Not only is keeping track of your finances challenging, but you might also have to report your financial holdings to the United States government. This process is complex and confusing and can be intimidating. Reports of Foreign Bank and Financial Accounts (FBAR) must be submitted correctly. Mistakes might lead to civil penalties as well as criminal ones.
Americans who hold accounts in foreign banks or financial institutions must submit an FBAR to the U.S. government. The thing about these reports is that they are due around the same time as your taxes, but they are not filed with your taxes. Instead, FBARs go to the Financial Crimes Enforcement Network (FinCEN). The forms may be submitted online through a FinCEN digital portal. However, you might need help filing out the forms from an attorney or tax accountant, especially if your finances are complex. If filing online does not work for you, you have the option of a paper filing, but you must contact FinCEN to obtain the hard copies of the right forms.
Contact our tax CPAs at US Tax Help at this link – get in touch to get help with your FBAR and other financial filings.
Filing Your FBAR Online with FinCEN
In today’s increasingly modern and tech-reliant world, all sorts of important financial forms may be filed online, including FBARs. However, Your FBAR is not filed through the same online portals where you might file your taxes. Instead, you must use a specific online portal maintained by the United States government.
The Bank Secrecy Act (BSA) E-Filing System is set up specifically for forms and filing required by the Act, including FBARs. It is supported through a FinCEN-secured network and provides a safe and secure way for people to file FBARs and other forms online. Many people take advantage of this portal, especially Americans living abroad. Filing forms through the mail might be difficult if you live overseas.
Filing your FBAR online is often the fastest way to file your forms, but you should avoid filing too quickly. While you should definitely file on time, you should not file without having your forms reviewed by a tax accountant or an attorney. That way, you can file your forms online knowing that all the information is correct and you are using the right online forms.
How a Lawyer Can Help You File Your FBAR
While FBARs are financial forms, they often have legal implications or consequences, and you might need help from an attorney when you file your FBAR. Remember, the FBAR is required by the Bank Secrecy Act, which is designed to prevent financial crimes and fraud through foreign banks and financial institutions. If your forms are filed incorrectly, contain inaccurate information, or are filed late, you might face legal penalties. As such, having a lawyer by your side is not a bad idea.
Is your FBAR late? Maybe you did not realize you were required to file these forms until the deadline passed. This is not an uncommon problem, especially for people who try to handle complex finances on their own. While accidentally missing a deadline is not a crime, it might raise a few red flags with the government, and you might be questioned or even investigated. It is a good idea to hire a lawyer with experience dealing with financial issues.
Maybe you filed something incorrectly and are now under investigation. In this case, the stakes are a bit higher, and you should hire a lawyer to represent you and assert your defense. Your lawyer can help you convince the authorities that any problem with your FBAR is an unintentional mistake and that you can fix it.
Having a lawyer help you can be extremely beneficial in more ways than one. If you are being investigated, your attorney can help you confront allegations and prepare a defense if necessary. Your lawyer might be able to explain what happened to the authorities and hopefully make the problem go away.
Other Ways to File Your FBAR
Filing an FBAR online can be a fast and easy way to fulfill your legal obligations, but it might not work for everyone. Accessing the online portal might be difficult depending on where you live, especially if you live abroad where internet access is not as readily available. You have the option of filing paper forms in the mail, but you cannot just print these off yourself.
To file a paper FBAR, you must first contact FinCEN and ask for copies of the right forms. You must call FinCEN and request an exemption from e-filing. If your request is approved, FinCEN should send you copies of the forms you need. Be sure to go over your filing requirements thoroughly so you get the right forms. Information about where and how you mail the forms should be included with the forms when you get them.
You might want to consider having someone file on your behalf. A tax accountant or Los Angeles tax attorney can review your financial situation and complete and file your FBAR for you. This can be helpful for those who might not live within the United States and need a representative to handle certain financial dealings on their behalf. If you want to do this, you must file documentation with FinCEN authorizing someone to file for you.
Why Filing Your FBAR is So Important
Filing your FBAR is not just a legal obligation. Failing to file on file or filing incorrectly may lead to serious legal consequences. If you report your tax return on time and pay any taxes you might owe, the IRS is unlikely to impose penalties for a delinquent FBAR. However, if your taxes are also late or inaccurate, or this is not your first time filing a delinquent FBAR, you might be in some trouble. Remember, contact someone like a lawyer or tax accountant for help well in advance of the filing deadline.
Speak to Our Tax CPAs for Help with Your FBAR
Contact our tax CPAs at US Tax Help by calling this link – get in touch to get help with your FBAR and other financial filings.
If you move abroad and build up your savings in foreign bank accounts, the financial institutions you bank with may send the IRS information about your holdings.
The United States’ intergovernmental agreement (IGA) with India is a Model 1 IGA. To comply with FATCA, foreign financial institutions (FFIs) in India must report information on accounts linked to U.S. taxpayers to their national taxing agency, which must then send that information to the IRS. This is how the IRS stays up to date on Americans’ financial holdings and assets overseas and confirms which taxpayers must file Form 8938 to comply with the Foreign Account Tax Compliance Act (FATCA). Our tax accountants can ensure you stay compliant with all reporting requirements for offshore accounts to avoid costly penalties.
Call this link – get in touch to speak with the tax CPAs for American expatriates at US Tax Help about your filing requirements.
What Type of IGA Does the United States Have with India?
The United States has a Model 1 intergovernmental agreement with India. This dictates how foreign financial institutions in India report information about accounts linked to U.S. taxpayers to the IRS, as required by the Foreign Account Tax Compliance Act.
Under a Model 1 IGA, FFIs report information about U.S.-affiliated accounts to their national taxing agency. The Indian Revenue Service would then hand that information over to the American government. Under Model 2 agreements, foreign financial institutions give data and information to the IRS directly instead of passing it through their country’s taxing agency.
Model 1 IGAs are the most common type, with the majority of the over 100 countries that have IGAs with the United States using this model.
In general, the type of intergovernmental agreement a country has with the IRS is not hugely significant to American taxpayers who maintain offshore accounts there. What matters most is that the country where your financial assets and bank accounts are concentrated has an IGA in place with the United States at all. Most do, so anticipate the foreign financial institution you bank with to regularly send information about your accounts and finances to the IRS. The IRS will expect the information it gets from you on Tax Day to align with the information it gets from your FFI.
What Does India Having an IGA with the United States Mean for Expats?
If you expatriate to India from the United States, the fact that it has an IGA with the U.S. means it will give the IRS details about your foreign financial accounts. The information an FFI discloses should align with the details you disclose on Form 8938. Otherwise, you could incur substantial financial penalties from the IRS.
Because India has an IGA with the United States, the IRS will likely be aware of your foreign bank accounts and other financial assets before you disclose them on Form 8938 by Tax Day. The IRS is largely looking to see if you confirm what they already know. Accuracy on Form 8938 is crucial for FATCA compliance and to avoid financial penalties, and our tax CPAs for American expatriates can ensure this when assisting you with your tax return and any mandatory forms.
It could impose harsh penalties if the IRS realizes you have not complied with FATCA for recent tax years. The initial consequence for failing to file Form 8938 is $10,000, but it could increase to $50,000 if taxpayers ignore notices from the IRS about their non-compliance. Getting notices from the IRS when living in India can be difficult, delaying when taxpayers learn of the issue. By that point, the IRS might have already imposed a financial penalty.
Many people expatriate without fully understanding how their tax and reporting liabilities change. Even non-willful FATCA violations can lead to financial consequences. In fact, they likely will, as countries with IGAs with the United States are incentivized to honor them. Foreign financial institutions in India that don’t comply with FATCA can also be penalized, possibly facing a 30% withholding on U.S. income.
In short, India’s IGA with the United States means that the IRS will likely know about your financial holdings and assets, even if you fail to report them on Form 8938.
Does the IGA Between the United States and India Cover FBAR Violations?
IGAs under the Foreign Account Tax Compliance Act do not cover reporting to the IRS to monitor taxpayers’ FBAR reporting responsibilities. However, if an FFI in India reports your bank account balance to the IRS and you do not then file an FBAR, that would indicate a discrepancy to the IRS that it may investigate further.
Filing Reports of Foreign Bank and Financial Accounts became mandatory long before FATCA was passed in 2010. The reporting thresholds for filing FBARs are far lower than filing IRS Form 8938. Expats living in India must disclose their specified foreign financial assets if they exceed $200,000 on the final day of the tax year or $300,000 on any day during the tax year. Expats who live in India must file an FBAR if their foreign bank accounts exceed $10,000 at any time.
Under India’s IGA with the United States, it sends information to the IRS about U.S.-linked accounts, regardless of their amounts. This could tip the IRS off about your FBAR filing responsibility, even if your foreign accounts never reached the threshold for Form 8938 filing.
The penalty for non-willful FBAR violations is also $10,000, though it increases substantially if the IRS believes you intentionally did not submit an FBAR for that year. Our tax CPAs can help avoid FBAR penalties by submitting the appropriate forms and information to the Financial Crimes Enforcement Network by Tax Day.
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Tax season is stressful for many, especially for expatriates who need to figure out their new approach to filing after relocating abroad to a foreign country like Argentina.
Before moving out of the United States, prepare for what to expect from the upcoming tax season. After establishing residency in Argentina, the IRS will let you exclude much of your income from taxation. You may also avoid double taxation on your income by claiming the foreign tax credit, which we can do by filling out Form 1116 on your behalf and including it in your IRS tax return. Living in another country might generate new international information return reporting requirements for expats, and we can review your foreign financial assets and holdings to confirm if they apply to you. Expat taxes are due on Tax Day, but there are filing extensions taxpayers can benefit from if they need more time after a move abroad.
For help understanding and satisfying your IRS filing requirements, call the tax CPAs for American expats in Argentina of US Tax Help at this link – get in touch.
Tax Questions to Answer Before Americans Expatriate to Argentina
Moving to another country like Argentina might complicate your taxes even further. Not only do you still have to report your earnings to the IRS, but you might have to report your foreign financial assets and bank accounts if they exceed certain thresholds. Our tax accountants can help expats in Argentina confirm their U.S. tax liabilities and ensure they file on time to avoid costly financial penalties for non-compliance.
Will You Have to Report Your Income Annually to the IRS?
American expats must report their annual worldwide earnings to the IRS, whatever the source. You must report your income to the IRS if you continue working remotely for an American company or locally in Argentina. Using the foreign earned income exclusion (FEIE), our tax accountants may exclude a large portion of your income from IRS taxation – up to $1265,000 if you are filing alone or $253,000 if you are filing jointly with your spouse. We can do this by filling out Form 2555, which we can then submit with your tax return. Only certain expats can claim the FEIE, and we can confirm your eligibility.
Even if claiming the FEIE would eliminate your taxable income by the IRS, you must file Form 1040 and all necessary schedules and other tax documents on time to benefit from the FEIE and actually exclude your income from taxation. Otherwise, the IRS could assess financial penalties for failure to file.
Will You Have to Pay Taxes Twice as an Expat?
When Americans move abroad, they risk having two tax obligations: one to the IRS and another to their new country of residence, Argentina. Permanent residents of Argentina must report and pay income tax there. While planning your taxes, we may use the foreign tax credit by completing Form 1116 to demonstrate the income tax paid to Argentina, which the IRS can credit towards your U.S. tax burden. This helps prevent double taxation, which is paying taxes twice on the same income.
Will You Have Additional Reporting Requirements?
Expats in Argentina with considerable foreign financial assets may gain new reporting requirements after moving abroad, like a Report of Foreign Bank and Financial Accounts (FBAR). Any American with over $10,000 in or signature authority over foreign financial accounts must file an FBAR, whether they live abroad or not. You do not have to pay taxes when filing an FBAR; it is only for informational purposes. However, any expat who ignores their FBAR liability, whether willfully or not, may incur expensive financial penalties for non-compliance.
If you transfer your savings into a foreign bank account or accrue assets while you live abroad, you may also have to file Form 8938. Our tax CPAs can compare your specified foreign financial assets, such as bank accounts, stocks or securities, and interest in foreign entities, to IRS reporting thresholds so you do not incur penalties for failing to file Form 8938 when required.
Do You Need to Keep Paying State Taxes?
When you move from the United States to another country like Argentina, you may retain ties to your previous state of residence for some time. If you continue to own property or have bank accounts in your old state, you might still have a reporting liability there, even if you no longer live in the country. Relinquishing those ties might absolve you of having to file state income taxes sooner. Do not assume you no longer have to pay state taxes immediately after expatriating abroad, as this could lead to fines.
Will Your Filing Deadline Differ?
In general, the filing deadline for expatriate taxes is Tax Day, the same deadline for Americans living domestically. Expats do get extra time if they need it from an automatic IRS filing extension. Though interest will still accrue on unpaid tax if you do not file by Tax Day, you may not incur penalties and will have until June 15 to file, depending on when Tax Day falls. If you must file an FBAR, Form 8938, or other informational returns, they will likely be due on Tax Day as well.
Can You Still Claim the Standard Deduction?
When you move to Argentina from the United States, you can still claim many of the same deductions when filing your income taxes with the IRS. This includes the standard deduction of $14,600 for single filers for the 2024 tax year. Expats can also claim the child tax credit, and we can review which perks you’ve claimed in the past to see if you are still eligible for them after moving abroad.
Call Our Tax Accountants for Help Today
For assistance from our tax CPAs for American expats in Argentina, call US Tax Help today at this link – get in touch.
No matter what country you live in, taxes are inevitable. If you are an expatriate from the United States living in Guatemala, you likely will not be able to avoid paying U.S. taxes. Additionally, you might have tax obligations in Guatemala, depending on your living and working situation. It is best to speak to a tax professional about your situation before you file any tax returns.
If you are a U.S. citizen living and working abroad in Guatemala, you may owe both U.S. and Guatemalan taxes. As a citizen, you must file U.S. taxes no matter where you are. The United States taxes people based on their worldwide income, meaning the income you earn living in Guatemala might be subject to taxation. Depending on how long you have lived in Guatemala and your life there, you might be a tax resident and owe taxes there. However, we can help you determine if certain tax breaks and credits in the U.S. can help you avoid losing too much money to taxes.
Call our tax CPAs for American expats in Guatemala at US Tax Help at this link – get in touch to review your tax situation.
How to Pay Taxes as a U.S. Expatriate Living in Guatemala
Taxes are a near universal experience. Whether you move to a new country and start working abroad or remain in the United States, you must always submit U.S. tax returns. The only way you would not have to file U.S. taxes would be if you renounced your citizenship to move to Guatemala. On top of it all, you might also be required to pay taxes in Guatemala, even if you are not a citizen.
Your U.S. Taxes
The United States taxes citizens based on their worldwide income. As long as you are a citizen subject to taxation, you must file your U.S. taxes no matter where you live. Even the income you earn while living and working in Guatemala may be subjected to taxation by the United States government. For example, if you live in Guatemala and work for a business there, you still have to consider your U.S. tax obligations even if the money does not come from the United States at all.
On top of it all, you might also have to disclose information to the United States government regarding foreign accounts and assets. If you meet specific criteria, you might have to file a Report on Foreign Bank and Financial Accounts (FBAR). You must file an FBAR report if you have a financial interest in or authority over financial accounts outside the U.S. Additionally, those accounts must have an aggregate value of more than $10,000 at any time during the calendar year before you file taxes.
Your Guatemalan Taxes
Depending on your unique situation, you might have tax obligations in Guatemala. Many expats living in Guatemala are not citizens but are tax residents. This means that even though they do not have Guatemalan citizenship, expats still owe taxes in Guatemala. Tax residency laws vary from country to country, and you can ask our team for help determining whether you are a tax resident of Guatemala.
Generally, people may be considered tax residents of a foreign country if they have lived there for an extended period of time, own property, have a job, and have ties to their local communities. Again, these requirements will vary, and you should consult with a professional about your specific situation.
Possible Tax Breaks or Benefits You Can Utilize as a U.S. Expat in Guatemala
You might be able to take advantage of certain tax benefits in the United States to hopefully reduce your tax obligations and avoid being taxed twice on the same income. Remember, these tax credits and credits apply to your U.S. taxes, not your taxes in Guatemala.
Foreign Tax Credit
You might be able to claim a foreign tax credit to reduce your tax obligations in the U.S. This credit may be claimed if you actually paid foreign taxes in Guatemala. More specifically, this credit may only apply to specific types of taxes, including income, war profits, and excess profits. The credit works like a deduction. Whatever money you paid in foreign taxes may be deducted from the deductible income on your U.S. taxes. If you paid $1,000 in taxes in Guatemala, you may claim a $1,000 foreign tax credit.
Foreign-Earned Income Exclusion
You might instead take advantage of the foreign-earned income exclusion. To qualify, you must earn income from foreign sources, and your tax home must be in a foreign country. If you work in Guatemala, the foreign-earned income exclusion might greatly help you.
Foreign-earned income may be almost any sort of income earned in a foreign country. This even includes income earned from a U.S. based business or company as long as you are working abroad. For example, you might work in Guatemala, but the company you work for is a large company based in the United States. Your income may still be considered foreign-earned. However, people working abroad for the U.S. government may not qualify.
In 2024, you may exclude up to $126,500 of your foreign-earned income from your U.S. taxes. For many taxpayers, this might cover their entire income, drastically reducing their tax obligations.
How to Prepare Your Taxes in the U.S. and Guatemala
The best way to make sure your taxes are correct and filed on time is to work with a tax CPA. Taxes are notoriously complicated in almost any country, and dealing with taxes in more than one country might be a logistical nightmare. The sooner you talk to a tax professional about your situation, the sooner you can begin preparing.
We might need time to determine your tax obligations and whether you are eligible for any credits or exclusions. You might also have to gather information from the Guatemalan government regarding your tax residency status.
Contact Our Tax Accountants to Discuss Your Situation
Call our tax CPAs for American expats in Guatemala at US Tax Help at this link – get in touch to review your tax situation.
Apart from qualified distributions from Roth IRA accounts, retirement income is generally taxable. But if you move abroad to the U.K., for example, which country taxes that income?
A tax treaty might protect you from double taxation if you expatriate to another country, like the United Kingdom. Instead of the U.S. taxing your retirement income, the U.K. would. That said, you still have to report income from pensions or other retirement accounts to the IRS, even if the U.K. will tax it. Furthermore, you might have to file a Report of Foreign Bank and Financial Accounts, depending on the sum of your retirement plan. Our tax accountants can help you satisfy all IRS reporting requirements for retirement income, whether U.S. or U.K.-sourced, so you do not incur penalties from the agency while living in the United Kingdom.
For help satisfying your reporting requirements, call US Tax Help’s tax CPAs for American expats at this link – get in touch.
How Will My Retirement Income Be Taxed as a US Expat in the UK?
Suppose you live in the United Kingdom as an American expatriate and get retirement income from a U.S. pension or Social Security. In that case, only the U.K. can tax that income, enabling expats to avoid double taxation. Any qualified distributions from a Roth IRA account should be tax-free, even when Americans expatriate to another country, including the United Kingdom.
While some Americans expatriate after retiring, others move abroad well before that time and earn U.K. pensions or retirement benefits while living there. Since you still have to file taxes with the IRS after living abroad, you must report your U.K. pension on your U.S. tax return. To claim the benefits associated with the U.S.-U.K. tax treaty and avoid double taxation, our tax accountants can file Form 8833 alongside your annual return. Depending on the sum of your foreign pension plan and other foreign financial assets, you might also have to file Form 8938, Statement of Specified Foreign Assets.
The specifics of the U.S.-U.K. tax treaty will determine whether the U.S. or the U.K. taxes retirement income, such as from a 401(k) or pension. Our tax accountants can carefully review your situation to ensure you properly report your retirement income and do not incur unnecessary financial penalties.
Do I Have to Report My Retirement Income to the US Even if the UK Will Tax It?
Even if the U.S.-U.K. tax treaty dictates that the U.K. will tax your retirement income rather than the IRS, you must still report income from pensions or other retirement accounts to the IRS by Tax Day.
If your income as an expat is solely from a pension or other retirement account, whether the plan was from when you lived in the United States or was acquired after moving to the United Kingdom, you must report it to the IRS. Your worldwide income is taxable unless you claim the appropriate exemptions. To avoid double taxation on retirement income, you must also claim the treaty exemption, which our tax CPAs for American expats can do by completing Form 8833 and attaching it to your annual return. If you do not report your retirement income to the U.S. – even if you don’t have to pay American taxes on it – you could incur financial penalties from the IRS.
Tax Day is the filing deadline for all American taxpayers, even those who live abroad. If you need more time to report your retirement income to the U.S. government, the IRS may grant you an automatic two-month filing extension.
Additional US Reporting Requirements for UK Retirement Accounts
Suppose you’ve lived abroad long enough to get a pension or other retirement income from the United Kingdom. That might increase your reporting responsibilities to the IRS if you have retained your American citizenship all this time.
For example, if your foreign retirement account exceeds $10,000, you might have to file a Report of Foreign Bank and Financial Accounts, otherwise known as an FBAR. Informing the IRS of your foreign assets is important, or you could be fined up to $10,000, even for non-willful violations. Penalties for willful violations are much greater, up to $100,000 or 50% of the foreign account or retirement plan, which would be disastrous for expats who rely on those accounts to support themselves.
Help Planning and Preparing US Taxes for Retired Expats in the UK
If you moved to the United Kingdom and have reached or are close to retirement age, your reporting requirements and income might change, further complicating tax filing. Our tax accountants can assist expats in these situations, identifying deductions and other perks that lower their tax liability to the IRS.
If most or all of your income is from a pension or other retirement benefits, we can confirm which country will tax your income according to the U.S.-U.K. tax treaty. Remember, even if the U.S. is not the one to tax your retirement income, you still must keep the IRS updated about it and claim the appropriate exemptions.
We can help expats iron out these matters well before Tax Day so that they do not miss the filing deadline and risk incurring penalties. Suppose you were unaware that you must continue reporting retirement income to the United States after moving abroad. In that case, our tax accountants can help you file back taxes as soon as possible so that you can still claim the exemptions available under the U.S.-U.K. tax treaty regarding pensions and retirement accounts. We can also identify foreign bank accounts or other assets that must be reported to the IRS so that you do not incur any financial penalties for failure to report. You may be able to claim additional exclusions and credits while living abroad as well, and we can confirm your eligibility for such perks while planning and preparing your taxes.
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Lots of people leave the United States for new experiences abroad. Some settle down in other countries for the long term or even permanently. While living and working abroad can be exciting, it can also be legally complex. For example, many U.S. expats are surprised to learn they still have tax obligations in the United States. They might be even more surprised to learn they have tax obligations in their new country of residence, like Jamaica.
Expats from the United States often still must pay U.S. taxes even after moving abroad to Jamaica. On top of that, depending on your circumstances in Jamaica, you might have to pay taxes there. Jamaican law determines whether you are a legal tax resident, and you should discuss your situation with a tax professional. Having tax obligations in multiple countries can be expensive. We can help you find tax breaks, credits, or exclusions that might help you reduce your taxable income in the United States to make your life more affordable.
You can contact our tax CPAs for American expatriates living in Jamacia for help by calling US Tax Help at this link – get in touch.
Your U.S. Tax Obligations After You Move to Jamaica
Every American knows the frustration of filing their taxes. Some people believe they will never have to deal with their taxes in the U.S. again because they are moving to Jamaica or any other country. While your tax situation will almost certainly differ as an American expatriate, your tax obligations do not disappear. Whether on U.S. soil or across the globe, you must file your U.S. taxes.
If you are living in Jamaica but still a U.S. citizen, you likely still owe taxes in the United States. The U.S. taxes people on their worldwide income. This means that it does not matter where you work or where you are earning your income. It is all taxable by the United States government. Even if you are not a U.S. citizen but left the United States in the last year, you might still have to file your taxes one final time for the year leading up to your departure.
Expatriates often must file federal tax returns, and some might also have to file state tax returns. This may depend on which state you lived in before you moved to Jamaica. If you still own a home in the United States, you might have to pay state taxes wherever your home is located. Again, this might vary by state, and you should speak to our tax CPAs for American expatriates living in Jamacia for help.
One of the benefits of being an expatriate is having more time to figure out your tax situation. U.S. citizens living abroad have an automatic 2-month extension on their taxes. If this is your first year living in Jamaica, this extra time might be necessary to determine the extent of your tax obligations.
Your Jamaican Tax Obligations After Moving From the United States
Not only do you have to think about filing tax returns in the United States, but you must also think about whether you have tax obligations in Jamaica. Some expats assume that since they are not citizens of Jamaica, or whatever country they move to, they do not have to pay taxes. This is not true and might be an expensive mistake to make. Even though you might not be a Jamaican citizen, you might be a legal tax resident.
Whether you are a tax resident may be determined by Jamaican law. Factors used to determine tax residency tend to vary by country, but there are common factors that come up frequently. For example, your time in Jamaica may factor heavily into whether you are a tax resident. If you plan to stay in Jamaica for only a few months, you are likely not a tax resident. However, if you are there indefinitely or permanently and have been there for close to a year, there is a strong chance you are a legal tax resident and owe Jamaican taxes.
Many people relocate for work, and it is possible that you moved to Jamaica for a job opportunity or because your employer moved your position overseas. Earning income in Jamaica is a strong indicator of whether someone is a tax resident. Additionally, owning property in Jamaica makes you more likely to be considered a tax resident.
How to Reduce Your Overall Tax Obligations as a U.S. Expat in Jamaica
As an American expatriate in Jamaica, you might have tax obligations in both countries. This is not exactly ideal and may be incredibly expensive. We can help you find ways to reduce your tax obligations in the United States so that you can continue living and working abroad.
Foreign Earned Income Exclusion
As mentioned before, the U.S. government taxes citizens on their worldwide income, including income they earn working and living abroad in places like Jamaica. However, if you work in Jamaica, you might be able to claim a foreign-earned income exclusion to hopefully reduce your taxable income. The exclusion may apply to income earned while working in other countries, whether you are a citizen of that country.
To claim this exclusion, you must be a U.S. citizen who resides in a foreign country for at least one uninterrupted tax year or 330 full days during a 12-month period. Alternatively, you may be a U.S. resident alien who is a citizen of a country with a tax treaty with the U.S. who lives in another country for an uninterrupted tax year. As of 2024, you may exclude up to $126,500 of income while working in Jamaica, even if the income is from a U.S. source. For example, if you live in Jamaica but the company you work for is based in the United States, you may still claim this exclusion.
Foreign Tax Credit
Another option is to claim a foreign tax credit. This may be useful for those who pay larger taxes in Jamaica, as it allows them to deduct taxes paid to another country from their U.S. taxable income. If, for some reason, you owe significant Jamaican taxes, that money may be deducted from your U.S. taxes. This tax credit may only be applied to certain expenses, including income taxes, taxes on war profits, and excess profit taxes. This credit is taken as a deduction on Schedule A of Form 1040 of your U.S. taxes.
Contact Our Foreign Tax Accountants for Help with Your Taxes Today
You can get help from our tax CPAs for American expatriates living in Jamacia by calling US Tax Help at this link – get in touch.
Taxes are stressful enough when you live domestically, and moving abroad could complicate things further for taxpayers.
We must report all income sources, including any from American or Portuguese companies is important, as the IRS taxes citizens on their worldwide incomes, even if they work and live abroad. How long you have lived abroad will determine if you can claim certain tax perks, and we can see if you will pass IRS assessments like the bona fide residence and physical presence tests. We can also review your foreign bank accounts and financial assets to see if you must submit international information returns as well. We can help expats prepare and file their taxes before the deadline, as interest accrues on unpaid tax despite the IRS providing a two-month filing extension for expatriates living in Portugal and elsewhere around the world.
For help from our tax CPAs for U.S. expats, call US Tax Help today at this link – get in touch.
Preparing Your Taxes While Living in Portugal as a US Expat
Preparing U.S. taxes from abroad is challenging, as expats must identify and report all income sources and be prepared to report foreign accounts and assets above a certain threshold. Our tax accountants can organize the necessary information for your return and identify the exclusions that can lower your taxable income.
Confirm All Tax Liabilities
After moving to Portugal and living and earning income there for some time, you might gain a new tax liability. You will keep your reporting liability to the IRS when you relocate to Portugal, as U.S. citizens have to report their worldwide incomes no matter where they live. You may be taxed as a Portuguese resident if you live there for 183 days or more out of a calendar year. You may still have a tax liability in Portugal if you are a non-resident, though you may be taxed at a lower rate.
You must continue to file an annual tax return with the IRS each year you live abroad in Portugal. Expats can often exclude some or all of their incomes but still have to file the necessary paperwork with the IRS to do so. Otherwise, expats could incur substantial financial penalties for failure to file or pay what they owe. Falling seriously delinquent with the IRS could lead to additional consequences, like passport revocation.
Identify All Income Sources
When our tax CPAs for U.S. expats living in Portugal begin preparing your American taxes, we must identify all income sources to report them on your behalf. Expats must report their worldwide incomes, including any earned from foreign employers. You must also report income if you are self-employed while living abroad. Because our world is increasingly digital, workers may relocate to foreign countries and continue working for American companies remotely. All income earned from U.S. companies is reportable and taxable, even if expats live outside the United States.
Take Residency Tests
The IRS uses residency tests to determine if expatriates qualify for certain perks, like the foreign tax credit (FTC) or the foreign earned income exclusion (FEIE). The FEIE lets expatriates exclude a large portion of their income from U.S. taxation, up to $126,500 per person in 2024. The FEIE increases annually to adjust for inflation and is among the most useful benefits available to expatriates.
However, you must pass one of two residency tests to use it. We can assess whether you will pass the bona fide residence or physical presence tests by reviewing how long you have lived in Portugal since moving there. To be considered a bona fide resident, expats must live in a foreign country for an uninterrupted period, including an entire tax year. To pass the physical presence test, expats must show the IRS that they were in a foreign country for 330 full days of a 12-month period.
Confirming if you will pass either residency test is important, as doing so could also make you eligible for the FTC. This credit lets expats apply income and other taxes paid to the Portuguese government to their U.S. tax liability, reducing it and their chances of double taxation.
Report Foreign Accounts
Expats might transfer their savings to foreign bank accounts when permanently moving abroad. After living abroad for some time, expats might accrue foreign financial assets and holdings, which could create new reporting responsibilities. When preparing your tax return, our tax accountants can review your foreign financial accounts to see if you must file Form 8938 or complete a Report of Foreign Bank and Financial Accounts (FBAR). Form 8938 is for expats with more than $200,000 in foreign assets on the last day of the tax year or $300,000 at any time during the year. Filers living domestically might also have to file Form 8938 to report foreign financial assets, but their reporting thresholds are much lower.
FBARs get filed online through the Financial Crimes Enforcement Network and are used to report foreign bank accounts with $10,000 or more across them. As with Form 8938, there are serious penalties for not filing an FBAR when required. For example, you could lose up to 50% of the contents of your foreign bank accounts or be fined $100,000, whichever amount is greater.
File on Time
Preparing your taxes to file them by the deadline of Tax Day is important, despite the IRS offering filing extensions for expats. When you opt for this automatic two-month filing extension, effectively pushing your submission date to mid-June, interest still accrues on unpaid tax. So, if the FEIE and the FTC do not eliminate your U.S. tax liability, you might pay more than you would have owed even had you not used the filing extension. That said, you will not be penalized for late filing, provided you file by the extended deadline.
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Working from anywhere, even in another country, is possible in today’s increasingly digital world. While some people move to countries like Hungary for job opportunities, others are “digital nomads” who move for fun while maintaining a remote job in the United States. While living this kind of life can be exciting, it can also be complicated when it comes to taxes.
If you are a U.S. expat living in Hungary, you should seriously consider talking to our tax professionals about how to file your taxes, both in the U.S. and Hungary. You might have tax obligations in both countries and be taxed twice on your income, depending on the situation. Our team can help you work to minimize your tax obligations and avoid paying double taxes on your income. We can also help you comply with reporting requirements for things like foreign assets and accounts that must be disclosed to the IRS.
Contact our tax CPAs for American expatriates living in Hungary at US Tax Help by calling this link – get in touch.
How US Expats Living in Hungary Pay Their Taxes
Taxes are inevitable and inescapable. Even people who leave the United States to live and work in a place like Hungary are still obligated to pay their U.S. taxes if they are still citizens. While paying taxes is nothing new, you might also have certain tax obligations in Hungary. In short, you might have to pay taxes in two countries, which could turn into a very expensive way of living.
Taxes in the United States
U.S. citizens are taxed on their worldwide income, not just income derived from the United States. This means that if you are a U.S. citizen living and working in Hungary and earning income from Hungarian sources, you must still pay income taxes in the United States. This might come as a surprise to some, but leaving U.S. soil does not absolve you of your tax obligations.
If you are unsure of how to pay your U.S. taxes while living in Hungary, you might have more time to figure things out than you realize. Expats living abroad may have an automatic 2-month extension for their taxes, giving them additional time to get things together.
You might also have to disclose information about your assets in Hungary to the IRS. Do you have accounts with Hungarian banks? Do you own property in Hungary? Do you have interests or holdings in Hungarian assets? If the answer is yes, talk to a tax professional about what you need to disclose and whether it affects your tax obligations in the United States.
Taxes in Hungary
In addition to your U.S. tax requirements, you must consider whether you also have tax requirements to fulfill in Hungary. You might not be a Hungarian citizen, but living and working there might make you a legal tax resident. If that is the case, you are responsible for filing Hungarian taxes in addition to U.S. taxes.
The first hurdle to jump is determining whether you are considered a tax resident of Hungary. You might need to consider multiple factors to determine the answer to this question. How long have you lived in Hungary? What is your job in Hungary? Do you have strong social connections or connections with your community in Hungary? People who have been living in Hungary for a longer period, own property, have jobs, and are tied to Hungarian communities are more likely to be considered tax residents.
Also, consider any legal paperwork or documentation you might have received since living in Hungary. If you qualify as a tax resident, your employer in Hungary might have given you documentation to that effect. It should also be noted that in Hungary, personal income is taxed at a flat rate of 15%. The same income may also be taxed by the United States.
How US Expats in Hungary Can Reduce Their Tax Obligations
Paying taxes on the same income twice is not exactly ideal. To protect your income, you may take advantage of certain tax breaks, credits, or exclusions to reduce your taxable income in the United States. Exactly which tax breaks you can claim and which work best for your situation depends on your unique circumstances.
Foreign Tax Credit
If you have already paid or accrued foreign taxes in Hungary, a foreign tax credit might help you reduce your taxable income in the United States. The foreign tax credit may be taken as a tax deduction on Form 1040. In short, the money you have already paid toward your Hungarian taxes may be subtracted from your U.S. taxes. For example, if you owe the Hungarian government $1,000 in taxes, you may take a $1,000 deduction on your U.S. taxes as a foreign tax credit. The more money you pay in foreign taxes, the less you should pay in American taxes. This might be a good option if you pay high taxes in Hungary.
Foreign-Earned Income Exclusion
If you live in Hungary because you have a job there, you might instead want to explore the foreign-earned income exclusion. Some people working overseas work for American-based companies, but their job requires them to work in a foreign market. Their income is technically derived from the United States, not Hungary. However, if you move to Hungary and get a job with a Hungarian business or company, your income is foreign-earned and may be excluded from your U.S. taxes, at least to a certain extent. As of 2024, you may exclude up to $126,500 of foreign-earned income from your U.S. taxes. This might allow many to exclude their entire income or close to it.
Disclosing Financial Information to the IRS as a US Expat in Hungary
When meeting with a tax professional to discuss your domestic and foreign tax obligations, you should discuss whether you must report or disclose any foreign financial holdings or interests to the IRS. The IRS does not always tax these holdings, but they might still need to be reported. Failing to report certain holdings, accounts, or assets could lead to penalties.
First, you should ask whether you must submit a Report of Foreign Bank and Financial Accounts (FBAR). Such reporting is required as part of the Bank Secrecy Act and prevents people from hiding money in offshore accounts. You are required to submit FBAR reports only if you have accounts or hold interest in assets located outside the United States and those accounts or assets were valued at more than $10,000 at any time during the calendar year.
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Tax season is hard enough when you live in the United States. If you move abroad to Denmark, filing your taxes might become even more complicated, and our tax accountants are prepared to help.
While living abroad in Denmark, expats still have to file annual tax returns with the IRS, starting with Form 1040. Expats may have to attach various forms to Form 1040, including Form 8938, which they can use to disclose foreign financial assets above the reporting threshold. Other forms are used to claim tax benefits for expats, like Forms 1116 and 2555, which can help expats avoid double taxation and lower their taxable incomes. Preparing all necessary forms by Tax Day to prevent interest accruing on unpaid taxes is crucial. That said, the IRS provides filing extensions for expats, which you can use if necessary to avoid financial penalties for late filing.
For assistance from US Tax Help, call our tax CPAs for U.S. expats at this link – get in touch.
Tax Forms US Expats May Need to File After Moving to Denmark
After moving to Denmark, expats might face new filing requirements on top of the typical IRS Form 1040. New filing requirements may include IRS Forms 8938, 2555, and 1116, among others. Identifying which forms you have to file is important, as failure to submit any to the IRS could result in steep financial penalties.
IRS Form 1040
Expats must typically report their gross annual income using IRS Form 1040 or the appropriate variant. Our CPAs for U.S. expats living in Denmark can use Form 1040 to report any income, whether it comes from a foreign or domestic source. Americans must file an annual tax return no matter where they live as long as they retain U.S. citizenship.
IRS Form 8938
Completing IRS Form 8938 is mandatory for expats with certain specified foreign financial assets. Unmarried taxpayers living outside the U.S. have to file Form 8938 if their foreign financial assets exceed $200,000 on the last day of the tax year or $300,000 at any point during the tax year. For married U.S. taxpayers living in Denmark and filing joint returns, the reporting threshold for Form 8938 doubles.
Types of reportable foreign financial assets include bank and financial accounts with foreign financial institutions, interest in foreign entities, and certain foreign stocks and securities. We can further clarify reportable assets for Form 8938 so that you do not unintentionally fail to report them, which could lead to financial penalties from the IRS.
IRS Form 2555
IRS Form 2555 lets expats in Denmark claim the foreign earned income exclusion. Using Form 2555, our tax accountants can figure your exclusion based on your income from foreign sources. Currently, expats can exclude up to $126,500 of their income from taxation. This exclusion only applies to your IRS tax liability, not your tax liability to the Danish government.
If you and your spouse are both American citizens living in Denmark, you can each claim the foreign earned income exclusion, further reducing your household’s taxable income.
IRS Form 1116
Expats could have to pay taxes on the same income twice if they do not claim the foreign tax credit using IRS Form 1116. This lets you apply income, war, and excess profits taxes paid to the government in Denmark to the IRS, reducing your tax liability as much as possible.
To qualify for the foreign tax credit, or the foreign earned income exclusion, for that matter, you must pass certain tests set by the IRS. They are the bona fide residence and physical presence tests. These assessments aim to see whether or not an expat has resided in another country long enough that their tax liability to a foreign country would outweigh that of the United States. We can use the IRS’ criteria to determine if you pass either test and can reap the benefits of the foreign tax credit while living in Denmark.
FinCEN 114
In addition to reporting your foreign financial assets to the IRS using Form 8938, you may also have to report foreign bank accounts to the Financial Crimes Enforcement Network (FinCEN) using Form 114. This is known as a Report of Foreign Bank and Financial Accounts (FBAR), and American taxpayers must complete this form if they have over $10,000 across foreign bank accounts in a tax year. This reporting requirement applies to all U.S. taxpayers, not just expats living outside the country. We can confirm your FBAR liability and help prepare and submit Form 114 online through FinCEN’s BSA E-Filing System.
Tax Filing Deadlines for Expats Living in Denmark
While the same Tax Day deadline for domestic residents applies to expats, the IRS is a bit more lenient with those who live abroad, giving them an automatic two-month filing extension they can take advantage of if necessary.
That said, when expats do not file their taxes by Tax Day, interest will start to build on unpaid tax. While expats won’t get fined for filing later than Tax Day if they qualify for the two-month extension, interest combined with the cost of unpaid tax could start to add up. Despite often having until mid-June to submit their taxes without facing penalties, our tax accountants will focus on preparing the necessary forms for expats and filing them with the IRS by the normal Tax Day deadline.
Expats initially unaware of their continuing tax liability to the United States might miss Tax Day and the extension for expats. In these situations, we can help expats request an additional six-month extension from the original due date, putting the new deadline in mid-October. This is done using Form 4868. Living overseas won’t protect you from financial penalties for failure to file from the IRS, but our tax accountants can by planning, preparing, and filing all necessary tax forms on time.
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The Dominican Republic might offer that slower pace of life many yearn for, making it a popular location for Americans to expatriate to. When expatriating, confirming your continued tax responsibility and learning how it might change is crucial so you do not fall delinquent on your U.S. taxes.
Relocating to the Dominican Republic from the U.S. will not absolve you of your need to file an annual return with the Internal Revenue Service (IRS). Although you have to file taxes, you might not have to pay much to the IRS after claiming tax benefits for expatriates. These include the foreign tax credit (FTC) and the foreign earned income exclusion (FEIE), which work to eliminate double taxation and lower expats’ taxable incomes. There are extra filing requirements for expatriates with certain foreign financial assets and holdings, which our tax accountants can explain after reviewing your overseas finances. These include IRS Form 8938 and a Report of Foreign Bank and Financial Accounts (FBAR), which are due alongside tax returns.
Call US Tax Help’s tax CPAs for U.S. expats living in the Dominican Republic today at this link – get in touch.
Do Expats Who Live in the Dominican Republic Need to File US Taxes?
The only way to eliminate your tax filing responsibility with the IRS is to give up your American citizenship. Otherwise, you must file an annual return with the IRS when you expatriate to the Dominican Republic.
While many countries only tax residents, the United States taxes citizens wherever they live. Even if you do not have to pay taxes after our tax CPAs for U.S. expats prepare your return, you must still file that return with the IRS, preferably before Tax Day.
When preparing your return, we will include income from all sources, as the IRS assesses taxes on worldwide income, not just income earned in the United States. We must provide information about your foreign employer and foreign assets, as well as other general financial and personal information.
Americans must file returns by the deadline of Tax Day to avoid interest accruing on unpaid taxes. That said, there is an automatic two-month filing extension for overseas U.S. citizens. This can be particularly useful if you have only recently moved abroad, learned of your continuing tax liability, and need time to sort things out. Remember that the extension to file does not stop interest from building on taxes owed to the IRS, which is why aiming for the normal filing deadline is still preferable for overseas taxpayers.
While you live in the Dominican Republic, the government there may also tax you on your income, so make sure to confirm your tax liability in your country of residence.
Complying with FATCA Reporting Requirements as an Expat Residing in the Dominican Republic
The Foreign Account Tax Compliance Act (FATCA) expanded filing responsibilities for expats and Americans with foreign bank accounts or financial assets. Learning about these additional responsibilities and how they might affect your tax return is important, lest you incur financial penalties.
FATCA created additional reporting requirements for those with certain foreign financial accounts and interests, namely IRS Form 8938. The reporting thresholds from Form 8938 vary, depending on whether taxpayers live in the United States or have expatriated elsewhere, such as the Dominican Republic. Furthermore, the filing threshold for married couples is twice that for single taxpayers.
Expats typically only need to be concerned about filing Form 8938 if they have hundreds of thousands of dollars in foreign assets, such as foreign bank accounts, securities, stocks, and bonds. We can monitor your FATCA reporting responsibilities as you accrue foreign assets while living in the Dominican Republic to ensure you do not fall delinquent with this vital international information return.
Taxpayers who do not report foreign assets on Form 8938 might be fined $10,000 per violation. If taxpayers continue to ignore the IRS after being notified of their failure to report, they could incur an additional $50,000 financial penalty.
Though not part of FATCA, Reports of Foreign Bank and Financial Accounts are reporting requirements for expats with upwards of $10,000 in their foreign bank accounts. Expats must file FBARs in addition to Form 8938, and failing to file either may lead to serious consequences for expatriates.
Does the US Have Tax Exclusions and Credits for Expats in the Dominican Republic?
The United States provides exclusions and credits for expats so that they can reduce their taxable incomes or avoid the effects of double taxation while staying in compliance with IRS reporting mandates for expatriates and preventing penalties.
The Foreign Earned Income Exclusion
The foreign earned income exclusion can reduce your taxable income in the IRS’ eyes. Currently, the FEIE limit is $1265,00, and each taxpayer can exclude this amount. That means married couples filing joint returns can each exclude $126,500, substantially reducing their joint taxable incomes. If claiming the FEIE eliminates your taxable income because it is lower than the exclusion limit, you still have to file a return. Our tax accountants can figure out your FEIE amount using Form 2555. We will also use this form to calculate your foreign housing exclusion. This lets expats exclude certain housing costs paid for with employer-provided funds.
The Foreign Tax Credit
The foreign tax credit works differently from the FEIE. Instead of reducing taxable income, the FTC applies taxes paid to foreign governments to taxpayers’ liability to the IRS. This helps prevent double taxation, the risk of being taxed twice on the same income by two different governments. We can figure out your foreign tax credit using IRS Form 1116, which we can attach to your tax return and submit to the IRS by Tax Day.
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