Expatriate Tax Services
Expatriate taxation is highly specialized, and the Foreign Account Tax Compliance Act now requires over 110 countries to report financial accounts held by U.S. citizens and Green Card holders to the IRS. Just a simple oversight can cost a taxpayer $10,000, or more. So, it’s important to use a CPA who works with expatriates a lot instead of someone who handles just one expat a year.
For over 20 years, E&A’s award-winning team has helped with the U.S. tax compliance obligations of U.S. citizens and resident aliens (Green Card holders) working or living outside of the U.S., as well as citizens of other countries living within the U.S. E&A has worked with personal and business clients in/from 78 countries on 6 continents. Because of other countries’ myriad laws, treaties, and specific licensing requirements, E&A only handles U.S. tax issues. However, our colleagues around the world address non-U.S. tax matters.
Our services include foreign asset reporting in addition to Federal and state income tax compliance and preparation. We also provide tax planning services for those considering relocation abroad, etc.
Not knowing what you don’t know can (and likely will) hurt you. The main tax compliance obligations expatriates face are:
- Income tax filings—These issues are tricky, can be complex, and can have huge ramifications. Incorrectly handling overseas retirement accounts; residency status; the number of days outside the U.S.; foreign tax credits against U.S. tax; and a $105,900 Foreign Earned Income Exclusion can easily cost a taxpayer tens of thousands of dollars.
- Foreign Bank Account Reporting (FBAR)—Bank or investment accounts (incl. many retirement accounts) over which a person has signatory control must be reported, even without ownership if they total over $10,000 at any time in the year. For example, the parents of a son/daughter living overseas who have signature authority over his/her account in that location must report the account. Penalties are draconian and can include criminal sanctions in addition to monetary penalties of up to 100% of the account balance. However, ways to minimize the impact of past non-compliance exist if you “catch up” voluntarily.
- Foreign Financial Asset Reporting—Additional, separate reporting is required if the total balance of foreign bank and investment accounts (including many retirement accounts) a person owns, even without signatory control, exceed certain levels. Those levels vary based on marital status and residency, and can be as low as $75,000. The same draconian penalties can apply.
- Foreign business ownership reporting—U.S. citizens and Green Card holders must also report greater than 10% ownership in non-U.S. businesses and trusts. Non-compliance can trigger penalties up to $100,000 per failure. Certain large transactions with non-U.S. parties also must be disclosed.
We’ll be pleased to help you navigate the complex rules, avoid taking undue risk, and minimize your tax due. Unless a person works with these issues all the time, it’s very easy to miss something that could have a huge adverse impact on you.