Many Americans living abroad aren't aware that they have US tax filing requirements. As expats, they assume that they don't have to file a US federal (or State) return, or pay US taxes. Expats who assume this are mistaken though, and may soon face IRS audits and fines if they don't meet their US legal filing and tax obligations, as the IRS is becoming more and more capable of tracking down Americans living abroad by accessing their foreign income and assets details.
FBAR is an acronym for Foreign Bank Account Report. Every American who has a minimum of $10,000 in total in overseas bank or other financial accounts at any time during a tax year has to file an FBAR every year, whether they live in the States, or abroad.
With the 2015 FBAR deadline now upon us, what are the possible consequences for Americans with foreign bank accounts who haven't filed?
What is it?
FBAR is an acronym for the Foreign Bank Account Report. It is meant to prevent people from avoiding taxes by hiding their wealth abroad. In practice this means declaring foreign bank accounts by filing FinCEN form 114.
All US taxpayers living overseas have to file a federal income tax return each year if they earn over $10,000, or just $400 of self-employment income, regardless of where they live or where their income is generated. They may also have to pay US income tax on their foreign earned income, depending on their circumstances.
If you live overseas and you are eligible to receive social security benefits, you may receive them abroad (unless you live in a country under US sanctions, such as North Korea).
FATCA is an acronym for the Foreign Account Tax Compliance Act, a law passed by Congress in 2010 to help crack down on tax evasion involving people keeping money offshore. The law came into effect on July 1st, 2014.
FATCA has two aspects. It requires individuals with assets abroad worth over a certain value to report them when they file their federal tax return, and it also requires foreign financial institutions to report their US account holders.
Approximately three quarters of the estimated seven to nine million Americans living abroad aren't currently filing a federal tax return. Seeing as all American citizens and green card holders who earn over $10,000 (or just $400 of they're self-employed) are required by law to file a federal return declaring their worldwide income, no matter where in the world they live, the IRS is understandably keen to track down the individuals who aren't currently filing and ask them why.
There are an estimated 20,000 Americans living in Thailand.
Living in Thailand is an incredible experience for a variety of reasons – the culture, climate, cuisine, friendly people, and low cost of living to name but a few. As an American expatriate living in Thailand though, what exactly do you need to know regarding filing Us expat (and Thai) taxes?
There are an estimated 26,000 Americans living in Singapore.
Living in Singapore is a fantastic experience for a variety of reasons – it has a great night life, public transport, schools and healthcare, it's safe and friendly, and the rest of Asia is on your doorstep. As an American expatriate living in Singapore though, what exactly do you need to know regarding filing US expat (and Singaporean) taxes?