Expat Taxes (2018) – U.S Tax FAQ Guide, Citizens Abroad Requirements
At Golding & Golding, we specialize in international tax and have clients spanning over 60 different countries. Oftentimes, we represent expats who have relocated overseas for any number of different reasons.
A common theme amongst expats is that they no longer have to file US tax returns since they do not reside in United States, and usually any income they receive is not U.S. sourced.
Expat Tax & Reporting Rules
Unfortunately, the United States uses a worldwide income/Taxation model. In other words, The United States taxes you on your worldwide income.
It does not matter if you reside overseas and all of your income is foreign source — If you are a U.S. Citizen or Green Card Holder, then typically IRS taxes you on your worldwide income (exceptions, exclusions, and limitations apply).
IRS Tax & Reporting Penalties
Therefore, if you meet the threshold requirements for having to file a U.S. tax return but did not do so, there can be still fines and penalties involved with not filing the returns timely. These penalties can be compounded by the fact that the IRS also requires a broad range of different international information returns to be filed by individuals, estates, trusts, and businesses with foreign income, assets, accounts and investments.
Whether or not you have to file informational returns will depend on the types of foreign investments that you have, the amount of money you have invested, and whether or not you meet the threshold requirements for filing (reporting requirements vary based on the different type of forms you may be required to file).
You Can Safely Get Into Compliance
Depending on your research skills, and the google search “luck of the draw” you may have landed on websites that are considered “fear mongering” websites. These sites are designed to scare you into believing you are automatically going to jail and hit with a $500,000 fine just for being out of compliance – which is not necessarily the case.
Golding & Golding, A PLC
We have successfully represented clients in more than 1000 streamlined and voluntary disclosure submissions nationwide, and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.