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If you are a U.S. citizen or hold a green card, you are required file a U.S. tax return on an annual basis to report your worldwide income (over certain threshold amounts), whether or not you owe tax to the U.S. government.
For the 2019 tax year, you must file if your income was at least:
Head of Household
Married Filing Jointly
Married Filing Separately (any age)
The requirement to file applies regardless of whether you spent time in the U.S. during the year or had income from U.S. sources. Meaning, even if you spent the entire year abroad and earned all of your income abroad and paid tax on the income to your country of residence, you’re still required to file a U.S. tax return.
This may sound scary and even costly, but keep in mind that although you must report the income you earn, very often your U.S. federal tax liability should be minimal (if not zero) due to various exclusions and credits you can take – and this is where we can help!
The answer depends on your situation. The most typical form required outside the IRS Form 1040 is the FBAR, since most expats hold non-US bank or pension accounts by virtue of living abroad.
In addition to the Form 1040 and FBAR, expat taxpayers may be required to file certain other federal tax forms depending on their activities and income amounts.
We prepare any and all forms that an expat taxpayer may need to file, including the following:
In order to avoid double taxation, U.S. expats are generally entitled to several benefits related to the income they earn while overseas and the taxes they pay to foreign countries:
Foreign Earned Income Exclusion – Each year, U.S. expats are allowed to exclude from their income a fixed amount of their foreign earnings. For 2019, this amount is $105,900. In order to claim this benefit you must meet certain criteria and attach Form 2555 to your return (included in our standard package!). In order to qualify for this exclusion, you must meet the following criteria:
FATCA stands for “Foreign Account Tax Compliance Act.” FATCA was initially enacted in 2010. Its objective is to require U.S. citizens to report their holdings in financial accounts and assets overseas as part of the U.S. government’s focus on combatting offshore tax evasion. As part of enforcing FATCA, the IRS requires certain U.S. citizens to report the total value of their “foreign financial assets.” Generally, FATCA reporting applies to any account in a foreign financial institution and to stock or securities issued by a non-U.S. entity. If you reside outside the U.S. and have a bank account or investment account in a foreign financial institution, you are generally required to include Form 8938 with your U.S. federal income tax return if you meet the following thresholds:
Our state tax return service helps US expats who have a continuing obligation to file.
On Friday, March 27th, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), a massive $2 trillion bill designed to stimulate the United States economy in response to the coronavirus pandemic.
Among other things, the CARES Act provides for stimulus payments to be made directly to U.S. individuals. This means potentially thousands of dollars in your pocket within the next few weeks.
Here are some highlights of the CARES Act stimulus payments:
In late March press briefings, U.S. Treasury Secretary Steven Mnuchin estimated that the stimulus payments would be received within two weeks. Most analysts have predicted that it will take a month or more before taxpayers see the payments. Payments are made automatically, with no action required from taxpayers (not even a phone call to the IRS).
If you’ve authorized the IRS to pay you a tax refund via direct deposit (since at least 2018), the IRS will use your bank account information to direct deposit your stimulus payment. No later than 15 days after making a stimulus payment, the IRS will mail a notice to your last known address indicating how the payment was made, the amount of the payment, and a phone number for reporting any failure to receive the payment to IRS.
In the coming weeks, the U.S. Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail. A check in the mail would presumably arrive at your address that the IRS has on file.
For more information and detailed FAQs, please read our blog on the stimulus payments.
To put it simply - not all expat services are created equal. We offer the most reliable, efficient and rigorous online service for U.S. expats across the globe. Even with the convenience we offer our clients, we stand behind the quality of our work and the level of service we provide.
Here are 6 specific reasons why choosing Expat Tax Professionals is the right decision for you:
Given time zone differences, the best way to reach us is by email. You can either email your tax manager directly or send an email to [email protected]
Otherwise, you can contact us by phone or through our website contact form:
U.S. +1 (718) 887-9933
UK +44 (0) 20-3642-0423
Please note that our office maintains London hours. Our office hours are Mon-Thurs 8am-4pm GMT (London time).