Reviews 4,000+ Verified REVIEWS
About Us
Read more articles
Overview
Featured reads
26 August 2022

When Is the Best Time to File Taxes?

Read More
10 August 2022

New Compliance Campaign - IRS Going after Non-US Trusts

Read More
29 July 2022

IRS Form 7203

Read More
Services
Join live webinar Services Offered
Overview
Pricing plans
Compare all plans
Pricing
Tax Guide
Join live webinar Services Offered
Contact
WhatsApp
Search
About Us
Featured reads
26 August 2022

When Is the Best Time to File Taxes?

Read More
10 August 2022

New Compliance Campaign - IRS Going after Non-US Trusts

Read More
29 July 2022

IRS Form 7203

Read More
Read more articles
Services
Pricing plans
Compare all plans
Pricing
Tax Guide
Articles
When Is the Best Time to File Taxes?

Like most people, you may wonder when is the best time to file taxes. The answer depends on your s...
Aug 26, 2022

New Compliance Campaign - IRS Going after Non-US Trusts

Non-US Trusts Become New IRS Target  Source: ...
Aug 10, 2022

IRS Form 7203

Are you curious about IRS Form 7203? This form is used by S corporation shareholders to ...
Jul 29, 2022

Webinar: Pensions and Other Retirement Accounts Outside of the U.S. Recording and Q&A Transcript

On July 19, 2022, we hosted a webinar on Pensions and Other Retirement Account...
Jul 20, 2022

Non-US Trusts Remain IRS Target

IRS compliance campaign In 2018, the IRS announced a ...
Jul 11, 2022

Streamlined Procedure: Which Years to File?

Which years to file? If you are behind on your tax returns ...
Jun 16, 2022

IRS Identity Protection PIN

When people talk about identity theft, they usually mean stolen personal information, cr...
Jun 07, 2022

CP2100 and 2100A Notices: When Payers Need To Correct Backup Withholding Errors

Banks, credit unions, corporations, and payers who filed returns that did not match IRS data recei...
Jun 03, 2022

Webinar: How to Avoid Being Double Taxed as an Expat. Recording and Q&A Transcript

On June 1, 2022, we hosted a webinar on how to avoid being double taxed as a U. S. expat which inc...
Jun 02, 2022

A Tax Guide for Italian Expats in the United States

It is not an understatement to say that American culture and history have been heavily influenced ...
May 27, 2022

What to Do After Getting A Letter From the IRS

Every year, the IRS sends out millions of notices to taxpayers. These letters are sent f...
May 06, 2022

Military Tax Deductions Available to Active Members of the US Military

Life as an active member of the United States Armed Forces can be as challenging as it i...
May 05, 2022

All articles
IRS 101
How to Obtain a Copy of Past Returns

Prior year transcripts - who to call, which forms to fill out, etc.
How IRS Can Find You Abroad

A common misunderstanding is that US citizens abroad do not have to file tax returns
Expatriate Tax Audits

Audits are no fun, especially when the documents are not standard US tax forms; TFX can help
Tax Penalties & Interest

How the IRS computes tax, interest, and other penalties & what you can do to avoid them
Received IRS Notice?

Scary IRS letters? We will help you debunk them and form an action plan to fix any issues
Can You E-file US Tax Return from Abroad

TFX is an authorized e-file firm and e-files tax returns for taxpayers globally
How to Pay IRS Electronically From Abroad

If you do have a tax bill, what are the ways you can pay the IRS?
How to File an Amended Return

We can amend prior filed returns to ensure you get the deductions & credits you are eligible for
IRS Mailing Addresses

In cases where E-filing is not permitted (IRS rules), we outline where and how to snail mail the returns
Can Overseas Americans Get an IRS Refund?

Short answer: Yes. Long answer: Certainly, but your tax return needs to be optimized.
IRS Statute of Limitations

The IRS can’t chase you forever; we break down the rules behind the IRS statute of limitations
ITIN Q&A

What are ITINs, who needs one, how to get one, and when they expire
All IRS 101
Tax musings
Financial Planning

Expat Tax Rules

FBAR/FATCA

News

Investments

Non-US Citizens

Retirement

Real Estate

Foreign Business

Immigration

Expatriation

Family Matters

Tax Saving Strategies

Mail Bag

Recently Published

Recently Published Articles
Foreign Nationals

All Tax Musings
Tax concepts
Glossary of Tax Terms

Expatriate tax glossary. Commonly used terms explained
Definition of US Tax Person

More complicated than it sounds. How ‘US Person’ is defined by the IRS and what it means to you
Resident & Non-Resident Aliens

“Resident” can have many different meanings for the IRS.
Foreign Bank Account Report: FBAR

FinCEN Form 114 and filing requirements explained. Who needs to file, when, and why?
Form 8938 (FATCA)

Filing requirements, penalties, and other considerations
FBAR vs Form 8938

Financial reporting requirements explained
Foreign Retirement Accounts

How is your nest egg treated by the IRS? It depends on the country and the plan
Foreign Income Exclusion (FEIE)

Save over $100,000 on your US tax return with this nifty exlcusion. But, it’s complicated
Foreign Tax Credit (FTC)

How to avoid double taxation
Physical Presence Test

One of two ways to meet the Foreign Earned Income Exclusion (FEIE)
Bona Fide Residence Test

Second method to meet the Foreign Earned Income Exclusion (FEIE)
Partial Year Exclusion

Moving overseas (inbound or outbound) midyear is not uncommon
All Tax Concepts
Expat tax 101
Why File

It’s the law. But, outside of legal reasons, many taxpayers may also benefit from refunds
Expat Tax Deadlines & Due Dates

There are many different deadlines & possible extensions - TFX can keep you abreast.
Minimum Filing Requirements

What are the minimum thresholds that trigger tax filing requirements?
Tax Documents Required

Which documents you may require in getting caught up to date on your tax returns
Do Expats File State Taxes?

It depends. State taxes are one of the most misunderstood aspects of expat tax.
Common Tax Forms

Thousands of tax forms exist, but which select few you really need to understand
Dependents & Exemptions

How to understand these two terms & use them to your advantage to obtain tax refunds
Foreign Spouse Tax Implications

How to understand these two terms & use them to your advantage to obtain tax refunds
Totalization Agreements

Why these complex terms can mean a lot to self-employed individuals & digital nomads
Green Card Holders

US tax filing requirements & credits specific to permanent residents
Surrendering Citizenship or Green Card

Big life choice that also carries hidden tax implications & filing requirements
Social Security Survivor Benefits

Will Your Non-US Spouse be Able to Receive Survivor, Dependent, or Spousal Benefits?
All Expat Tax 101
Who we help
Americans Working Abroad

US Citizens & Green Card holders who are living and working outside the US
American Educators Abroad

TFX has partnerships with many international schools to assist their staff with tax filings
American Contractors Overseas

Contractor taxes contain many nuances, especially for potential state tax filing requirements
Employees of International Organizations

Aid workers (& other staff) of the UN, EC, WHO or WB have many tax advantages and tax complexities
Pilots

Thx for keeping us safe in the sky! International pilot taxes are *almost* as complex as flying a jet
Military

Working in war zones or stationed abroad, TFX can help understand filing requirements
Digital Nomads

Global citizens who earn a living without a permanent establishment
Retirees Abroad

TFX files returns for American retirees globally & ensures their nest eggs are protected
Small Business Owners

We support entrepreneurs globally & explain how to make the most of your hard-earned earnings
Green Card Holders

Permanent residency has tax implications - we explain what you need to know
Accidental Americans

Born with a U.S. citizenship but never filed tax returns? TFX can help.
Dual Citizens with US passports

Multiple citizenship is in vogue! TFX explains your U.S. tax filing requirements
All Who We Help
Tax guides
Form 1040NR - Nonresident Alien Tax Return

Non-US Citizens and Green Card Holders who have U.S income and require filing tax returns.
Form 5471

Non-US corporations owned by US Citizens and Green Card holders. Complex form debunked.
Tax Guides for 79 Countries

How do local country income, investments, taxes translate to U.S tax returns? Country specific guides.
U.S Tax Guide for Retirees

Retirees abroad enjoy sunshine & tax advantages. Our guide explains how to plan accordingly.
US Tax Guide for Digital Nomads

Remote work is booming and so is the nomad lifestyle; understanding tax implications is a must
US Expat Tax Guide 2022

What do US expats abroad need to know for 2020? TFX annual guide explains due dates & more.
U.S. Contractor Abroad Tax Guide

Contractors (especially military) have different tax treatment than normal employed expats
PFIC - Form 8621

Non-US mutual fund investments may carry onerous tax implications
FBAR (FinCEN 114) & 8938 (FATCA) comparison

Financial reporting forms - similarities, differences, due dates, and more
U.S. Missionary Tax Guide

Missionary tax treatment will vary based on country & presence of social security agreements
Tax Reform 2017

Tax reform that reshaped much of the tax code: winners, losers, and business implications
IRS Estimated Payments Guide

The IRS expects certain taxpayers to make payments before the deadline - learn how and why
All Tax Guides
Contact

TFX Mobile app

TFX app on App Store TFX app on Google play

Phone

Contacts

Message us on WhatsApp
Join live webinar Services Offered

US Tax Guide 2022

US Tax Guide 2022
April 15
April 15

Due date to file calendar year 2021 tax returns (if you live in the US)

Interest on tax due (if any) begins to accrue, even if you have an extension until June or October.

FBAR due Apr 15. Automatic extension granted until Oct 15.

June 15
June 15

US expats receive an automatic extension to file their US taxes to June 15. As noted above – tax due, if any, must be paid by April 15. Last day to file an extension to delay filing until Oct 15.

Oct 15
Oct 15

Filing date for those who have processed an extension

Who must file Tax Returns?

All US Citizens & GC holders must file tax returns annually if above minimum filing thresholds.

You must report your worldwide income. If spouse is not a GC holder/US citizen - you do not need to report their income.

Minimum Filing Thresholds

Filing Status Age Minimum Income Requirement
Single
Under 65
65 or older
>$12,200
$13,850
Married Filing Separately Any age $5
Head of Household
Under 65
65 or older
$18,350
$20,000
Married Filing Jointly
Under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses)
$24,400
$25,700
$27,000
Qualifying Widow(er) with Dependent Children
Under 65
65 or older
$24,400
$25,700
Self-Employment
Any
$400

FBAR

  • 'Foreign Bank Account Report' (FBAR) – aka FinCEN 114
  • Not a declaration of tax, but an informational return
  • Required if your aggregate non-US financial accounts total over $10K USD at any point during the year:
    • Examples:
      Checking account, savings account, non-US brokerage account, non-US mutual fund, non-US life insurance with cash value
    • If you have 3k each in 4 bank accounts, the aggregate value is $12k – you must file.
  • Very high penalties if not filed
    • Maximum penalty for failure to file FBAR is either $100K or 50% of taxpayer assets – whichever is larger

Take all of your non-US checking, savings, investment, and pension accounts* & find the highest one day value for each & add them up. If the total is above $10k - you must file FBAR.

FATCA

  • FATCA - Foreign Account Tax Compliance Act
  • Informational report, but part of tax return - Form 8938
  • Required to file:
    • Single - $200k at the end of the year, or $300k at any point during the year
    • Married Filing Jointly - $400k at the end of the year, or $600k at any point during the year
  • Very high penalties if not filed
    • $10k fine, and up to $50k if continued failure to file

Similar to FBAR, but higher thresholds, and submitted to the IRS as part of the tax return. For more info - see FBAR-8938 Comparison Table

W-9 - Bank Asks about US Tax Compliance Status

W-9 - Bank Asks about US Tax Compliance Status
  • 'FATCA Letter' - Bank asks you to certify tax compliance status by completing w-9 or w-8
    • - Part of FATCA compliance - if your bank believes you are 'US person', they must share your information with US tax authorities to remain compliant with regulators.
    • - Failure to respond in a timely manner may result in the bank closing your account.
  • If compliant, simply complete the form and send it back.
  • If delinquent - be aware that the bank will transmit your information to the IRS - it is recommended to get tax complaint ASAP.

Will I owe Tax?

  • Now the good news. If you are abroad, the first $100k of wages is tax free in the US
    • Foreign Earned Income Exclusion (FEIE)
      • Physical presence test - spend at least 330 full calendar days during a period of 12 consecutive months outside the US
      • Bona-Fide Residency - Establish 'residency' in a foreign country. Requires full calendar year abroad to start.
      • Self-Employment qualifies for FEIE, but self employment tax requires additional exclusion. If filed properly - for Ireland - you are only liable for self-employment taxes to Ireland, not the US.
  • Foreign Tax Credit - income tax paid to another country will reduce or offset your US tax obligations
  • Foreign Housing Exclusion - exclude cost of rent and utilities from taxable earnings on top of the first $100K
    • Each city has a different limit (i.e - Dublin is more expensive than Bucharest)

How Far Back Do I Need to File?

  • In 2014, the IRS introduced 'Streamlined Foreign Offshore Procedure' - Amnesty from Penalties
    • 3 years tax returns, 6 years FBAR. Currently 2019-2021. All years in question must be 'delinquent'.
    • No 'failure to file' penalties. No 'failure to pay tax' penalties.
    • Most importantly - amnesty from FBAR penalties
    • No 'deadline'“ but risk is that the IRS may change or discontinue this program

Situational Analysis

Jane from Dublin
Jane
from Dublin
Kate from France
Kate
from France
Kate from France
Kate
from France
Sandra from Germany
Sandra
from Germany
Michaela, from Spain
Michaela
from Spain
  • Jane (US Citizen) earns €50k (55k USD) as a teacher in Dublin. Jane also earns €10k as a private tutor.
  • Jane`s husband, Mike, an Irishman, also earns €50k (55k USD) as a paramedic.
  • They have a joint bank account at AIB which has €12k (13k USD)
  • Jane does not need to declare Mike`s income on her return.
  • Jane will not owe tax to the US, but she must file a return annually, and file FBAR annually.
  • Jane does not need to file FATCA (form 8938)
  • Katie, a US citizen, moved to France for graduate school
  • Katie does not work while studying
  • Katie has a French checking account with a €3k balance, and savings account with a €6.5k balance.
  • Katie does not need to file a tax return, but she must file form FBAR annually as she has non-US bank accounts that in aggregate exceed $10k USD €9.5k is $10.5k)

Katie is considering an internship at a local newspaper and wants to know what impact it would have on her taxes.

She is choosing between the following options:

  • €200 a month - equivalent of $2700 a year. No filing requirement.
  • €500 a month - equivalent of $6700 a year. No filing requirement if Single, Married Filing Jointly, or Head of Household. If Married filing separately, required to file tax return. Will owe no tax.
  • €800 a month - equivalent of $10800 a year. Filing requirement under any filing status. Will owe no tax.

Katie is also considering a graduate fellowship.

  • If scholarship payments are made for tuition/books - it is not taxable income.
  • If scholarship payments are 'stipends' for living expenses - this is taxable income.
  • Filing thresholds remain the same (both scholarship payments need to be added together). Will likely owe no tax in either situation due to foreign earned income exclusion.
  • Sandra was born in the US and her family moved to Germany when she was 5
  • Sandra has not been back to the US and never filed taxes
  • For the last 6 years, Sandra has earned €120k per year as a lawyer in Hamburg, and has investment accounts totaling €450k
  • Sandra needs to file annual tax returns, FBAR, and FATCA.
  • Between the Foreign Earned Income Exclusion, Foreign Tax Credit, and Foreign Housing Exclusion, Sandra will likely owe no tax.
  • Sandra should file through the Streamlined Procedure with tax returns (including form 8938) for 2013-2015 and 2010-2015 FBAR
  • Sandra must continue these forms annually (if she meets the thresholds)
  • Michaela is a green card holder who lives in Spain but does not pay tax to Spain and does not pay into the local Social Security System.
    • As a GC holder, Michaela has the same tax filing obligations as a US citizen and must file form 1040 reporting her worldwide income.
  • Michaela is a web designer who works remotely
  • Michaela is wondering how much she will be taxed on her earnings
    • If Michaela earns €500, Michaela must file a US tax return (over $400 threshold for selfemployment income). She will owe no income tax
    • If Michaela earns €5,000, must file, but would owe no tax to the US.
    • If Michaela earns €50,000, Michaela must file, but would owe no tax to the US.
    • If Michaela earns €500,000 and has €200,000 in business expenses. She can exclude from the net business income(€300k):
      • $100k for FEIE and up to $14K of housing expenses.
      • If she does not pay tax in Ireland the remaining income will be taxable in the U.S.
      • Regardless of the income exclusion, net self-employment income in each case will be subject to U.S. Social Security and Medicare tax - unless Michaela pays Social Security tax to Spain
        • There is no double taxation - if filed properly, Michaela will only need to pay Social Security Tax to Spain

Other Tidbits

Unheritance/Gifts
Unheritance/Gifts

Not taxable.
However – if received from a Non-US person and over $100k USD , recipient must file form 3520. If US person, no filing requirement for the recipient

Capital Gains
Capital Gains

Taxable in the year when they are realized. Tax rate depends on type and length of investment.
Use of proceeds does not impact the taxability of the sale.

Inclusion of Foreign Spouse
Inclusion of Foreign Spouse?

You do not have to report your non-US spouse’s income on your tax return. There are situations where it may be more beneficial – but it is not required.

IRS Document Requirement
IRS Document Requirement?

Non-US forms do not need to be sent to the IRS.
However, you should retain records in case of audit.