Expatriate Taxes

U.S. citizens and U.S. permanent residents are subject to income taxes on their worldwide income. The U.S. taxes are based upon citizenship, not on tax residency. U.S. citizens and U.S. permanent residents living and employed outside the U.S. are required to file a U.S. tax return and report their worldwide income as part of their annual U.S. tax filings. When certain qualifications are met, U.S. expats may be eligible to offset some or all of their U.S. tax obligations. Most of these tax benefits are due to income and housing exclusions, as well as deductions and foreign tax credits. Additionally, various international income tax treaties may also help reduce or eliminate U.S. or foreign tax liabilities. Our primary objective is to assist our expatriate clients to minimize their dual tax obligation and be compliant with filing U.S. taxes. We prepare and file all forms so that as an expatriate you are assured that your US tax obligations are met.

State Compliance for Expats

  • There are 9 states that currently have no state income taxes and do not tax the expat income.
  • There are 4 unfavorable states. If the state can locate any type of proof of residency documents then an expat will have to file, report and pay on their foreign income to these 4 states
  • The remaining states are neither favorable nor unfavorable. The majority of these states will release you from residency status if you have been gone for more than six months (though you will have to prove residency elsewhere).

Foreign Earned Income Exclusion

  • Tax benefit that allows a certain dollar amount in exclusions each year is adjusted for inflation from income such as salary, wages etc. we will
    • Identify the earned income exclusion
    • Qualify for the foreign earned income exclusion
    • Other benefits calculations such as housing
    • Identify the bonafide or physical present test

Foreign Tax Credit

  • If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes. We will
    • Review the credit
    • Calculate the correct credit
    • Identify carry back or carry forward credits

Amendments to tax filings to report foreign income

  • In addition we also help expats file any amendments to their federal and/or state income tax returns to report prior missing foreign income
We help our clients with the following tax filings
Type of Filing Form
Expat Taxes 1040, 2555, 1116 and/or State Income Taxes
FBAR 114
FATCA 8938
CFC 5471
PFIC 8621