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Showing posts with label expatriate tax planning. Show all posts
Showing posts with label expatriate tax planning. Show all posts

November 1, 2018

SMART TAX MOVES TO MAKE NOW -NEW TAX LAWS CHANGES RULES FOR 2018

The new 2018 tax rules have changed some of the rules for year end tax planning. 

Some of these rules might apply to expatriates and nonresidents.  The foreign earned income exclusion and foreign tax credit rules do remain the same as the past.  However if you own a foreign corporation the new GILTI tax may apply and force you to pay tax on undistributed income from your foreign corporation. 

Read more about some year end tax planning  suggestions from AARP HERE

If you need help or have questions and you are a US expatriate, nonresident  or owner of foreign assets we can help. Email us at ddnelson@gmail.com or visit our website at www.taxmeless.com   We have been assisting expatriates and nonresidents with their taxes for over 25 years.

May 10, 2012

YOUR US INCOME and TAXES MAY GO UP ON 1/1/13


Unless Congress takes action and passes new tax law (and that will not happen until after the Presidential election , a tax Bomb will go off on January 1, 2013 which could cause you adverse consequences.
  • The Lowest income tax rate jumps from 10% to 15%
  • The top tax rate climbs from 35% to 39.6%
  • Long-term capital gains tax rate climbs from 15% to 20%
  • Dividends will be taxed at substantially higher rates
  • The 2% payroll tax credit expires, and much more...
  • The lifetime estate and gift tax exemption will decrease from $5 million to $1 million
Now is the time to do  your  income and estate tax planning in the event Congress does not take any action to stop these increases.  We can help.  www.TaxMeLess.com 

April 17, 2012

Mitt Romney - 10 Ways to Stiff the IRS and Pay Less than the Average US Taxpayer

Here are the ten ways Mitt Romney avoids paying high taxes. Unfortunately these methods are not available to the average taxpayer and most are reserved exclusively for the Upper One Percent of taxpayers. Mother Jones has done an outstanding job of analyzing Mitt's tax return and the loopholes he uses to avoid paying US taxes.

March 19, 2012

Tax Tips for US Expatriates Living Abroad


Seven tax tips for US Expatriates for their 2011 taxes.

1. Filing deadline U.S. citizens and resident aliens residing overseas or those serving in the military outside the U.S. on the regular due date of their tax return have until June 15, 2012 to file their federal income tax return. To use this automatic two-month extension beyond the regular April 17, 2012 deadline, taxpayers must attach a statement to their return explaining which of the two situations above qualifies them for the extension.

2. World-wide income Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts.

3. Tax forms In most cases, affected taxpayers need to fill out and attach Schedule B, Interest and Ordinary Dividends, to their tax return. Certain taxpayers may also have to fill out and attach to their tax return the new Form 8938, Statement of Foreign Financial Assets. Some taxpayers may also have to file Form TD F 90-22.1 with the Treasury Department by June 30, 2012.

4. Foreign earned income exclusion Many Americans who live and work abroad qualify for the foreign earned income exclusion. If you qualify for tax year 2011, this exclusion enables you to exempt up to $92,900 of wages and other foreign earned income from U.S. tax.  This exclusion does not apply to interest, dividends, social security, capital gains, etc.

5. Credits and deductions You may be able to take either a credit or a deduction for income taxes paid to a foreign country or a U.S. possession. This benefit is designed to lessen the tax burden that results when both the U.S. and another country tax income from that country.

6. Other Forms Required  If you own a foreign corporation, a foreign trust, a foreign LLC, or are a member of a foreign partnership you have to file special forms or you may incur huge penalties for failing to file those forms. If you own a foreign mutual fund, you must file as an owner of a Passive Foreign Investment Company or suffer adverse tax consequences on your US taxes.

7. Failure to File Returns  Many expatriates file returns in their resident country,and then believe they do not have to file in the US. This IS NOTcorrect.  If you are a green card holder or US Citizen you must always file a US tax return each year if you earn above a minimum amount (which varies per year).  Until you file a return the statute of limitations for failing to file (and assessments by the IRS) never runs out.

Read more of the rules and filing requirements at www.TaxMeLess.com. 



February 20, 2012

QUICK U.S. TAX FACTS FOR EXPATRIATES AND AMERICANS LIVING ABROAD



· If you are a US Citizen you must file a US tax return every year unless your income is less than
$ 9,500 (for 2011 and lower for earlier years) or have self employment-independent contractor  net income of more than $  400 US per year.  You are taxable on your world wide income and required to report it regardless of whether you filed a tax return in your country of residence.
· As an US expatriate living abroad on 4/15, your 2011 tax  return is automatically extended until 6/15 but any taxes due must be paid by 4/15 to avoid penalties.  The return can be further extended until 10/15/12 if the proper extension is filed. You may even be able to get a further extension until 12/15if you send the IRS the proper letter.
· For 2011 if you are a qualified expatriate you get a foreign earned income exclusion (earnings from wages or self employment) of $92,900, but this exclusion is only available if you file a tax return.
· If your spouse works and lives abroad, and is qualified, she can also get at $92,900 foreign earned income exclusion. A foreign housing deduction or exclusion is also available if you earn in excess of the foreign earned income exclusion. This amount varies by country.
· You get credits against your US income tax obligation for the taxes paid to a foreign country on that same income but you must file a return to claim those credits.
· If you own 10% or more of a  foreign  corporation, LLC or partnership or are a beneficiary of a Foreign Trust such as a  Fideicomiso in Mexico, you must file special IRS forms each year or incur substantial penalties which can be greater including criminal prosecution if the IRS discovers you have failed to file these forms.
· Your net self employment income or independent contractor income  is subject to US self employment tax of 15.3% (social security) which cannot be reduced or eliminated by the foreign earned income exclusion unless you work in one of the few countries the US Social Security Administration has a social security agreement with and pay social security to those countries. If you live in one of those countries you must secure a required certificate to prove your exemption from US self employment tax.
· If at any time during the tax year your combined highest balances in your  foreign bank and financial accounts such as brokerage accounts, cash surrender value of foreign life insurance policies, foreign pensions, etc. (when added together) ever equal or exceed $10,0US you must file a FBAR form with the IRS by June 30th for the prior calendar year or incur a penalty of $10,000 or more including criminal prosecution. This form does not go in with your personal income tax return and is filed separately to a different address.
· In the several past year the IRS has hired more than 2,000 new employees to audit, investigate and discover Americans living abroad who have failed to file all necessary tax forms.
· Often due to foreign tax credits and the the foreign earned income exclusion expats living abroad  when filing  all past year unfiled tax returns and end up owing no or very little US taxes.
· Beginning in 2011a new law is in effect which requires all US Citizens report all of their world wide financial assets if in total the value of those assets are $50,000 or more on form 8938. 
· Income from certain types of foreign corporations are immediately taxable on the US shareholder's personal income tax return.  If your corporation only provides your personal services to customers you may have a Foreign Personal Holding Company which would cause all income to be immediately taxable to you. Income may also be immediately taxable when the income is from investments, rents, etc. This is call “Subpart F” income.
· If you own investments in a foreign corporation or own a foreign mutual fund shares you may be required to file the IRS forms for owning part of a Passive Foreign Investment Company (PFIC) or incur additional, taxes and penalties for your failure to do so. A PFIC is any foreign corporation that has more than 75% of its gross income from passive income or 50 percent or more of its assets produce or will produce passive income.
· The IRS is now matching up your US passport with your US tax records and knows if  you  have not been filing all required US tax returns while you are living  Abroad.  The IRS will shortly start matching up information received from Foreign Banks with US tax returns and required FBAR forms. If you have not been reporting, now is the time to start.

· Download your 2011 US tax return questionnaire prepared expressly for Americans living in Abroad   HERE.
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 Don  D. Nelson, CPA, Attorney (Kauffman Nelson LLP) has been assisting US Citizens , Permanent Residents and nonresidents in over 40 countries around the world with their US tax planning, tax return preparation, and other tax / legal matters for 20 plus years. He offers his clients attorney-client privilege which is not available from other tax accountants. He has helped hundreds of US expatriates around the world “catch up” filing their past late returns most often with little or no tax cost to you the delinquent taxpayer. His main office is at 34145 Pacific Coast Highway #401, Dana Point, California 92629 USA.


Our Tax Services Include

  • US Expatriate and International Tax Return Preparation.
  • US Nonresident return preparation.
  • Review of IRS International Tax Forms Prepared by you or your tax preparer.
  • Preparing and filing tax returns for past years – Our “Catch Up” tax service.
  • Surrender of US Citizenship or Green Card Tax Planning and Assistance.
  • International Business Tax Planning and compliance.
  • IRS Offshore Voluntary Disclosure Reprsentation and filing.
  • IRS Audit Representation with respect to Expatriate and International Tax Issues

Mini Tax Consultations are available for you to discuss your situation with Don your personally and secure his counsel resolving your tax problems and future tax planning by phone or email. No personal visit is required. All consultations are subject to the absolut privacy and confidentiality of Attorney-client privilege. LEARN MORE HERE.



January 17, 2012

2011 Chinese Taxes for Expatriates Living in China

China Briefing has an excellent article stating the rules for US expatriates living in China with respect to their Chinese Income Tax Filing Requirements. The rates run for 3% to 45%.  READ MORE HERE

Of course the income taxes you pay in China can be credited against our US income tax rate, and any  excess (above the US tax amount on the same income) can be carried back 2 years and then carried over. To download our US expat tax questionnaire CLICK HERE