On Friday, December 4, 2015, President Obama signed the “Fixing America’s Surface Transportation Act” (FAST Act) into law. Although the FAST Act is primarily a transportation infrastructure bill, it contains tax provisions that could significantly impact US taxpayers living abroad. Section 32101 authorizes the Department of Treasury to advise the Secretary of State of the…
DetailsThe article was first published in Global Tax Weekly, issue 156. Below is the full text of the second article in the series on US taxes for US persons living outside the US. US Tax Compliance And Planning For US Executives, Entrepreneurs And Investors Living Outside The US – The Foreign Earned Income Exclusion by…
DetailsFurther to our June 8th, 2014 email regarding the June 3rd, 2014 announcement by the Commissioner of the Internal Revenue Service that changes to the Offshore Voluntary Disclosure Program (OVDP) and Streamlined Compliance Procedure (SCP) were under development, we are pleased to report that yesterday, the Service published changes to the SCP that substantially improve…
DetailsGenerally, receiving a tax credit is more beneficial to a taxpayer than a deduction from income taxes. A tax credit provides a dollar for dollar reduction in current income tax liability. If a taxpayer excludes amounts from his or her earned income under the foreign earned income exclusion, then the taxpayer cannot receive a foreign tax credit or deduction for taxes on the income that were excluded under the foreign earned income exclusion. It will be important for the taxpayer to determine whether he or she is in a better position receiving the foreign earned income exclusion or receiving the foreign tax credit applicable to the foreign earned income.
DetailsThe US taxes its citizens and residents based on their worldwide income. A US citizen living abroad can elect to exclude a certain amount of foreign earned income on his or her US income tax return, if certain requirements are met. For 2013, the maximum foreign earned income exclusion (“FEIE”) amount is $97,600 per taxpayer (amount indexed for inflation each year). The FEIE is available only to exclude income from wages or self-employment income earned for services performed outside the US. The FEIE is claimed on IRS Form 2555.
DetailsOn November, 14 2013, the US and France signed a bilateral agreement to implement the Foreign Account Tax Compliance Act (FATCA). The agreement is based on the Model 1A treaty and requires French financial institutions to report US account holders to the French government, which will then report those accounts to the US. Similarly, US financial institutions are required…
Detailshttp://www.flottco.com/doingbusinessacrossborders//wp-content/uploads/2014/06/IRS-LBI-Horton-re-New-Tax-Compliance-Proposal.pdf
This discussion of US citizenship is intended to cover persons who reside outside the United States and are uncertain about their US citizenship status.[1] Essentially, those who were born in the United States are citizens. Those who were born outside the United States to one or two US citizen parents are certainly entitled to US…
DetailsThe IRS applies different methodologies for calculating the gambling winnings of US taxpayers and Nonresident Aliens (NRAs). For US taxpayers, the IRS calculates earnings based on winnings over the course of a gambling session, while for NRAs the IRS has taken the position that gambling winnings should be calculated based on each bet. So, for…
DetailsDuring 2012, the tax consequences of U.S. citizenship became a major source of worry for U.S. citizens living in Canada. Widespread reports in the media of increased U.S. enforcement of the tax and financial account reporting obligations of U.S. citizens living outside the United States created considerable anxiety. They also spurred questions about the particulars…
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