Language in this page is very mixed – English and Swedish
- 1 Sammanfattning
- 2 1) Dubbelbeskattningsavtal
- 3 2) Sverige: från Skatteverkets perspektiv
- 4 3) US of A: från IRS’ perspektiv
- 4.0.1 How do I claim the Foreign Tax Credit?
- 4.0.2 How do I claim the Foreign Earned Income Exclusion?
- 4.0.3 How much is the Foreign Earned Income Exclusion?
- 4.0.4 If I make under the foreign earned income exclusion amount, do I need to file a tax return?
- 4.1 Social Security Taxation, Living Abroad
- 5 25 Things You Need to Know About US Expat Taxes
- 5.1 1. Do Expats File US Taxes?
- 5.2 2. Most American Expats Do Not Owe US Taxes
- 5.3 3. You Can Reduce or Eliminate US Taxes for Expats with the Foreign Earned Income Exclusion
- 5.4 4. The Foreign Earned Income Exclusion Isn’t Automatic
- 5.5 5. You Must Pass a Residency Test to Use the Foreign Earned Income Exclusion
- 5.6 6. You Should Track Travel Time Carefully to Ensure You Qualify as an Expat
- 5.7 7. You Can File For an Extension if You Need More Time to Qualify
- 5.8 8. The Foreign Tax Credit is Another Way to Lower Your US Expat Taxes
- 5.9 9. Excluded Income Can’t Be Offset With the Foreign Tax Credit
- 5.10 10. Tax Treaties Help Prevent Double Taxation for US Expats
- 5.11 11. Dependent Children on Your US Tax Return May Help Reduce Your Expat Taxes
- 5.12 12. Including Children on Your US Expatriate Tax Return Has Long-Term Implications
- 5.13 13. Expats Receive an Automatic Tax Filing Extension Until June 15th
- 5.14 14. Some States Require You to File a State Tax Return While Living Abroad
- 5.15 15. You Must File an FBAR if Your Foreign Account Balances Exceed the Reporting Threshold
- 5.16 16. The FBAR Deadline Falls on Tax Day
- 5.17 17. You May Need to File FATCA Form 8938
- 5.18 18. You Can Still Receive Social Security Benefits When You Retire Abroad
- 5.19 19. Your Social Security Benefits May Be Taxable in the US
- 5.20 20. Totalization Agreements Determine Which Country You Pay Social Security Taxes To
- 5.21 21. Income Earned in the US by Expats is Not Automatically Excluded From Taxation
- 5.22 22. Rental Income Must be Reported on Your US Tax Return
- 5.23 23. Renouncing Citizenship May Not Help You Avoid US Taxes
- 5.24 24. You Can Amend a Previous US Tax Return if You Made a Mistake
- 5.25 25. You Can Get Caught Up With Your US Expat Taxes and FBAR Forms Without Penalties
- 5.26 Next Steps for Your US Taxes for Expats
Med tanke på att vara skriven i Sverige
- I Sverige är alla siffror per person, ingen sambeskattning där inte. Skadar inte a påminnas om.
- Räkna med att betala skatt i Sverige,
- Kommunalskatt (ex., Trosa, 2022, i storleksordningen 32.7%), på ersättning PER PERSON
- Statlig inkomstskatt på belopp över “skiktgränsen”, för inkomståret 2022 är skiktgränsen 540 700 kr, PER PERSON
- Om skatt – av ‘vilken som helst anledning’ – också avkrävs av annat land (t.ex. US,) så skall man får avräkna dylik, grundpoängen med Dubbelbeskattningsavtal. Så, t.ex.
- MÅSTE BETALA skatt på också US S.S. i Sverige, säg 33% (kommunalskatt)
- US också kräver betalar skatt, säg 15%
- Grovt räknat
- 15% till USA
- 18% till Sverige (33-15% “redan” betalt i USA)
- 33% tot
- I realiteten, way more complex, I assume
ENDAST ETT ANTAGNDE, MÅSTE VERIFIERA OM detta kan stämma:
|IRS, US of A||Skattemyndigheten, SE|
|1a. US. SS Person #1, gross||$ 2000/mo, $ 24 000/yr||57%||240 000 sek|
|skatt i Sverige, t.ex. 33% kommunal||79 200 sek|
|avräkna från redan bet i USA||(57% på $ 6 300)|
|1b. US SS Person #2, gross||$ 1500/mo, $ 18 000/yr||43%||180 000 sek|
|skatt i Sverige, t.ex. 33% kommunal||33%||59 400 sek|
|avräkna från redan bet i USA||(43% på $ 6 300)|
|1 Gross Income, Joint Filing||$42 000/yr||100%||(icke applicerbart) [420 000 sek]|
|2. Federal Tax, e.g. 15%||$ 6 300/yr|
|3. Net out||$ 35 700/yr|
… “Länderna har därför i allmänhet bilateralt – mellan två länder – tecknat skatteavtal där det avgörs vilket av länderna som i en viss situation har rätt att ta ut skatten. Dessa regler kan utformas på i princip två olika sätt.
EXEMPT ELLER CREDIT
Antingen har länderna kommit överens i skatteavtalet om att bara ett av länderna har rätt att ta ut skatt på viss inkomst. Då blir den inkomsten enligt skatteavtalet undantagen från skatt i det andra landet. Denna metod kallas för exempt-metoden. Den interna rätten i det andra landet kan dock fortfarande föreskriva att det ska ta ut skatt. Eller så har de två länderna kommit överens om att båda länderna har rätt att ta ut skatt men att det ena landet ska minska sin skatt med den skatt på den aktuella inkomsten som du har betalat i det andra landet. Denna metod kallas för credit-metoden.”
|länderna kommit överens i skatteavtalet om att bara ett av länderna har rätt att ta ut skatt på viss inkomst.||de två länderna kommit överens om att båda länderna har rätt att ta ut skatt men att det ena landet ska minska sin skatt med den skatt på den aktuella inkomsten som du har betalat i det andra landet.
|Skatt där man är SKRIVEN||Ja, enligt lokala regler för landet.||Ja, “SKATT-SKRIVEN” = landets regler MINUS “SKATT-UTLAND”|
|“Andra” landet, “UTLAND”||Nej, 0%. Åtminstone per dubbelbeskt.avt.
“Den interna rätten i det andra landet kan dock fortfarande föreskriva att det ska ta ut skatt.”
|Ja, “SKATT-UTLAND” = landets regler.
2) Sverige: från Skatteverkets perspektiv
- Beskattning av pension
- “Pension kan betalas ut på grund av en socialförsäkringslagstiftning, en anställning eller från ett privat pensionssparande. Utbetalningarna kan komma från Sverige eller utlandet. En pensionsinkomst beskattas i inkomstslaget tjänst.”
- Vilka skatter ska betalas?
- Kommunalskatt, t.ex. Trosa Kommun, 2022, trosa.se/ekonomi/Aktuell-skattesats/:
- Skatt till kommunen 21,60
- Skatt till regionen 10,83
- Summa skatt 32,43
- Kyrkoavgift 0,97 – endast om medlem i Svenska Kyrkan
- Begravningsavgift 0,253
- DVS, skattesats (2022) = 32,683%, 32,43% (#3) + 0,253% (#5), avrundat till 32.7%.
- Statlig inkomstskatt på belopp över “skiktgränsen”
- För inkomståret 2022 är skiktgränsen 540 700 kr
- Kommunalskatt, t.ex. Trosa Kommun, 2022, trosa.se/ekonomi/Aktuell-skattesats/:
- Om skriven i Sverige så kommer man att beskattas i Sverige på i princip alla inkomster (grundregel)
- Pension, oavsett varifrån kommer, beskattas som Tjänst.
- SS, och andra amerikanska utbetalningar kommer att ha skattesats runt 30%###
3) US of A: från IRS’ perspektiv
- Planera att ALLTID, FOREVER, måsta deklarera i USA, till IRS
- Eftersom vi will ha Social Security från USA
- Inklusive måsta betala skatt i USA på denna. Minst.
- Men ta hänsyn, vid deklaration, och planerande, uttag, … till:
Man är skattskyldig i USA om man är amerikansk medborgare eller har uppehållstillstånd i USA, även om man inte bor där. Det är en skillnad från de flesta andra länder där du bara är skattskyldig om du är stadigvarande bosatt i landet.
Do Americans have to pay foreign income tax while working overseas? It’s a common question, and if you’re one of the millions of U.S. citizens who earns money abroad (or are planning to), you should know two things:
- In general, yes—Americans must pay U.S. taxes on foreign income. The U.S. is one of only two countries in the world where taxes are based on citizenship, not place of residency. If you’re considered a U.S. citizen or U.S. permanent resident, you pay income tax regardless where the income was earned.
- While there is no overarching tax exemption for U.S. citizens abroad, the IRS has created a few tools like the foreign earned income exclusion and foreign tax credit that can lower your foreign income tax obligation.
A question we commonly get is, “how much foreign income is tax-free?” No foreign income is tax-free, but there are mechanisms in place to help prevent you from paying too much or paying taxes twice on the same income—the Foreign Earned Income Exclusion (FEIE), and the Foreign Tax Credit (FTC). They both work to reduce your U.S. taxes on foreign income, one by excluding the income earned overseas from your taxes and one by giving you a dollar-for-dollar credit on taxes you’ve already paid to your host country.
If you want to take advantage of the Foreign Income Exclusion or Tax Credit, you need to choose between claiming the FEIE and the FTC wisely. Not doing so can lead to unpleasant surprises in future tax filings.
How do I claim the Foreign Tax Credit?
The Foreign Tax Credit works like this: Say you are working in a country that has a vague tax treaty with the U.S. As a result, you end up paying taxes directly to that country. With the Foreign Tax Credit, you can show the U.S. how much money you paid in taxes to that foreign country and receive a credit for every dollar you owe, so you don’t have pay taxes for that same income again on your U.S. tax filing.
If you qualify, you claim the Foreign Tax Credit by filing Form 1116.
How do I claim the Foreign Earned Income Exclusion?
The Foreign Earned Income Exclusion is the most common tool expats use to avoid double taxation on income earned overseas. Even so, there’s still some confusion on how it actually works—it’s not automatic, for example. First, you must spend a certain number of days outside the U.S. per year and prove your ties to your new country. You’ll also need to file a U.S. tax return, and you can only claim the exclusion if you file Form 2555 with your return—even if all of your foreign earned income is excludible.
How much is the Foreign Earned Income Exclusion?
The maximum foreign earned income exclusion amount is updated every year. For the 2021 tax year you can exclude up to $108,700 or even more if you incurred housing costs. (Exclusion is adjusted annually for inflation). For your 2022 tax filing, the maximum exclusion is $112,000 of foreign earned income. Married? The exclusion applies to each of you separately, so you each may qualify for the maximum amount unless only one of you works.
Something to note is that the exclusion does not apply to passive income such as interest and dividends.
If I make under the foreign earned income exclusion amount, do I need to file a tax return?
Whether working abroad or in the U.S., you must file a U.S. tax return if you meet the filing threshold which is generally equivalent to the standard deduction for your applicable filing status.
Here’s how to retire abroad — without any tax surprises
PUBLISHED SAT, APR 21 201810:15 AM EDTUPDATED TUE, APR 24 20181:25 PM EDT
HOW DOES LIVING ABROAD MITIGATE YOUR US TAX?
If you qualify as an American citizen residing abroad (basically having lived at least one year abroad), there are two methods by which you can reduce your US tax by a substantial amount. These are the “Foreign Earned Income Exclusion (FEIE)” and the “Foreign Tax Credit.” You can use either or both of these methods as will be explained below.
However, neither of these methods excuses you from filing if your income was above the filing threshold.
The Foreign Earned Income Exclusion (FEIE, using IRS Form 2555) allows you to exclude a certain amount of your FOREIGN EARNED income from US tax. For tax year 2021 (filing in 2022) the exclusion amount is $108,700. What this means is that if, for example, you earned $113,000 in 2021, you can subtract $108,700 from that leaving $4,300 as taxable by the US. But beware: this $4,300 is taxable at tax rates applying to $113,000 (known as the “stacking rule”). The exclusion applies only to foreign earned income. Other income, such as pensions, interest, dividends, capital gains, US-sourced income, etc., cannot be excluded with the FEIE. You are liable for full US tax on these types of income.
Here’s a simple example. Suppose you live in France and you earned €100,000 (about $113,000) from your French employer. You are married filing jointly, have two children and you take the standard deduction ($25,100) and child tax credit ($4,000 for two children).
Social Security Taxation, Living Abroad
Denna sida inbegriper skattehänsyn till S.S.
Allt annat, generellt och mer specifika detaljer, samlas i en annan sida, huvudartikeln om Social Security SS, jandp.biz/inv/finplan/us/social-security/
‘1’ U.S. Persons
VI kommer att ses som “U.S. Persons” eftersom
- “citizens of the United States”
- “regardless of where you live.”
Extrakt från ssa.gov/international/AlienTax_reference_2.html:
IRS’s definition of U.S. persons includes citizens of the United States and aliens who meet the tax definition of U.S. resident alien. Generally, if you are a U.S. person, you are subject to U.S. income tax filing requirements and your worldwide income is subject to U.S. income tax, regardless of where you live.
SSA will not withhold tax from your benefits if you are a U.S. person. If you find that you do have to pay taxes on your Social Security benefits, you can make quarterly estimated tax payments to the IRS or choose to have federal taxes withheld from your benefits.
‘2’ Foreign Persons
Just FYI, extrakt från ssa.gov/international/AlienTax_reference_2.html:
If IRS considers you to be a foreign person (or nonresident alien) for tax purposes, SSA is required to withhold a 30 percent flat income tax from 85 percent of your Social Security retirement, survivors, or disability benefits.
25 Things You Need to Know About US Expat Taxes
June 21, 2022, retrieved ###
|Sifting through and understanding the US tax code can be a daunting task. And when you’re a US expat, the information is even more complex and confusing. This is because:
To help clear up these complex requirements, we’ve compiled a list of the top 25 things all expats should keep in mind when filing US expat taxes.
New to filing expat taxes? Get started with the experts at Greenback. Click here to get matched with an accountant to review the unique details of your situation and confirm what you need to file.
|Skillnad på att Deklarera (“File Taxes”) och faktiskt Betala Skatt.
1. Do Expats File US Taxes?
Yes, virtually all US citizens are required to file a US Federal Tax Return regardless of where they live in the world. This applies as long as your worldwide income exceeds the filing threshold (which varies by filing status).
That worldwide income may include:
If you are self-employed, the filing threshold is $400, regardless of filing status.
Even if your income does not exceed the threshold for your filing status, you may still have to file. For example, if you receive certain tax credits or refunds, you will have to file even if you wouldn’t otherwise meet the requirements.
Vi kommer mest troligt att alltid måsta “file taxes”. Oavsett “filing thresholdds” et c, men inget problem. Vi fortsätter helt enkelt som nu med någon deklarationsprogramvara eller deklarationstjänst i USA som automatiskt ta hänsyn till alla detaljer.
2. Most American Expats Do Not Owe US Taxes
While virtually all expats are required to file a US tax return, most American expats do not owe US taxes. The US has put several important deductions, exclusions, and credits in place to ensure Americans living abroad aren’t taxed twice on the same income. Using these tax benefits, many expats can erase their US tax bills entirely.
Most expats are able to offset or erase their foreign earned income with the following:
Don’t pay tax on your income twice! US taxpayers may be eligible to claim the Foreign Tax Credit against income that has already been taxed by their host country.
For the exclusions, you must qualify as an official expat and have foreign earned income, and you must file your tax return in order to prove that you are eligible for these benefits.
Note: Even if you don’t end up owing any taxes, you will still need to file a US tax return.
3. You Can Reduce or Eliminate US Taxes for Expats with the Foreign Earned Income Exclusion
For the 2021 tax year, you may be able to exclude up to $108,700 of foreign earned income from US taxation with the Foreign Earned Income Exclusion! This is the most common way expats reduce or eliminate their US tax liability.
You might also be able to exclude certain housing expenses, such as rent and utilities, using the Foreign Housing Exclusion.
|På inkomster för förtjänats utomlands (“i Sverige”).
EJ applicerbart på US’ S.S., och andra pensionsutbetalning från amerikanska institutioner.
4. The Foreign Earned Income Exclusion Isn’t Automatic
You must qualify to use the Foreign Earned Income Exclusion, but you must also elect it by filing Form 2555 or 2555-EZ.
Once you choose to use the Foreign Earned Income Exclusion, it remains in effect and you will include it on your tax return each year thereafter. However, should you decide that you no longer want to use it, you cannot claim the exclusion for the next five tax years without the approval of the IRS.
|Kommer att hanteras automatiskt av ‘filing SW/service’.
5. You Must Pass a Residency Test to Use the Foreign Earned Income Exclusion
The Physical Presence Test requires that you are physically present inside a foreign country for 330 of any 365-day period.
Under the Bona Fide Residence Test, you must have lived overseas for at least one calendar year and have no immediate intention of moving back to the US – so temporary overseas contractors and those on assignment won’t qualify.
|För att kunna använda FEIE, 330 of 365 “inside a foreign country”
6. You Should Track Travel Time Carefully to Ensure You Qualify as an Expat
If you plan to qualify via the Physical Presence Test, count your travel days carefully. You must be physically present inside a foreign country for 330 full days, so any time you spent traveling in the air (or by sea) to or from the USA won’t count. Keep track of the actual dates of travel.
A small error in calculation could cost you thousands of dollars on your US expat tax return!
wait a sec, det här måste nog finkammas lite mer… hur räknas 330 dagar exakt…
### MÅSTE LETA REDA PÅ VAD FORM, format, IRS ska ha dylika detaljer på….
7. You Can File For an Extension if You Need More Time to Qualify
Many expats move abroad in the latter part of the year and worry that they won’t qualify for the Foreign Earned Income Exclusion and will miss out on substantial tax benefits. If you expect to qualify in the near future, you can apply for an extension until October 15th, or you can file Form 2350, which buys you even more time.
8. The Foreign Tax Credit is Another Way to Lower Your US Expat Taxes
If you live in a high-tax country or your income exceeds the Foreign Earned Income Exclusion, the Foreign Tax Credit may help you offset or eliminate your US tax liability.
The Foreign Tax Credit is a dollar-for-dollar credit on the taxes you pay to a foreign country. You must file Form 1116 to elect it.
Many taxpayers are eligible for both the foreign tax credit and the foreign earned income exclusion; however, if taxpayers can also claim the child tax credit, choosing the foreign tax credit over the exclusion will often yield them better tax savings.
|Denna kommer att bli i allra högsta grad applicerbar! På inkomster vars skatt får användas som kredit enligt IRS’ regler.
9. Excluded Income Can’t Be Offset With the Foreign Tax Credit
If you choose to exclude some of your income with the Foreign Earned Income Exclusion, you can’t use the Foreign Tax Credit on that excluded income.
For example, you exclude $108,700 of your income and have $30,800 leftover. You can only offset the taxes you pay on that remaining income. This prevents “double-dipping” in the eyes of the IRS!
If you find that you were not able to claim the full amount of foreign income taxes you paid or accrued, you can carry these over for the next 10 years, and even carry them back to the previous year.
10. Tax Treaties Help Prevent Double Taxation for US Expats
Income tax treaties help prevent double taxation for Americans living in foreign countries by reducing or eliminating US taxes for expats on certain types of income. Currently, the US has tax treaties with 69 countries. Because tax breaks vary by country, expats should review the treaty with their host country to find out how they’ll be taxed. Like any legal document, tax treaties can be complex and difficult to understand. If you’re uncertain which rules apply to you, be sure to consult an accountant.
Och, ‘This is the One’
11. Dependent Children on Your US Tax Return May Help Reduce Your Expat Taxes
The Child Tax Credit can be very beneficial for those with dependent US children (citizens or permanent residents)—and can sometimes even result in a refund! In order to qualify for the credit, all dependent children must have a US Social Security number.
In addition, you may be able to deduct child care costs using the Child and Dependent Care Credit. However, you must have earned income to use this credit. If you’ve excluded all of your earned income using the Foreign Earned Income Exclusion, you won’t be able to use the Child Care Credit.
12. Including Children on Your US Expatriate Tax Return Has Long-Term Implications
Children born to a non-US parent overseas may be able to qualify to be reported on your US Federal Tax Return as a dependent. While the Child Tax Credit(s) you’ll receive can be financially advantageous, remember that they are now considered US persons and will forever have a US tax obligation unless they choose to renounce their citizenship once they are an adult.
13. Expats Receive an Automatic Tax Filing Extension Until June 15th
US taxpayers living outside the US on the tax deadline of April 18th, 2022 receive an extension until June 15th to file. However, any US taxes owed are due by April 18th to avoid penalties and interest.
If you move back to the US, you may still be eligible to use certain US expat deductions and exclusions that year, but you’ll need to file by April 18th because you are now a US resident.
14. Some States Require You to File a State Tax Return While Living Abroad
When it comes to whether or not you have to file a state tax return as an expat, one critical component is whether you intend on returning. Every state has differing rules regarding domicile and permanent place of abode, which factor into whether you will be considered a resident and therefore have to file.
For example, Massachusetts states that one “cannot change your domicile by taking a temporary or longer than expected absence from Massachusetts. You must not intend to return.”
Even if you have no intention of returning, many US states continue to tax residents who move away until they “sever ties” with that state. Depending on the state, this can be an easy process, or it can be difficult. Some states make it hard to remove yourself from their tax jurisdiction.
For example, even if you live in another country, a state may impose taxes if:
States that are notorious for taxing former residents include:
Consult a qualified tax professional to learn the rules for your state.
15. You Must File an FBAR if Your Foreign Account Balances Exceed the Reporting Threshold
FinCEN Form 114, also known as the Foreign Bank Account Report (FBAR), is part of the US initiative to thwart tax cheats hiding money abroad. If the aggregate balance(s) of all your foreign bank accounts exceed $10,000, you must file. When considering your foreign bank accounts, pensions and investments may come into play, as well as accounts that you don’t own but have signature authority over.
The FBAR is filed electronically through the BSA e-filing system. Even if the account(s) hit $10,001 for only one day (or one minute!), you must file an FBAR. The FBAR is filed separately from your US expatriate tax return.
Have questions? Get in touch right now and we’ll help get you the answers you need so you can get started right away.
(Niema problema – filing SW/service hanterar detta.)
16. The FBAR Deadline Falls on Tax Day
The FBAR deadline is April 18th (the same as the federal income tax due date), with an automatic extension to October 17th. The FBAR is filed separately from the regular income tax return.
17. You May Need to File FATCA Form 8938
FATCA, Foreign Account Tax Compliance Act, is similar to FBAR in that it is intended to prevent US taxpayers from hiding money in offshore accounts and assets. Should the value of certain financial assets exceed the filing threshold (which varies by filing status and residency), Form 8938 should be filed.
FATCA and FBAR filing requirements are separate but similar. You could be required to file FATCA, FBAR, both, or neither!
18. You Can Still Receive Social Security Benefits When You Retire Abroad
If you are considering retiring abroad, rest assured that you can collect your Social Security benefits in just about any country in which you choose to live. There are only a handful of countries where you typically cannot receive Social Security benefits, namely:
However, even if you live in one of these countries, you can still collect any back-payments owed to you once you move to a different country.
For example, let’s say you moved to Cuba. While living in Cuba, you would not be able to receive US Social Security payments. But if you moved to Costa Rica a few years later, you would be eligible to collect any Social Security payments you were denied during your time in Cuba.
19. Your Social Security Benefits May Be Taxable in the US
You must report your Social Security benefits as income on your US expatriate tax return. Some people will have their benefits taxed while others will not. Generally, if you have other income, your benefits will be taxed. However, if you live in certain countries, your Social Security payments may not be taxed by the US. This includes:
The rules for these countries vary. Consult an expat tax specialist to learn more.
Note: Even if your Social Security benefits are taxed, only 85% of the full amount can be considered taxable income.
|Okey ### denna skall ju redas ut i detalj, exakt hur kommer det att fungera från IRS/US perspektiv, från Skatteverket/SE perspektiv.|
20. Totalization Agreements Determine Which Country You Pay Social Security Taxes To
The US has agreements with 28 countries that outline which country should receive your Social Security payments. The agreements generally allow for the credits you earn in one country to be usable for the calculation of benefits in the other. This is an important point as, without such an agreement, you could be forced to pay into two systems—and only receive one benefit!
Not: detta är medans man arbetar och de social security (6.20%, 2022) och medicare (1.45%) skatter man betalar in då. Alltså:
FICA = Federal Insurance Contribution Act
21. Income Earned in the US by Expats is Not Automatically Excluded From Taxation
Income earned on US soil is not foreign earned income and therefore cannot be excluded from US taxes with the Foreign Earned Income Exclusion.
However, if you are required to pay taxes on that income to another country, you may be able to use the Foreign Tax Credit as a dollar-for-dollar credit to offset the US taxes you owe.
22. Rental Income Must be Reported on Your US Tax Return
You must report all rental income (foreign and domestic) to the IRS. However, many expenses related to the property can offset expatriate tax liability.
Repairs to your property are immediately deductible but improvements take a bit longer. How do you know the difference? Repairs restore the property to its original state, but improvements increase the value of the property or prolong its life.
While they differ, you’ll want to keep track of expenses for both repairs and improvements to your rental property. Repairs can be taken as deductions, and improvements will factor into how you calculate capital gains or losses on your expat taxes after you sell your property.
23. Renouncing Citizenship May Not Help You Avoid US Taxes
While frustrated expats consider renouncing their citizenship to avoid the burden of filing US taxes, before they can do so, they must prove that they have complied with their US tax requirements for at least 5 years prior to the date of renunciation.
If you are considering this option, please note that depending on your income and net worth, you may be subject to an exit tax when you renounce. It’s the IRS’ way of making sure you don’t renounce just to skip out on a tax debt!
“Last thing I remember, I was
24. You Can Amend a Previous US Tax Return if You Made a Mistake
Mistakes happen. If you find that you have failed to report some income on your return, or if you didn’t take all the deductions allowed, you will need to file an amended return for that tax year using form 1040-X.
Filing an amendment before the IRS catches the mistake is the best option, as penalties are often less. Once the original return has been filed, the clock starts ticking, and amended returns will generally need to be filed before a certain date to seek a credit or refund.
What? Mistakes? We don’t do freakin’ Misstakess!
25. You Can Get Caught Up With Your US Expat Taxes and FBAR Forms Without Penalties
Many expats discover that years after they have moved abroad, they had a US filing requirement all along. They may fear harsh penalties and be hesitant to get caught up on delinquent returns.
Fortunately, the IRS provides an amnesty program to help expats come into compliance without facing any penalties. It’s known as the Streamlined Filing Compliance Procedures.
To use this program, all you have to do is:
In most cases, this will bring you into compliance with IRS regulations. It’s the perfect program for expats who were previously unaware of their US tax filing obligations.
(Though the Streamlined Filing Compliance Procedures are also an excellent option for Americans living in the US.)
kanske nått att verifiera… om missat nått och kan då “catch up”
Next Steps for Your US Taxes for Expats
Now that you’re up to speed on the top 25 things to know about expat taxes, consider the next steps based on your tax situation.
1. File a US Expat Tax Return Every Year
First, make a plan to file your US Federal Tax Return every year. Skipping filing is never a good idea. It puts you at risk of audits, expensive penalties, and further IRS action. If you’re unsure how to navigate filing on your own or don’t feel you have enough time to do it right, find an expat tax accountant you can trust and delegate tax prep to them.
2. Make a Plan to Meet All Your Filing Requirements
Next, outline your other filing requirements so you can meet them as well. Common requirements include filing the FBAR to report foreign bank accountants, filing a State Tax Return if required for you, or filing a tax return for your business.
Greenback offers a variety of services to make sure your tax preparation is a hassle-free experience, no matter what you need to file.
3. Get Caught Up on Your Expat Taxes ASAP (If Necessary)
If you’re behind on your expat taxes, make arrangements to get caught up as soon as possible.
If you’re only one or two years behind, file late expat tax returns ASAP to get back on track. If you’re several years behind, you can use the Streamlined Filing Procedures to catch up penalty-free.
4. Stay Organized to Make Your Taxes Easier
Once you know the requirements, filing expat taxes is significantly easier. However, you might still find it challenging to gather your expat tax documents every year.
To make the process faster and easier, keep track of important documents throughout the year. That way, when it’s time to file, you’ll have everything you need!
Have Questions? Not Sure What to Do Next? Get Help Early!
We hope this guide has helped you understand the tax rules and requirements for US expats. However, taxes for expats are nothing if not complicated.
If you still have questions, just reach out to us. We’ll be happy to give you the answers you need. In fact, we can even prepare and file your expat tax return on your behalf.
At Greenback Expat Tax Services, we’ve spent years helping expats optimize their financial strategies and file their taxes accurately and on time. We’d love to help you too. US expat taxes may not be simple, but they don’t have to be a headache. We can make the process hassle-free.
Don’t wait, either! If you’re unsure of your expat tax needs, putting off the process only increases the risk of added costs and unnecessary frustration.
Ready to file your expat taxes? Get started now to meet your accountant and start filing today.