Tax Services for U.S. Expats
As a U.S. expat, filing federal and state taxes can be a challenge. The tax regulations are constantly changing. If you are not compliant with the current law, you risk incurring penalties. The IRS is increasingly enforcing expat-related regulations. We work with our expat clients, to make sure they are compliant with current tax rules.
Qualifying for Exclusions
If you are a U.S. expat, you may qualify for a number of exclusions, including the Foreign Earned Income Credit and the Foreign Housing Exclusion (or Foreign Housing Deduction). To qualify for these exclusions, U.S. citizens and green card holders must meet one of two tests:
Test One: Physical presence, which means you must:
1. Be physically present in a foreign country (or countries) for at least 330 full calendar days during 12 consecutive months.
2. Be a U.S. citizen or resident alien
Test Two: Bona Fide Resident, which means you must:
1. Live in a foreign country for an uninterrupted period of time, which includes an entire tax year (Jan 1 to Dec 31). You can travel back to the U.S. for brief periods and still meet this test.
2. Be a U.S. citizen or resident alien
Each of these tests has additional provisions. To discuss your specific situation, please contact us.
Expat U.S. Tax Filing Requirements
You must file taxes on the standard 1040 and may need to file state taxes as well. In addition to filing a U.S federal tax return, you must also disclose all foreign financial assets on form Foreign Bank and Financial Accounts (FBAR). Expats not filing a required FBAR can face penalties and potentially criminal prosecution.
If you meet minimum reporting requirements, you may also need to submit a form 8938 along with your 1040. This reporting requirement is part of The Foreign Account Tax Compliance Act (FATCA), requiring foreign financial institutions to report on accounts held by U.S. taxpayers
Our team has many years of experience in helping expats comply with U.S. tax regulations.
We tailor our services to the unique needs of each client. For example, we can help you if you are on a temporary posting in Asia or have bank accounts in Europe.
We will help you complete and file your U.S tax return, FBARS and related forms correctly and on time. We can make sure you are FATCA compliant. We also provide tax services to non-U.S. residents with income from sources within the United States.
We provide the following tax services for Expats.
1. U.S. Federal income tax return preparation – If you are a U.S. citizen or green card holder, you must file a 1040 with the United States IRS. You must file regardless of your source of income or country of residence. Our tax expert will complete your return and make sure you take all available credits such as foreign tax credits.
2. State income tax return preparation – As a resident of a state in the U.S., you typically must also file a return with your home state. Residency rules do vary from state-to-state. Our team will help you identify the residency requirements of your state and file any required state tax forms.
3. Foreign Bank and Financial Accounts (FBAR) Form 114 (formerly Form TDF 90-22.1) reporting – If you are a U.S. citizen and hold financial assets in a foreign country, you must file a report with the IRS. If you do not report foreign assets meeting the reporting criteria, you are subject to significant penalties. The U.S. Federal Crimes Enforcement Network (FinCEN) requires FBAR reporting. There is no extension available for filing after the June 30 deadline.
4. Foreign Account Tax Compliance Act (FATCA) Form 8938 reporting – If you are a U.S. citizen and your foreign assets meet a certain threshold, you are also required to file a Form 8938. Our team can help you determine if your foreign assets meet the requirements of this act.
5. Foreign Currency Exchange Form 2555 completion – If you live abroad you must convert your foreign income to U.S. dollars using an annual currency calculation. There is one specific rate used for asset reporting schedules. For asset reporting, we use the US Department of Treasury schedule. If your tax return has income and expense items we use OANDA, which is a daily average for currency conversion.
6. Abandonment of Lawful Resident Status Form I-407 preparation – If you have decided to relinquish your U.S. Green card and live in another country, you must complete a form I-407. We can help you complete and properly file this form. Once you relinquish your green card, you can visit the U.S. in the future as a tourist. Make sure you retain your approved I-407 and keep it with you whenever you enter the U.S.
Contact us to discuss your Expat Tax Requirements
We can prepare all of the required IRS Expat forms. We can also work with you if you have failed to file the required forms. You must not ignore the U.S Tax filing requirements when you live abroad. If you fail to file your U.S. tax returns, you can incur financial penalties or in extreme circumstances jail time. If you are late and come forward on a voluntary basis, that can help your situation; but do not delay.
