As a US citizen living and working outside of the US, it is often possible to exclude part- or even all of your foreign income and self-employment income from federal tax through the Foreign Earned Income Exclusion (FEIE).Read More
As an American living abroad, US taxes can be complex. We have had a brief look at some of our US expatriate tax cases to identify common US tax mistakes and make recommendation on how to avoid them.
A deduction/exclusion that is massively under claimed amongst US expatriates is the Foreign Housing Exclusion/deduction. The exclusion/deduction works in conjunction with the Foreign Earned Income Exclusion (FEIE) and is an allowance that includes some of your housing expenses from your gross income on your US tax return.
The allowance is deductible at different thresholds depending on where you live and how many days you have lived outside of the US.
The Foreign Earned Income Exclusion (FEIE) is a deduction that the IRS allows to certain US citizens and resident aliens living and earning income abroad on a consistent basis.
What is foreign earned income?
Foreign earned income is classed as income from either employed or self-employed work. It does not include passive income from investments such as interest, dividends, IRA distributions or rental income.
A few examples that the IRS (taxpayers) have given includes on what doesn’t qualify as foreign income includes:Read More
As an expert in tax for US expats we are expert in identifying US expats tax filing obligations, reliefs, deductions and exclusions. This article is aimed at helping US expats identify whether their income is taxable in a foreign country.Read More
Over the years, we have come across thousands of US expat who are behind on their taxes. This article focuses on US expats who have either missed the June 15th tax deadline over a month ago or perhaps are years behind.Read More
As a US tax accountant based in Covent Garden and New York we make it our business to keep all of our clients informed and up to date on how the latest US tax changes will affect them.
The U.S. has entered into a number of agreements with countries worldwide named ‘Totalization Agreements’. The agreements aim to serve the purpose of avoiding double taxation on income in respects to social security taxes.
As an accountant for US expats, we have come across many self-employed expats that don’t know where their US tax obligations start and finish.
If you are a US Expat entrepreneur thinking of starting a business or going self-employed your expat taxes will be more complex than the average expat. Below is our guide on the tax implications of going self-employed or starting up a business as a US expat.
Adjusted Gross Income. Companies such as Efile operate tax software - an online automatic system allowing easy preparation and filing of your California state tax return. Basic state tax return forms are automatically calculated with the relevant data you provide, and any additional state forms are also listed if completion is necessary. Filing state tax returns in California can be done singularly or alongside federal tax returns.Read More
As an accountant with over 10 years experiences accounting for US Expats and non-resident aliens based in the UK, we are expert in advising about all matters surrounding US tax.
This article is aimed to break down the US tax rates, penalties and interest US Expats and non-resident aliens should be aware of.
Succeeding President Donald Trump’s signing of the Tax Cuts and Jobs Act (TCJA) in 2017, the US transfer tax system has seen its most significant reform in over 30 years. Transfer tax comprises gift tax; on property transferred during lifetime, and estate tax; imposed on property transferred at death, and under the TCJA, the exclusion rates of these taxes have doubled from $5.49 million to $11.18 million for individual US citizens. These increased tax inclusions are very generous to US citizens, protecting the majority of them from transfer tax, but these new laws do not apply to non-US citizens or those non-domiciled (non-US persons for ease of reference) meaning they remain subject to estate and gift tax.Read More
Following on from yesterdays article ‘Do you need to file a US Tax Return? (For those living outside of the U.S.’, we progress to break down the filing and paying aspects of US tax as a US expat or resident Alien.Read More
U.S. Tax can be a daunting subject for Americans within the U.S.A, let alone for those living outside of America with U.S. tax obligations. This article aims to help you establish whether you are required to file a tax return.Read More
With the passing of the recent US Expat tax deadline in mind, we have put together an article summarising some of the main penalties that Americans living in the UK may be subject to if they are not compliant. We also offer advice on how to avoid these penalties.Read More
The Tariffs introduced on imported goods, by President Trump back in March, have shaken the fashion world.Read More
US expats are required to file a US federal tax return in order to disclose their worldwide income. If you’re a US expat who lives in a low-tax country and earns above the Foreign Earned Income Exclusion threshold, you are likely to owe US tax.Read More
The “Tax Cuts and Jobs Act” of 2017 introduced several major federal tax reforms affecting offshore income. One of the most noted tax reforms enacted was the incorporation of Reparation Tax. The provision was introduced with the intention to force large U.S. companies, like Apple and Google, to pay a sizeable tax on profits held in foreign subsidiaries (controlled foreign corporations). Under the reform, all profits of CFC’s that were accumulated post-1986 will be treated as income of their U.S. parent company and taxed a 15.5% for profits held in cash form, and 8% for profit held in non-cash form.
As a result many U.S. expatriates have fallen further into the IRS’s long arm. U.S. citizens living outside of the U.S. who own or have interest in companies incorporated outside of the USA will also be subject to paying the Reparation Tax. This is because the U.S. tax reform regards such individuals in the same light as the large U.S. corporations. Therefore, American expatriates owning more than 10% of a Controlled Foreign Corporation (CFC) will have to pay repatriation tax within eight years.
Contact us for expert tax advice for U.S. expatriates
Donald Trump's 2017 tax reform has had and will continue to have huge implications for US expats who have an investment in non-US businesses. The two main new laws in place relating to Controlled Foreign Corporations (CFCs): any non-US business that is at least half owned by US shareholders, each of whom owns at least 10%.
Many actors are considered self-employed when it comes to filing their taxes. When filing your regular year-end 1040 income tax file, you will also be required to file a 'Schedule C' and state all the 1099s you received throughout the year. There are many unique deductions actors are allowed to take advantage of - these should be reported on the 8829 form for home office deduction. Further to this, you will liable to self-employment tax in addition to federal income tax. Paying estimated quarterly taxes may be necessary on Form 1040-ES for some, but even if this isn't mandatory (your tax liability does not exceed $1,000), it can be a great way to budget throughout the year.Read More
As said by the late, great Benjamin Franklin "In this world nothing can be said to be certain, except death and taxes." The tax system is a long-standing, ever-changing obligation for the majority of people. Understanding why you're being taxed and what you're being taxed on will help you see the bigger picture when it comes to your finances. Think of it like going to a football match and not understanding why everyone boos a red card. Better to be in the know so you can make well-informed decisions.Read More