Tax Disclosure & Compliance
The United States is one of a handful of countries that vigorously pursues taxes worldwide. Don’t expect to avoid a US tax debt or avoid paying US tax by moving overseas. The United States has tax treaties and agreements with over 68 countries where the IRS and the foreign tax agencies exchange tax data on their residents. The list is increasing as more countries participate in the information sharing program. You may think because you are earning money in another country and paying tax in that country that you don’t have a US tax liability with the associated filing and disclosure requirements. That is not the case. You still should file a tax return with the IRS every year whether you have income or not. Also, if you have a foreign bank account there are additional disclosure requirements.
What must U.S. Citizens and Residents Living Abroad do to Maintain Tax Compliance?
U.S. citizens and residents living abroad have a duty to report and pay taxes on income world-wide. This duty exists regardless of where the money was earned or the country where you are physically present. In short, if you wish to comply with U.S. tax law you may need to pay taxes and disclose information avoid penalties. Ted Kleinman can explain US tax law, including income tax regulations, to you in a knowledgeable, yet, straight-forward manner. Furthermore, Ted Kleinman can explain the interactions and interplay between income taxes and international compensation agreements.
Understanding your Relevant Tax Considerations Before Relocating
Prior to relocating outside of the United States, it is prudent to become informed of the tax considerations and implications. Moving prior to fully considering your options can result in less than optimal financial outcomes. If you work with Ted Kleinman prior to your international move you are are likely to consider a broad array of factors. These may include:
- Pre-move consultations
- Determination of tax home.
- Preparation of federal and state income tax returns.
- Determination of elements of taxable income.
- Determination of timing of income (now, later or never) including an evaluation of constructive receipt.
- Consultation regarding severance arrangements.
- Recommendations regarding fringe benefits.
- Application of totalization agreements.
- Analysis and evaluation of foreign tax credit issues.
While there are many other considerations to address prior to an international relocation, the foregoing provides a brief sample of the types of concerns Ted Kleinman can address.
Handling a Broad Array of Concerns for U.S. Expatriates
While we have already discussed the reporting requirements that U.S. citizens and green card holders have regardless of where they may be present in the world, this is far from an expat’s only concerns. Aside from handling the preparation and filing of your U.S. state and federal taxes, Ted Kleinman can also advise you regarding:
- Potential tax deductions due to purchase of supplies, travel, or entertainment.
- The application of totalization agreements to avoid double-taxation.
- Foreign tax credit issues
- The design and implementation of tax protection and equalization programs.
- Determining the taxable elements of income.
In short, Ted Kleinman can provide experienced and trusted tax guidance for a broad array of tax concerns held by U.S. citizens or legal permanent residents who are living abroad.
At both the state and federal level, the United States enforces very strict tax laws — and in turn, very harsh penalties for those who violate them. As a result, it is critically important to make sure that you remain in compliance with the law when visiting the US.
Tax law is already complex, and when you’re an international visitor, the rules and regulations can become even more complicated. At the same time, even a seemingly minor error or violation can have devastating effects on your immigration status, your finances, your employment, and your everyday life. If you’re planning on entering the United States, it is critically important to work with a knowledgeable CPA to make sure your transition is smooth, efficient, and in accordance with all pertinent tax regulations as a foreign investor or taxpayer.
Time is of the essence where tax law is concerned, and missing a deadline could have long-lasting negative repercussions, so don’t wait until it’s already too late. To set up a private consultation, call CPA Ted Kleinman at (541) 923-0903 today.
International Services US Tax Help Offers
Ted Kleinman CPA has more than 30 years of experience helping foreign visitors to the United States prepare their taxes. US Tax Help specializes in international clients, and offers services and consultations including but not limited to::
- Constructive Receipt Evaluation – Constructive receipts determine whether you received gross income and are liable for income credited to your account.
- Foreign Tax Credit Analysis – Are you eligible for credits or deductions on foreign income taxes? Foreign tax representation can help you find out.
- Payroll and HR Coordination – US Tax Help takes care of coordinating your paperwork so that no documentation falls through the cracks. Our business tax resources can become a primary asset for your company.
- Preparation of Income Tax Returns. If a tax return is prepared incorrectly and contains inaccurate data, you can be penalized by the IRS.
- Severance Arrangement Consultations – Some severance arrangements are more favorable than others. Are you getting the best agreement possible?
- Taxable Income Determinations – Not all types of income are taxable. Which elements of your income are subject to income tax? Which are not?
- Tax Equalization and Protection Programs – People who pay taxes in one country but work in another may be subject to tax equalization, which tries to balance costs abroad with costs at home toward a neutral end result.
- Totalization Agreements – The US has enacted Totalization Agreements with two dozen nations around the world, including France, Germany, Australia, Switzerland, and Japan. These agreements influence which sorts of taxes you are subject to, including Social Security and Medicare.
Whether you want to maximize your deductions, determine your tax home, or need advice about making an advantageous fringe benefits decision, US Tax Help is ready to assist.
How Being a US Resident or Nonresident Affects Your Taxes
One of the first steps toward compliance is filing a timely and accurate tax return, which means you must make a determination about whether you are designated as a resident or nonresident for US tax purposes.
It is important to understand that your tax residency status is a completely separate matter from your immigration status. For example, you may simultaneously qualify as a US resident for tax purposes, while remaining a nonimmigrant alien for immigration purposes. Additionally, if you are classified as both a resident and nonresident during the same year, you are what’s called a dual status alien, and must abide by a special set of rules and regulations.
If you are a resident for US tax purposes, you fall under the same rules and file the same forms as a US citizen. That means you pay tax on your worldwide income, and not just income sourced from the United States. Alternately, if you are a nonresident, you will file a special tax form, pay tax only on US source income, be subject to special rates, and may also qualify for treaty exemptions.
Whether you are a resident, nonresident, or dual status alien, Ted Kleinman can help. To schedule a confidential consultation, call US Tax Help right away at (541) 923-0903, or contact us online. Let’s start exploring your financial options.
Put My More than 20 Years of International Tax Experience to Work for You
For more than 30 years Ted Kleinman of US Tax Help has helped U.S. expats and residents living abroad handle serious tax concerns and tax issues. I offer consultations and extension of tax resources by phone or by email. To schedule your and confidential tax consultation, call 541-923-0903 or contact us online today