US Expats Tax-hell Commences

Monday was Tax Day for residents in the US and most "US persons" trapped in the US Tax Net.  But for Americans Abroad, expats' own tax-hell is about to begin.  June 15th is the deadline for filing US income tax returns for non-residents caught in the US tax net.  Worse, June 30th is deadline for RECEIPT (not mailing!) of the dread FBAR and Form 8938.

Time to get your financial records in order and get going on your filing requirements so you can meet these deadlines.

Remember!  It's not just US citizens who are subject to US tax laws.  IRS defines "US persons" more broadly than any other country in world stretches their tax boundaries.  Legal permanent residents, even if they are outside the US, are still subject to US tax laws.  So are a host of others.  If you have any US income or any kind of US connection, beware!  Make double-sure you're not trapped.

Many foreigners delivered their babies in the US, thinking they were giving the "gift" of US citizenship to their offspring.  For example, it was quite popular in the 1990's for Koreans in an attempt to keep sons out of Korea's military service requirements.  Backfire!  All these kids, who have been living back in their and their parents' countries since infancy or childhood, now are be hunted down by IRS for their income tax payments.  Failure to file and failure to pay, as required, are both felonies.  With FBAR and Form 8938, penalties are downright draconian.

Exercise extreme caution!  If you are a US citizen residing outside US, or if you have other ties to US which might trap you in the net, make sure you verify whether you have to file, what you have to file, and get it done on time!

May your road rise to meet you,
Ann

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