Expat Tax Preparation - Troublesome Tax Traps For US Expatriates
Join 1000's of Authors at StreetArticles Today!

Expat Tax Preparation   -   Troublesome Tax Traps for US Expatriates

US Expats living and working in a foreign country tend to open bank accounts to effectively manage their finances. If they are living there for a longer time period, they mayalso decide to invest in a foreign pension plan or insurance policy. However, there’s a catch to that, as US Expats must dedicate considerable time to find out the tax ramifications of such actions. This is because such programs may lead the Expats to pay more taxes to the US government, than expected.

Mundane actions, such as being a participant of a foreign funded pension plan, can indeed create greater confusions for US alien residents residing abroad. Indeed, dealing with US tax complications is dreadful and tedious. Thus, it is important for US expats to be really well informed about the tax filing process, its requirements, and due dates. At the same time, it is equally important for them to beware of the tax traps due to which they can lose huge sums of money in the form of penalties, interest, etc.

US Expats must definitely look at the various considerations well in advance of the due date. This helps in making sure they can file their tax returns without facing any complications.

Host Country

Not all US Expats abroad have to file tax the same way. There are different requirements laid down for Expats in difference countries. Thus, resident aliens must try to find out if their host country essentially has a tax treaty or a convention with the US. Such treaties usually have a huge hand in dictating the terms of tax filing, and in some cases, may also help in saving tax.

Foreign Income Earned

A substantial amount of income you earn in a foreign country can actually be exempted, or deducted from US taxes. Hence, it would be wise to check up on the exclusions you can benefit from for your foreign earned income.

Foreign Bank Account Holdings

Foreign Bank Account holdings, whether in the form of a bank account, brokerage account, mutual fund trust, pension plan, or insurance plan, all have to be reported to the FBAR if their combined value exceeds $10,000 at any point in time during the year. It doesn’t matter if these accounts don’t produce any taxable income, if they exceed the threshold, they have to be reported to the US Treasury Department.

Rental earnings and dividends/interest from US assets

US Expats may additionally be earning money from various sources in the US, such as rental income, dividends, and interest returns on investments. These will be taxed the same way they would have been taxed if the US Expat had been in the US.

The state you belong to

Your taxes will be filed according to the laws of the state that you lived in. You are obliged to pay a state tax return to your state. However, different states have different rules regarding tax filings. Not all the states allow exclusion on foreign earned income on your taxable income.

It is a good idea to have a proactive approach regarding tax filing, as it will help root out complications promptly. Feel free to contact us at Expatriate Tax Services in case you need any guidance regarding tax filing.


Street Talk

No comments present
You May Also Like
Taxing Business Differently
Choice of Entity Every year many new businesses commence operations and their new owners invariably must ask hopefully sooner rather than later, what type of entity should I choose? And in particular, which one provides the most benefit in terms of positioning my company as it relates to my personal…
By: Patrick18 in  Finance  >  Taxes   Jun 06, 2016  
0
  Likes: 0

Importance Of Professional Tax Preparer
The tax preparer is important to get flexibility in the tax calculation, take advice about the tax amount, changing governmental policies and can focus on the other business activities necessary for business expansion. The tax preparer will definitely get the most accurate number of the amount you are liable to…
By: Edward Smith4 in  Finance  >  Taxes   Jun 06, 2016  
0
  Likes: 0

Hosted ERP Solution on Cloud And Desktop Server
ERP is a suite of application software functionalities for managing accounts and finances of an enterprise. ERP is enterprise resource planning software for managing the everyday functionalities of trades. The process of accounting was complex but now it is simpler and easier which is eventually due to ERP solutions in…
By: Jaishking in  Finance  >  Taxes   May 28, 2016  
0
  Likes: 0

Access Drake Software Cloud Hosting on Smartphone
Tax filing was complicated when managed by the accountants and bookkeepers on papers. Since software solutions came into being, the paper based method of tax filing has eliminated and swapped by the automated tax software application. Today the industry has many products for tax filing and hence businesses can choose…
By: Jaishking in  Finance  >  Taxes   May 28, 2016  
0
  Likes: 0

How A Tax Preparer Can Help You Out?
Tax liability is the amount of money a person, organization, entity or company owes to the government. For the government, taxes are an important source of revenue. The government uses the taxes to fund its operations like building the schools, hospitals, road, highways and defending the country. The tax liability…
By: Edward Smith4 in  Finance  >  Taxes   May 28, 2016  
0
  Likes: 0

With Cloud ERP Software Business Management
First we must know about an ERP solution and the purpose of this product. ERP in simple terms is called enterprise resource planning software applications. This software simplifies accounting and commerce for an organization. When a company has ERP solutions, the process of trading and company management is proficiently managed…
By: Jaishking in  Finance  >  Taxes   May 24, 2016  
0
  Likes: 0

Online Customer Data Protected With ACT Cloud Pricing Services
Business organizations can get customer management software ACT to manage their firm. ACT is robust customer management software which brings all client data at one place. The software secures existing prospect client information at one place. ACT is one of the best accounting software for managing client data. Customers are…
By: Jaishking in  Finance  >  Taxes   May 23, 2016  
0
  Likes: 0

How Accountants In Middlesbrough Can Help You?
Different harsh economic conditions can destroy the small businesses completely. People may think that getting the help of accounting services can be expensive in such situations. Well, there is nothing needed more than the accountants Middlesbrough at those times. That’s why, you need to understand the value of accounting Middlesbrough.…
By: aby in  Finance  >  Taxes   May 01, 2016  
0
  Likes: 0

Factors to Consider Before Hiring Professional Accountants In Middlesbrough
The rules related to business change every year and thus the average business entities become irritated and confused. In such a situation, all you need is the help of professional accountants Middlesbrough. The professional accountants are aware of the problems that are the result of the complicated accounting Middlesbrough system.…
By: aby in  Finance  >  Taxes   May 01, 2016  
0
  Likes: 0

Your Identity With the IRS
Most people have heard that you can protect your identity with the IRS. After hearing so many stories recently in the news even as of February 9, 2016 regarding a malware program trying to get E filing numbers, how many people don’t want IRS identity protection? The answer of course…
By: Patrick18 in  Finance  >  Taxes   Apr 28, 2016  
0
  Likes: 0

Organized Records Make Tax Preparation Easier
Tax preparation deals in filing income tax returns by individuals and businesses to pay taxes as early as possible. Income taxes are based on a person's gross income or salary. The calculation of tax preparations deals with how much of the expenditures will be deducted from your gross salary or…
By: Edward Smith4 in  Finance  >  Taxes   Apr 13, 2016  
0
  Likes: 0

Be Wary Of Income Tax Preparation Services
The IRS might want to welcome you to the income tax preparation season of the New Year! That is the way the taxes work. While on one hand you are still relishing the arrival of a brand new year and on the other side, you are glancing back at the…
By: Andy Dean in  Finance  >  Taxes   Mar 26, 2016  
0
  Likes: 0

Personal Income Tax Return Help for Everyone
Quit putting off paying your taxes till the latest possible time. In the event that you need the best tax return you should begin right on time to ensure that you get every one of the deductions that you merit. Your own personal income tax return Montreal should not be…
By: Andy Dean in  Finance  >  Taxes   Mar 25, 2016  
0
  Likes: 0

How to Find A Good Tax Accountant for Your Tax Return:
Whether you know so much about accounting and taxation laws or you don’t, it is likely that your organization accounts are prepared by either a consulting accounting firm or your internal accounts department. For little and medium endeavors, the last alternative can be additionally engaging on the grounds that utilizing…
By: Andy Dean in  Finance  >  Taxes   Mar 23, 2016  
0
  Likes: 0

How to Go About Business Tax Preparation
No one likes to do taxes, and it can be a specially entangled undertaking for the individuals who possess their own businesses. Although, the majority of your imminent customers will keep up their own regular bookkeeping on a weekly basis, you can offer this extra support for the individuals who…
By: Andy Dean in  Finance  >  Taxes   Mar 18, 2016  
0
  Likes: 0

Article Views: 1147    Report this Article