US Citizens with Foreign Income or Financial Assets
If you are a US citizen, the United States requires you to file a tax return every year on your worldwide income, no matter where you are a resident. This also applies if the income was earned outside of the US, and regardless in which currency the income was earned.
For US citizens there are strict rules regarding reporting of foreign assets such as bank accounts and other financial investments or ownership in a foreign businesses. We can help you comply with the Foreign Account Tax Compliance Act (FATCA) and Report of Foreign Bank and Financial Accounts (FBAR).
The reporting thresholds are differet for each of these forms. If the total value of your foreign financial accounts exceeds $10,000, you will be required to file the FBAR. You will be required to file Form 8938, Statement of Specified Foreign Financial Assets if the total value of your foreign assets is more than $50,000 if you live in the United States or more than $200,000 if you live outside of the United States.
Resident Aliens and Foreign Residents
Of course US taxation and tax planning also plays an important role for international entrepreneurs and companies looking to invest or expand their business in the United States. If you are living in the US or are a US Greencard holder, you will need to file an annual tax return. For tax purposes, you will be treated similarly to a US citizen with many of the same deductions and credits.
If you are not a US citizen but have income or investments in the United States, you may face special tax needs. There are 30% withholding taxes for certain types of income such as interest, dividends or rental income from real estate. We can help you comply with US tax and accounting requirements and provide planning to help you reduce your tax and compliance burdens.
Foreign Earned Income Exclusion
If you meet certain requirements, you may be able to pay zero taxes on the income you earn outside of the United States while you are living internationally. This is done by using the IRS Foreign Earned Income Exclusion. For 2018, you can exclude up to $104,100 from your taxable income. For amounts you earned above that threshold, we may be able to use the taxes that you paid to a foreign country as a Foreign Tax Credit which could reduce your US taxes on a dollar for dollar basis.
Streamlined Filing Procedure
If you have not filed your taxes in a long time, this special IRS program is for you. By filing the 3 most recent years of tax returns and 6 years of FBAR forms, the IRS has been waiving late filing and FBAR penalties as long the lack of filing was non-willful. We can help you take advantage of this program while it is still available. That way you’ll be up to date and can get back on a regular schedule of filing taxes.
Tax and Legal Advice in Europe
Through our working partnership with the Frankfurt, Germany based law and accounting firm Winheller, we can help you manage your European tax and legal needs through attorneys and tax advisors based in Germany.
Consultative Approach to Helping You
Does all of this sound confusing? It does to most people! That’s why we use a consultative approach to helping you with your international tax situation. We review the numbers and the tax return with you so that you understand what’s going on and we have another chance to make sure all of the information is correct so that you’re paying the least amount of taxes possible. Living abroad and learning new laws and regulations is difficult enough, let us help you with staying compliant with the US tax system!