriate exclusions and foreign tax credit if the income source is outside of the USA irrespective of the locations. Many Americans living abroad are misunderstanding that because they do not receive any US-based income, such as W2, etc., no US tax filing is required, which is not true. If your income is above a certain threshold based on your filing status [Single, Married filing joint, Head of Household], you have a US tax filing requirement. Please check the IRS website for the income threshold. https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return.
- FATCA requires that both Americans report foreign bank details to be disclosed with the U.S. Treasury department every year. The penalties are high for non-compliance.
- An American citizen who holds more than 10% shareholding/Director position in a foreign-based corporation needs to have complex reporting on Form 5471.
- US Citizens investing with foreign country personal pension plan(UK SIPP)/Foreign mutual funds (UK ISA stocks and share) can be caught up by passive foreign investment company [PFIC] reporting rules. US taxation of Foreign mutual funds is punitive and complex.
- US Citizens married to a foreign spouse can file a joint tax return by applying for valid ITIN and claim the benefits of higher standard deductions and save US tax.
Did you know FACTA/FBAR Non-compliance can be a big worry?
- It’s a worry because the annual penalties for failing to disclose foreign bank accounts at a minimum of $10,000 could increase up to 50% of foreign bank account maximum balance/international asset values
- Owners of undeclared foreign corporations/PFIC and business entities face similar penalties.
- If the IRS believes you owe more than $51,000 in unpaid tax, your passport might get revoked/denied renewal.
- Possibly you also stand a high risk of being detained at customs on re-entry to the USA.
- FACTA requires foreign banks to disclose their American customer account holder’s details to the IRS or local tax authority. You would be asked to complete Form W9, and if U.S. Citizens/Green Card holders do not cooperate with banks, their bank accounts could be frozen.
WE ALL KNOW THE SAYING
” Better Late than Never – Does this apply to Tax filing?”
USTax4Expats is a specialist boutique firm providing American Expatriate Personal Tax Compliance Service. Our firm aims to assist American Citizens living in the UK and overseas looking for local qualified professionals with Big 4 accounting firm experience in US/UK personal tax expertise.
We are IRS approved Enrolled Agents (EA), our service areas of expertise covers (1040/1040NR tax return preparation, Dual-Status US tax return, IRS Representation, IRS Notice reply, Delinquent/Streamlined US tax return filing for accidental American who were not aware of their US tax filing obligations living abroad, FATCA Compliance, Form 5471 Reporting, US/UK Tax Treaty position claims and avoiding the double taxation issues normally faced by expatriates living abroad, Foreign Bank Account Declaration FBAR FINCEN 114 Reporting, PFIC Reporting, UK Nom Domiciled Self-Assessment Personal tax return service, Specialist payroll service only for Foreign persons/British Citizen working for UK based Embassy/Consulate/Diplomat offices who require niche payroll run via Direct payment of National Insurance [DCNI] Scheme and Direct Payment of National Insurance [DPNI] Scheme service).
We are also one of IRS approved Certified Acceptance Agents (CAA) who can assist with passport certification and also assist ITIN application for spouse/dependents of US citizens/ ITIN Renewal/EIN application; ITIN service is provided for our overseas clients by our experienced team in 4 locations, the U.K, Most of Europe, Belgium, Singapore, UAE, Qatar, Saudi Arabia, and India. For ITIN/Certified Acceptance Agents (CAA) Service related FAQ, Please visit our website FAQ’s section www.ITINCAA.com.
Additional Information About USTax4Expats
In addition to assisting US Citizens, Green cardholders in US personal tax compliance. We have also helped many British/Foreign Nationals with US-based property income or Investments income filing, FIRPTA Compliance, 1040NR Non-residents Alien tax return, and tax refund claims using appropriate US/UK tax treaty positions. We specialize in obtaining ITIN (US Tax ID)/W8BEN for Americans married to British Nationals, FIRPTA Tax refund, and 1042S tax withholding reclaim.
We help companies looking for US tax and ITIN service for employees/celebrities/Royalty income recipients (authors/filmmakers), EIN for US/UK registered companies, Law firms requiring US tax ID/ITIN for their foreign partners, UK accountants looking for US tax advice.
If you individual, business owner, or a professional advisor looking for US tax or ITIN applications or EIN application assistance, please get in touch.
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