US Expats & PTs Beware: June 30th Deadline for FBAR

Expats and PTs are not the only ones who need to beware the dread FBAR report!  If you have any financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

United States persons are required to file an FBAR if:

1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

Exceptions to the FBAR reporting requirements can be found in the FBAR instructions. There are filing exceptions for the following United States persons or foreign financial accounts:

1. Certain foreign financial accounts jointly owned by spouses;
2. United States persons included in a consolidated FBAR;
3. Correspondent/nostro accounts;
4. Foreign financial accounts owned by a governmental entity;
5. Foreign financial accounts owned by an international financial institution;
6. IRA owners and beneficiaries;
7. Participants in and beneficiaries of tax-qualified retirement plans;
8. Certain individuals with signature authority over but no financial interest in a foreign financial account;
9. Trust beneficiaries; and
10. Foreign financial accounts maintained on a United States military banking facility.

Look to the FBAR instructions to determine eligibility for an exception and to review exception requirements.

A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income. Checking the appropriate block on FBAR-related federal tax return or information return questions (for example, on Schedule B of Form 1040, the "Other Information" section of Form 1041, Schedule B of Form 1065, and Schedule N of Form 1120) and filing the FBAR, satisfies the account holder's reporting obligation.

The FBAR is not filed with the filer's federal income tax return. The granting by the IRS of an extension to file federal income tax returns does not extend the due date for filing an FBAR. You may not request an extension for filing the FBAR. The FBAR must be received by the IRS on or before June 30 of the year following the calendar year being reported.  File by mailing the FBAR to:

United States Department of the Treasury

P.O. Box 32621

Detroit, MI 48232-0621

If an express delivery service is used, file by mailing to:

IRS Enterprise Computing Center

ATTN: CTR Operations Mailroom, 4th Floor

985 Michigan Avenue

Detroit, MI 48226

Delivery messenger service contact telephone number: (313) 234-1062

Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both. 

On July 18, 2011, FinCEN announced that it has developed an electronic filing system that will accept the FBAR form.  E-filing is a quick and secure way for individuals to file FBARs.  Filers will receive an acknowledgement of each submission.  For more information about FBAR e-filing, read the FinCEN news release.

For more info from the IRS (in exceptionally byzantine fashion) see: http://www.irs.gov/businesses/small/article/0,,id=148849,00.html.  Note that the IRS is targeting expats and PTs in particular in search of your foreign bank and other accounts.  But all "US persons" with foreign bank accounts and other financial interests abroad are subject to FBAR.

US Expats & PTs May Benefit from Foreign Earned Income Exclusion

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income from all sources.  However, you may qualify to exclude from income up to an amount of your foreign earnings that is now adjusted for inflation ($91,400 for 2009, $91,500 for 2010, $92,900 for 2011, $95,100 for 2012). I n addition, you can exclude or deduct certain foreign housing amounts.

You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer. Refer to Exclusion of Meals and Lodging in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, and Publication 15-B, Employer's Tax Guide to Fringe Benefits for more information.

To meet the bona fide residence test or the physical presence test, you must live in or be present in a foreign country. A foreign country usually is any territory under the sovereignty of a government other than that of the United States.  The term "foreign country" does not include U.S. possessions such as Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, or American Samoa.  This applies to the typical expat, living and working abroad for an extended period, with an employment visa or legal residency.

For PTs, you want to fulfill the physical presence test.  You meet the physical presence test if you are physically present in a foreign country or countries for at least 330 full days during a period of 12 consecutive months. The 330 qualifying days do not have to be consecutive. The physical presence test applies to both U.S. citizens and resident aliens.

The physical presence test is based only on how long you stay in a foreign country or countries. This test does not depend on the kind of residence you establish, your intentions about returning, or the nature and purpose of your stay abroad.

Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a "tax home" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes.

If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live.  If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant and your tax home is wherever you work.

As usual, IRS regulations are byzantine.  For more info on the Foreign Earned Income Exclusion and housing exclusion from IRS, see:

http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html. 

It's Tax Time for American Expats & PTs

June 15^th is the IRS income tax filing deadline for Americans!  While the term PT usually stands for Perpetual Traveler or Prior Taxpayer, US citizens, legal permanent residents and other “US persons” (defined by IRS) are Permanent Taxpayers wherever they go.

If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the US on the regular due date of your return, you are allowed an automatic 2-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15.

If you are unable to file your return by the automatic 2-month extension date, you can request an additional extension to October 15 by filing Form 4868 before the automatic 2-month extension date.  However, any tax due payments made after June 15 will be subject to both interest charges and failure to pay penalties.

If you are a U.S. citizen or resident alien (Green Card Holder) and you live in a foreign country, mail your U.S. tax return to:

Department of the Treasury

Internal Revenue Service Center

Austin, TX 73301-0215

Estimated tax payments should be mailed with form 1040-ES to:

Internal Revenue Service

P.O. Box 1300

Charlotte, NC 28201-1300

Taxpayers with an AGI (Adjusted Gross Income) of $57,000 or less can electronically file their tax return for free using freefile.  Taxpayers with an AGI greater than $57,000 can either use free fillable forms or efile via commercial software programs.  A limited number of companies provide software that can accommodate foreign addresses.  

Don't forget you may be subject to the Foreign Earned Income Exclusion!  There is one benefit for Americans living & working abroad.  See TravelTellers' next post.  More to come on US taxes and financial reporting for American expats. and PTs

Here are some links to IRS publications & tax forms:

Publication 54, Tax Guide for U.S. Citizens and Residents Abroad (PDF)

Publication 519, U.S. Tax Guide for Aliens (PDF)

Publication 4588, Basic Tax Guide for Green Card Holders: Understanding Your U.S. Tax Obligations (PDF)

Publication 4732, Federal Tax Information for U.S. Taxpayers Living Abroad (PDF)

For detailed info from the IRS see:

 http://www.irs.gov/businesses/small/international/article/0,,id=97324,00.html

Safety Is Always a Major Concern for Road Warrioresses

While a grad student, a few classmates and I went to Houston for a professional conference.  I left my small group - and roommate for that trip - downstairs to run back to my room for something.  One man got in the elevator with me, but it was not a concern until we got off the elevator and he started following me down the hall.  I got my room key in hand quickly, unlocked the door and grabbed the safety latch as I closed the door.  Just in the knick of time!  He stuck his hand in the doorway as I tried to close it.  Fortunately, I got the latch over the edge of the knobby-thingy just enough to prevent him from opening the door.  I crashed my weight against the door and slammed it on his hand.  With a few yelps, he took off!

Don't worry about the guy's hand in such a situation!  Quick thinking and quick movement saved me.

But it made me safety conscious even before beginning a job which required near-constant travel.  I always slip the safety latch (better) or safety chain as I enter my hotel room door.

So imagine my distress when - for the first time in years of travel in numerous countries - I discovered the safety latch on the door of my hotel room was broken.  I latched it, and only later noticed the screw was loose and did not latch securely.  I checked out.

Your safety and security has to be your constant concern on the road.  Your first line of defense is to PAY ATTENTION!  Victimizers look for the person who is distracted, who fails to look around, pay attention not only to what they are doing, but to what is going on around them.

Before you explore a market, secure your shoulder bag - put it diagonally across your shoulder and toward your front.  Zip it up.  Otherwise, a pickpocket can dig in an open bag or slip it off your shoulder and run away with it.

Who is paying attention to you or your "stuff" instead of the sights?  That should put you on alert.  Anyone following you?  Have your room key ready to insert & slip inside quickly, fasten the safety latch.

There are lots more safety tips - and do share yours here!  But your first line of defense is your own powers of observation.  Develop the fine art of observing carefully and constantly.

May your road rise up to meet you!

Ann

Promised Update!

I promised an update if I got any response from Denny's after a very distressing experience there while on-the-road.  Excellent responses from corporate headquarters, followed up by a personal phone call from the owner of the local Denny's.  They obviously care about customer service and retaining customers.  Every company should have such prompt response to customer concerns.  Textbook case of providing superior customer service and prompt response to customer concerns.
Any business can run into a problem.  Everyone makes mistakes from time to time.  We're human.  It's the response when there's a mishap, goof-up, or Big Mess which counts.  Denny's is back on my go-to list.  They really do care about providing customers with decent meals at a modest price and good service.  They showed that with prompt response and actions to follow up with that misbegotten manager.

Traveling is stressful.  No doubt about that.  Good customer service you can count on matters a great deal to travelers.  And I'm pleased that Denny's from the very highest levels down through the local restaurant understand and act on customer concerns.  An aberrant employee does not reflect the organization in this case.

So despite the dust-up, I'll be happy to patronize Denny's once again.

May your road rise up to meet you!

Ann

Pack a Straw!

Of all the surprising items to pack when you travel, a drinking straw has to sound the weirdest!  But pack one or two to spare you from damaged jewelry, knotted chains, and frustration.
Slip one end of your necklaces and bracelets into a length of plastic drinking straw, then fasten the catch.  They will not scratch or tangle.  You only need a piece of straw about one-third the length of your necklace or bracelet, so one straw may suffice for several pieces.  For fine chains, you can often slip two into one section of a straw, and the two necklaces still will not tangle and knot up.  Pendants on your chains, of course, remain outside the straw, so no problem there.

I've found the best straws at (of all places) MacDonald's and Wendy's.  Since they serve thick shakes and Frosties, their straws have a larger diameter than those from, say, KFC.  Perfectly adequate to hold a nice thick rope-style chain necklace.  And they are plastic straws, so these can last for ages.  You can easily cut a convenient length with manicure scissors or whatever is handy. 

When you take off your jewelry, slip chain end into a short piece of straw, fasten the catch, and put away in your jewelry roll.  Keeps your precious possessions safe.  Without adding any weight or bulk to your baggage.  (Mine's usually overstuffed to begin with!)

Pick up a spare straw next time you treat yourself to a shake or soda, and stash that straw in your luggage, ready for your next episode of pack-and-takeoff.

May your road rise up to meet you!

Ann

When Major Chains Are Not the 'Safe' Choice

Chain restaurants are not necessarily the 'safe' or 'known' choice when you are on the road.  When traveling constantly through strange surroundings, certainly there are times when we've simply 'had enough strangeness' and seek out familiar turf - like popular restaurant chains.  We expect a known quantity in menu, surroundings, service.

Today I've had a distressing reminder that major chains are not necessarily a comforting choice when on-the-go.  I stopped at Denny's for my favorite kind of omelet and a stream of coffee. Total disaster, with the most incompetent and rude restaurant manager I've encountered anywhere on my travels around the world.

After starting my omelet, barely a sip of coffee, I had to dash to the ladies.  Left the paperwork I was working on - notes for an article, in fact - pen, etc, on the table beside my plate.  Returned within two minutes to find a barren table.  My notes were soaked, sitting in the water covering a sopping wet table.  The waitress immediately left the people she'd just served to explain the busboy cleared the table while she was getting the other party's order.  She offered to have them remake the meal (of course, that's the best a waitress could do without authority).  Not acceptable for various reasons.  She offered - and brought - the manager.

The manager, Desa, kept repeating "I apologize, I apologize," said they were remaking the order - a smaller, one-egg omelet since I had started eating my meal.  But that was clearly inadequate as I explained my circumstances.  Well, you cannot take eggs on the road when there's no fridge, and no way to reheat them!  She had the gall to argue with me.  Finally, she asked what I expected her to do.

Any decent restaurant manager promptly offers to comp the meal if it is not possible to remake it & remain to eat it.  A really top-notch manager also gives a coupon for some freebie, if only to ensure that customer is retained (and does not fuss in front of other customers in a busy restaurant!)  Desa objected to my suggestion that she comp the meal and continued arguing that the kitchen staff had already started making a replacement meal in the form of a mini-omelet.

If kitchen staff had actually started making a replacement order, it would have been ready before Desa finished arguing.  Desa finally agreed to comp the meal, brought me a cup of coffee, and the BILL for a cup of coffee!  I won't call her the B-word, just a rude and incompetent idiot.

I have additional evidence of her failures to competently manage and oversee staff, maintenance of ladies' room, etc.  I had to ask her for a napkin - she failed to bring one with the coffee, and the mug sloshed.  Let's move on.

Now we'll see if Denny's website responds to my email complaint form and does anything about it.  Kentucky Fried Chicken blew it entirely.  Never responded to me.  I did return to that outlet about 2 weeks later to see if they had made any changes in response, but nothing changed there - if anything, the situation continued to deteriorate.  KFC worldwide has been crossed off my list of possible places to grab a bite to eat, at home or on the road.  Phooey, the KFC in Bangkok was a rather nice reprieve from fiery Thai food.  But I won't risk it - KFC is going downhill.

So now we see if Denny's pays any more attention to their website and email than KFC does.  Meanwhile, trips to Denny's are on hold.  You cannot count on them to deliver.  If they respond, I'll keep you posted. 

So which restaurant chains have you crossed off your list of formerly 'safe' and familiar homes away from home?

My your road rise to meet you!
Ann

Another Foodie Find on the Road

Seek out little local eateries when you're on the road.  You can stumble upon some great finds in unexpected places!  This time it's in the Atlantic City area.

Route 30 from Garden State Parkway to Atlantic City is Motel Row - oodles of more modest motels than the glitz and glamour of high-rise casinos.  But here sits one of 6 family-owned sub shops in the Atlantic City vicinity.  Sounds pedestrian - but far from it!  Best sub or sandwich I've ever eaten anywhere in the world.

Sack O' Subs started back in 1947.  The Sacco Family, originally butchers, still butcher their own beef for delicious steak & cheese subs, and grind their own beef for hamburgers, meatballs and Italian sausage (the family recipe has been handed down for over 100 years).  They bake their own baguettes for the subs, bake their own rolls for the burgers and sandwiches.  "Foot-long subs?"  Bah, humbug!  These homemade baguettes run about 18 inches long, so a half-sub - very generously filled - actually will satisfy 2 for lunch.

Yes, they are in those glitzy hotels, too, both Bally's and Harrah's.  And they ship next-day priority overnight in insulated shipping containers anywhere in the US.  Yes, they do get orders from Hawaii, about as far cross-country as you can get.  I'm told a California computer mogul - transplanted South Jersy-ite - regularly orders 100 subs shipped to the California company for employee lunch parties.

Sack O'Subs, 784 White Horse Pike (Route 30), Absecon, NJ; www.sackosubs.com.  Locations in Ventnor and Ocean City, in addition to Bally's and Harrah's Casinos' food courts in Atlantic City.

The best pizza I found over 1,300 miles from the Pizza Capital of the World: Mike's Stone-Baked Pizza in Tallahassee, Florida.  I found the best Hong Kong Noodles in Singapore, and the best Singapore Noodles in Hong Kong (Foreign Correspondents Club, so unless you're a member or guest of one, you won't get any of those - sorry for your loss).  There's just no telling where you're going to find the "best" whatever - it could turn up wherever.

May your road rise up to meet you (with good food!),

Best, Ann

On the Road Again - Despite Bad Weather!

"On the road again. . . just can't wait to get on the road again. . ."  Back at it once more, living out of a suitcase.  Alas, the weather is not cooperating to accomplish all I aimed to do.

What to do when weather interferes?  Have a back up plan - and a too-long To Do List.  Time to tackle chores: cleaned out a backlog of nearly 1,000 emails (oops!), used the hotel's granite desktop to shoot some studio-style staged photos (instead of photographing a gloomy, gusty beach), and more backlisted To-Do's.

Read another novel by Kelsey A. Campbell.  She must be a fellow Road Warrior-ess!  Topsy-Turvy: Kalimantan Tales is set in Indonesia - the "jungles of Borneo" actually - where Kelsey used to live.  It's the story of the only working expat woman based in a hardship post in Indonesia.  The name of the city (if you can call a place with 300,000 people and one traffic signal a "city") is Balikpapan, and in Bahasa Indonesia, that means "topsy-turvy."  We Road Warrior-esses think we have it tough today.  Dr. Diane Cameron, heroine of this story, thinks she's joining her fiance in romantic, photogenic Bali and winds up where water has to be boiled a full fifteen minutes before you can drink it, or make a cup of instant coffee.  Fascinating tales of life in the back of beyond, where members of the resentful Bored Wives Club are spitting king cobras and coworkers sometimes prove to be kraits-in-the-bamboo.

Like the first novel of Kelsey's that I read, Make Me Beautiful (with some scenes set in one of my favorite hotels in the world, The Library Hotel in NYC), it's a fascinating tale of a powerful woman who roams the world.

So despite uncooperative weather, I'm getting a lot of things done.  As one of the characters in Topsy-Turvy says, "I never let nothing stand in my way."

May your road rise up to meet you!

Best, Ann