<![CDATA[US Expat Tax Services | Expatriate Tax Preparation | Bright!Tax - Blog]]>Wed, 22 Nov 2017 11:48:56 -0800Weebly<![CDATA[US Expat Taxes for Americans Living in Mongolia – Everything You Need to Know]]>Wed, 22 Nov 2017 11:16:00 GMThttp://brighttax.com/blog/us-expat-taxes-for-americans-living-in-mongolia-everything-you-need-to-know
US Expat Taxes for Americans Living in Mongolia – Everything You Need to Know
It has been estimated that there are several thousand Americans living in Mongolia.
 
Living in Mongolia is an incredible experience for a number of reasons, including the friendly locals, the culture and cuisine, the quality of life, and the natural environment. As an American expatriate living in Mongolia though, what exactly do you need to know regarding filing US expat (and Mongolian) taxes?
All US citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or their income is generated.
 
The good news is if you are paying income tax in Mongolia, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
 
US taxes – what you need to know
 
If you earn over US$10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040. While any US taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on request until October 15th.
If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
 
If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
Mongolia operates a self-assessment tax return filing system. Tax returns are due to be filed with the local tax office by 15 February following the end of the tax year. The balancing payments are due by the same date. There are no extensions.”     - KPMG
If you pay income tax in Mongolia, there are several exemptions that allow you to pay less or no US income tax on the same income to the IRS. The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a Mongolian resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you've paid in Mongolia. These exemptions can be combined if necessary. Remember though that even if you don't owe any tax to the IRS, if your income is over US$10,000 (or $400 if you're self-employed) you still have to file a federal return.
 
The US and Mongolian governments share taxpayer info, and Mongolian banks pass on US account holders' account info to the IRS, so it's not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.
If you're a US citizen, green card holder, or US/Mongolian dual citizen, and you have been living in Mongolia but you didn't know you had to file a US tax return, don't worry: there's a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don't delay though, in case the IRS comes to you first.
 
Mongolian taxes – what you need to know
Mongolian residents are taxed on their worldwide income at a flat rate of 10%. Non-residents only pay tax on their Mongolian sourced income.
 
Foreigners living in Mongolia are considered a resident for tax purposes if they own a residence in Mongolia or if they spend over 183 days in Mongolia in a tax year.
 
The Mongolian tax year is the same as in the US, which is to say the calendar year. Income tax returns are due by February 15th. The Mongolian tax authority is called the General Department of Taxation.
 
We strongly recommend that if you have any doubts or questions about your tax situation as a US expat living in Mongolia that you contact a US expat tax specialist. 
 
At Bright!Tax, we have clients in over 150 countries worldwide. US expat tax is all we do and we are very good at it. If you have any questions regarding your personal situation, don't hesitate to contact us and we'll be happy to help.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[Bright!Tax Now Offers UK Tax Filing For US Expats]]>Mon, 20 Nov 2017 18:20:02 GMThttp://brighttax.com/blog/brighttax-now-offers-uk-tax-filing-for-us-expats
Bright Tax Now Offers UK Tax Filing For US Expats

Bright!Tax is the leading provider of US expat tax services, having won four EMMA Awards for performance and innovation in 2017.

Thanks to our partnership with Godiva Tax Services, Bright!Tax now offers UK tax filing for Americans living in the UK too, providing a one stop shop solution for the more than 200,000 US expats in the UK.

UK Taxes for US Expats

The British tax year runs from April 6th to April 5th. The UK taxes residents on their worldwide income on a scale from 0% to 45%.

If you live in the UK and your only income is from UK employment, income tax is deducted at source and you don't have to file a UK tax return. Otherwise, UK tax returns should be filed to Her Majesty's Revenue and Customs (HMRC) by January 1st online.

Bright!Tax, the leading US expat tax services provider, now offers UK tax filing too, in partnerhip with Godiva Tax Services. This offers a great economy of effort for US expats in the UK, as despite the differing tax years and tax systems, expats only need provide their tax information once now, and can relax in the knowledge that we will file both of their returns accurately, on time, and in their best interests.

Simply fill in the brief form below, and we'll be in touch right away regarding filing your UK tax return.

US Taxes for Expats

The US requires expats to file US taxes, reporting their worldwide income.

Thankfully, there a  number of exemptions available for expats that, when claimed, mean most expats owe little or no US tax. They must still file a US return to claim these exemptions though.
There are further US filing requirements for expats too, such as FBAR (Foreign Bank Account Report) filing, which requires expats to report their foreign bank and investment accounts if their total combined balances exceed $10,000 at any time during the year.

There is also an IRS amnesty program called the Streamlined Procedure that lets expats who are behind with their US tax filing catch up.
Bright!Tax is the global leader in US expat tax services, and the outstanding specialist in all US expat tax matters, including federal and state tax return filing, trusts, corporations, foreign asset and account reporting, and catching up using the Streamlined Procedure.

With clients in over 150 countries, Bright!Tax is a leading US expat tax services provider for the 9 million Americans living abroad. If you have any questions regarding your tax situation, don't hesitate to get in touch for some advice.
If you would like us to prepare your US taxes, click started using the button and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[Bright!Tax Undisputed Expat Tax Services Leader in 2017]]>Mon, 20 Nov 2017 11:14:00 GMThttp://brighttax.com/blog/brighttax-undisputed-expat-tax-services-leader-in-2017
BrightTax Undisputed Expat Tax Services Leader in 2017
Bright!Tax has dominated the 2017 FEM EMMA Expat Tax Provider of the Year awards in 2017, having been named winner in two out of the three global regions, and runner up in the third.
 
The FEM EMMA awards celebrate innovation and excellence in the Global Mobility and Expat Services industries across three regions - the Americas, Asia Pacific (APAC), and Europe, the Middle East and Africa (EMEA).
The Americas FEM EMMA awards took place at the Downtown Denver Marriott in May. As well as winning Tax Provider of the Year, Bright!Tax was also named runner up in the Innovation in Banking and Financial Services category, behind winner HSBC.
 
Bright!Tax won Tax Provider of the Year for a second time at the Hong Kong Harbour Grand Hotel in September, this time for the APAC region, a momentous achievement in a highly competitive group that included runner up Big 4 accounting giant EY.
In the final awards event in 2017, the EMEA EMMA awards at the O2 Intercontinental in London in early November, Bright!Tax was named runner up in the Tax Provider of the Year category, just missing out on a global clean sweep in this category.
 
Bright!Tax’s unprecedented tally of 4 accolades in a single year is testament to the way the firm is revolutionizing providing tax services to US expats around the world.
I’m thrilled with the recognition that we’ve received with our global FEM awards, in all 3 regions. We won’t be resting on our laurels though, we’ve got more ground-breaking new developments in the pipeline for 2018.” - Greg Dewald, Bright!Tax founder and CEO
Bright!Tax’s dominance this year is built on understanding the need for clients to maintain a personal connection with their accountant, wherever in the world they are living. The firm has structured its business to allow this, while also employing state of the art innovative technology to make filing US taxes from overseas simple, connected, and hassle-free.
 
Bright!Tax’s new innovations in 2017 include its proprietary secure Client Organizer, which allows clients to easily enter their information, and carry forward details from one year to the next. Bright!Tax also introduced a mobile app in 2017, an industry first, allowing clients to communicate with their CPA, keep track of the time they spend in and out of the US (this is required on expats’ tax returns), and securely upload documents from their phone or tablet.
The marriage of highly-qualified, expat specialist, personable CPAs and innovative, cutting edge technology has allowed Bright!Tax to grow exponentially, largely by word of mouth. The firm now has clients in over 190 countries, almost every country on earth.

Bright!Tax’s clients are thrilled with the results.
One recent client commented, “Very efficient and very helpful”, while another said, “Excellent experience. Timely responses, knowledgeable staff. Thank you!”

Greg Dewald, Bright!Tax founder and CEO, said: “It’s been an incredible year. The team at Bright!Tax has surpassed itself. We’ve introduced some game changing technological solutions to help bridge the geographical divide between us and our clients, but without compromising on the importance of a one-to-one client-accountant relationship. The results have been above and beyond what we hoped for, and I’m thrilled with the recognition that we’ve received with our global FEM awards, in all 3 regions. We won’t be resting on our laurels though, we’ve got more ground-breaking new developments in the pipeline for 2018, while always  keeping our clients centre stage.”
 
With clients in over 150 countries, Bright!Tax is a leading US expat tax services provider for the 9 million Americans living abroad. If you have any questions regarding your tax situation, don't hesitate to get in touch for some advice.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[US Expat Taxes for Americans Living in Kyrgyzstan – Everything You Need to Know]]>Mon, 20 Nov 2017 11:07:30 GMThttp://brighttax.com/blog/us-expat-taxes-for-americans-living-in-kyrgyzstan-everything-you-need-to-know
US Expat Taxes for Americans Living in Kyrgyzstan – Everything You Need to Know
It has been estimated that there are several thousand Americans living in Kyrgyzstan.
 
Living in Kyrgyzstan is an incredible experience for a number of reasons, including the friendly locals, the culture and cuisine, the quality of life, and the mountains and countryside. As an American expatriate living in Kyrgyzstan though, what exactly do you need to know regarding filing US expat (and Kyrgyzstani) taxes?
All US citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or their income is generated.
 
The good news is if you are paying income tax in Kyrgyzstan, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
 
US taxes – what you need to know
 
If you earn over US$10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040. While any US taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on request until October 15th.
If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
 
If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
Kyrgyzstan citizens who are tax residents should be taxed on their worldwide income. Kyrgyzstan citizens who are not residents for tax purposes and foreign citizens are taxed on their Kyrgyzstan-source income only.”      - PwC
If you pay income tax in Kyrgyzstan, there are several exemptions that allow you to pay less or no US income tax on the same income to the IRS. The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a Kyrgyzstani resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you've paid in Kyrgyzstan. These exemptions can be combined if necessary. Remember though that even if you don't owe any tax to the IRS, if your income is over US$10,000 (or $400 if you're self-employed) you still have to file a federal return.
 
The US and Kyrgyzstani governments share taxpayer info, and Kyrgyzstani banks pass on US account holders' account info to the IRS, so it's not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.
If you're a US citizen, green card holder, or US/Kyrgyzstani dual citizen, and you have been living in Kyrgyzstan but you didn't know you had to file a US tax return, don't worry: there's a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don't delay though, in case the IRS comes to you first.
 
Kyrgyzstani taxes – what you need to know
Kyrgyzstani residents are taxed on their worldwide income at a flat rate of 10%. Non-residents are only taxed on Kyrgyzstani sourced income, defined as any income from activities in Kyrgyzstan.
 
Foreigners living in Kyrgyzstan are considered a resident for tax purposes if they spend over 183 days in Kyrgyzstan in a 12 month period that overlaps with the tax year.
 
The Kyrgyzstani tax year is the same as in the US, which is to say the calendar year. Income tax returns are due by April 1st. The Kyrgyzstani tax authority is called the State Tax Service.
 
We strongly recommend that if you have any doubts or questions about your tax situation as a US expat living in Kyrgyzstan that you contact a US expat tax specialist. 
 
At Bright!Tax, we have clients in over 150 countries worldwide. US expat tax is all we do and we are very good at it. If you have any questions regarding your personal situation, don't hesitate to contact us and we'll be happy to help.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[Claiming the Foreign Earned Income Exclusion when Filing a Late Return - What US Expats Need to Know]]>Thu, 16 Nov 2017 10:12:21 GMThttp://brighttax.com/blog/claiming-the-foreign-earned-income-exclusion-when-filing-a-late-return-what-us-expats-need-to-know
Claiming the Foreign Earned Income Exclusion when Filing a Late Return - What US Expats Need to Know

The Foreign Earned Income Exclusion lets US expats exclude the first around $100,000 (the exact figure rises a little each year) of their earned income from US taxes.
 
It’s a great choice for many expats who earn less than this threshold, and sometimes a good option for expats who earn above the threshold too.
To claim the Foreign Earned Income Exclusion, expats have to file form 2555 with their annual US tax return. Form 2555 requires expats to prove that they live abroad.
 
They must do this either using the Bona Fide Residence Test, which requires them to prove that they are a permanent resident in another country, or the Physical Presence Test, which requires them to prove that they were outside the US for at least 330 days during the tax year (or a 365 day period that coincides with the tax year).
 
Many expats however, thinking that the Foreign Earned Income Exclusion exempts them from paying US taxes, incorrectly assume that they don’t have to file a US tax return. This assumption means that they have to file a late return and claim the Foreign Earned Income Exclusion in retrospect.
 
When can expats file the Foreign Earned Income Exclusion late?
 
The IRS rules allow some leeway at least for expats in this situation. They stipulate that the Foreign Earned Income Exclusion can be claimed:
- as part of a timely filed return, including any extensions
 
- as part of a return that is amending a timely filed return
 
- as part of a late filed return filed within one year of the original due date of the return (not counting any extensions)
The foreign earned income exclusion is voluntary. You can choose the foreign earned income exclusion and the foreign housing exclusion by completing the appropriate parts of Form 2555.”    - the IRS
After a year though, expats may still file a late return and claim the Foreign Earned Income Exclusion so long as they do so before the IRS discovers the absence of the return and contacts them.
 
The Redfield decision
 
Expats who wait until the IRS contacts them before filing late returns shouldn’t expect leniency from the IRS, as demonstrated by the recent Redfield decision.
 
Damon Redfield is a former US marine who left the military in 2010, He subsequently worked as a civilian contractor in Afghanistan briefly before returning to the US. He didn’t file a tax return though relating to the time he spent as a civilian abroad until the IRS contacted him in 2014, at which point he filed a late return and claimed the Foreign Earned Income Exclusion.
The IRS disallowed his late claim though, as they had already contacted him, and a court confirmed their decision in August this year, leaving Redfield liable to pay not just tax on the income he earned in 2010, but interest and penalties too, all of which would have been avoided had he filed and claimed the Foreign Earned Income Exclusion before the IRS contacted him.
 
Catching up
Expats who need to catch up with their US tax return filing are better off filing at the earliest opportunity, before the IRS contacts them. In 2014, the IRS introduced a way for expats to catch up with multiple years US tax filing without facing penalties called the Streamlined Procedure.
 
To catch up using the Streamlined Procedure, expats must file their last 3 tax returns and, if required, their last 6 FBARs (Foreign Bank Account Reports, for expats with over $10,000 in total in foreign bank and investment accounts at any time during a tax year), and self-certify that their previous failure to file was non-willful.
 
When catching up using the Streamlined Procedure, expats can claim the Foreign Earned Income Exclusion (and/or any other exemptions available to expats), so in most cases become compliant without owing the IRS a penny.
 
With clients in over 150 countries, Bright!Tax is a leading US expat tax services provider for the 9 million Americans living abroad. If you have any questions regarding your tax situation, don't hesitate to get in touch for some advice.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[US Expat Taxes for Americans Living in Bulgaria – Everything You Need to Know]]>Wed, 15 Nov 2017 10:05:45 GMThttp://brighttax.com/blog/us-expat-taxes-for-americans-living-in-bulgaria-everything-you-need-to-know
US Expat Taxes for Americans Living in Bulgaria – Everything You Need to Know
It has been estimated that there are several thousand Americans living in Bulgaria.
 
Living in Bulgaria is an incredible experience for a number of reasons, including the friendly locals, the culture and cuisine, the quality of life, and having the rest of Europe on your doorstep. As an American expatriate living in Bulgaria though, what exactly do you need to know regarding filing US expat (and Bulgarian) taxes?
All US citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or their income is generated.
 
The good news is if you are paying income tax in Bulgaria, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
 
US taxes – what you need to know
 
If you earn over US$10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040. While any US taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on request until October 15th.
If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
 
If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
Bulgarian tax residents are taxed on their worldwide income. Non-residents are taxed in Bulgaria only on their Bulgarian-source income. Generally, this is all income derived as a result of economic activities performed in the territory of Bulgaria or as a result of disposal of property in Bulgaria.”       - PwC
If you pay income tax in Bulgaria, there are several exemptions that allow you to pay less or no US income tax on the same income to the IRS. The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a Bulgarian resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you've paid in Bulgaria. These exemptions can be combined if necessary. Remember though that even if you don't owe any tax to the IRS, if your income is over US$10,000 (or $400 if you're self-employed) you still have to file a federal return.
 
The US and Bulgarian governments share taxpayer info, and Bulgarian banks pass on US account holders' account info to the IRS, so it's not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.
If you're a US citizen, green card holder, or US/Bulgarian dual citizen, and you have been living in Bulgaria but you didn't know you had to file a US tax return, don't worry: there's a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don't delay though, in case the IRS comes to you first.
 
Bulgarian taxes – what you need to know
Bulgarian residents are taxed on their worldwide income at a flat rate of 10%. Non-residents are only taxed on Bulgarian sourced income, defined as any income from activities in Bulgaria.
 
Foreigners living in Bulgaria are considered a resident for tax purposes if their center of vital interests is in Bulgaria, or if they spend over 183 days in Bulgaria in a 12 month period that overlaps with the tax year.
 
The Bulgarian tax year is the same as in the US, which is to say the calendar year. Bulgarian income tax returns are due by April 30th. The Bulgarian tax authority is called the National Revenue Agency.
 
We strongly recommend that if you have any doubts or questions about your tax situation as a US expat living in Bulgaria that you contact a US expat tax specialist. 
 
At Bright!Tax, we have clients in over 150 countries worldwide. US expat tax is all we do and we are very good at it. If you have any questions regarding your personal situation, don't hesitate to contact us and we'll be happy to help.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[Top Year-End Tax Planning Strategies for US Expats in 2017]]>Mon, 13 Nov 2017 10:25:09 GMThttp://brighttax.com/blog/top-year-end-tax-planning-strategies-for-us-expats-in-2017
Top Year-End Tax Planning Strategies for US Expats in 2017
Year-end tax planning this year is slightly different this year due to the proposed changes to the tax system. Despite this uncertainty however, there are still plenty of things that expats can do before the holidays to make their lives easier in 2018, and possibly save them money too.
 
Assemble your 2017 records
 
The first step is to gather all your records for 2017. These should include:
- Proof of your income and deductible expenses. While exactly which expenses can be deducted may change next year, for now assume the same as last year.
 
- Travel records. Expats claiming the Foreign Earned Income Exclusion often need to prove that they spent at least 330 days outside the US in the year, so having records of travel dates pertaining to the US is critical to enable expats not to pay US taxes on their income earned in 2017.
 
- Proof of rental housing expenses. Expats who claim the Foreign Earned Income Exclusion but earn above around $100,000 and who rent their homes may also wish to claim the Foreign Housing Exclusion, for which they’ll require proof of their housing expenses.
 
- Bank and investment account statements. Expats who have over $10,000 in bank and investment accounts outside the US have to report them by filing an FBAR (or Foreign Bank Account Report). When filing an FBAR you have to report your maximum balances during the year for all of your foreign bank and investment accounts; having your statements ready makes this easy.
Reduce your 2017 taxable income through retirement contributions
 
Expats who owe US (and in many cases foreign) income taxes for the year can reduce what they owe by making further contributions into qualifying retirement plans before December 31st. Qualifying plans include 401(k), 403(b), Deductible IRA, SIMPLE IRA, and SEP plans.
The 2016 mobility survey of 224 companies in 26 countries conducted by business consultancy Price Waterhouse Cooper found that 12.2% of all employees work overseas every year.”     - Forbes
Utilize investment losses
 
It may be an old strategy, but it’s still an effective one for expats with losses on investments in 2017.
 
So long as you sell the loss making investments before the end of the year, you can offset the loss against investments that have risen in value. Or, if your overall portfolio has made a loss in 2017, you can offset up to $3,000 of loss against your income, potentially reducing your US tax liability.
 
Plan your travel to the US carefully
 
Maintaining the ability to claim the Foreign Earned Income Exclusion allows millions of expats not to have to pay US income tax. Many of them choose to use the Physical Presence test when claiming the Foreign Earned Income Exclusion, which requires that expats prove that they spend at least 330 days a year outside the US. As such, tax planning in the form of ensuring that expats don’t spend too long in the US in a year should form part of expats’ travel planning for 2018. (Also, consider downloading and utilizing our mobile app, which counts the days you spend outside the US each year and automatically creates a travel log for you, saving you from going through your records at tax time).
Aim to file your foreign tax returns promptly
 
Looking ahead to 2018, there are several other things that expats can plan to do now to ensure that their US tax filing goes smoothly. For example, expats who claim the Foreign Tax Credit should aim to file their foreign tax return promptly, in order to document the foreign income tax paid or accrued on their 2017 US income.
If you live in a country where the tax return is filed later in the year (ex. Australia, UK) though, be sure to request that your CPA file an US filing extension on your behalf.

If you owed US tax in 2016, prepare to pay estimated 2017 tax
 
If you did owe US taxes last year, estimate how much you will owe for 2017 so you can make estimated payments in advance of April 15th. Even though expats aren’t required to file their US tax return before June 15th, any taxes due are still due by April 15th, and after this date interest and possible penalties may be incurred.
 
Catch up now
 
We strongly advise expats who haven’t been filing their US taxes to catch up with their filing before the IRS comes to them.
 
The IRS now has global reach, so it’s a much better strategy to catch up with US tax filing from abroad using the Streamline Procedure program, which allows expats to claim the exemptions that can reduce or eliminate their US tax liability, than doing nothing and waiting for the IRS to notice.
 
With clients in over 150 countries, Bright!Tax is a leading US expat tax services provider for the 9 million Americans living abroad. If you have any questions regarding your tax situation, don't hesitate to get in touch for some advice.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[US Expat Taxes for Americans Living in Tajikistan – Everything You Need to Know]]>Mon, 13 Nov 2017 10:10:46 GMThttp://brighttax.com/blog/us-expat-taxes-for-americans-living-in-tajikistan-everything-you-need-to-know
US Expat Taxes for Americans Living in Tajikistan – Everything You Need to Know
It has been estimated that there are several thousand Americans living in Tajikistan.
 
Living in Tajikistan is an incredible experience for a number of reasons, including the friendly locals, the history, cuisine, and culture, the mountains, and the quality of life. As an American expatriate living in Tajikistan though, what exactly do you need to know regarding filing US expat (and Tajikistani) taxes?
All US citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or their income is generated.
 
The good news is if you are paying income tax in Tajikistan, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
 
US taxes – what you need to know
 
If you earn over US$10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040. While any US taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on request until October 15th.
If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
 
If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
All Tajik citizens are considered tax residents in Tajikistan. In addition, foreigners who are present in Tajikistan for more than 182 days in a consecutive 12-month period are also considered residents.”  - The Tajikistani Departmenet of Revenue and Customs
If you pay income tax in Tajikistan, there are several exemptions that allow you to pay less or no US income tax on the same income to the IRS. The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a Tajikistani resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you've paid in Tajikistan. These exemptions can be combined if necessary. Remember though that even if you don't owe any tax to the IRS, if your income is over US$10,000 (or $400 if you're self-employed) you still have to file a federal return.
 
The US and Tajikistani governments share taxpayer info, and Tajikistani banks pass on US account holders' account info to the IRS, so it's not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.
If you're a US citizen, green card holder, or US/Tajikistani dual citizen, and you have been living in Tajikistan but you didn't know you had to file a US tax return, don't worry: there's a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don't delay though, in case the IRS comes to you first.
 
Tajikistani taxes – what you need to know
Tajikistani residents are taxed on their income sourced in Tajikistan on a progressive scale from 8% to 13%. Non-residents are taxed on their Tajikistan sourced income at a flat rate of 25%.
 
Foreigners who are resident in Tajikistan for more than 182 days in a 12 month period are considered residents for tax purposes.
 
The Tajikistani tax year is the same as in the US, which is to say the calendar year. Tajikistani salary income is taxed at source. Residents with other income types should file a tax returns by April 1st. The Tajikistani tax authority is called the General Authority of Zakat and Tax.
 
We strongly recommend that if you have any doubts or questions about your tax situation as a US expat living in Tajikistan that you contact a US expat tax specialist. 
 
At Bright!Tax, we have clients in over 150 countries worldwide. US expat tax is all we do and we are very good at it. If you have any questions regarding your personal situation, don't hesitate to contact us and we'll be happy to help.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[Trump Tax Reform Bill Analysis - What Does it Mean For US Expats?]]>Thu, 09 Nov 2017 10:12:57 GMThttp://brighttax.com/blog/trump-tax-reform-bill-analysis-what-does-it-mean-for-us-expats
Trump Tax Reform Bill Analysis - What Does It Mean For US Expats
On November 2nd, the House of Representatives unveiled the first draft of the Trump Tax Reform Bill. Here we look at how it will affect expats.
 
Citizen based taxation and FATCA
 
There is no mention in the draft Tax Reform Bill of any change to citizen based taxation for individuals, or of repealing FATCA.
It is proposed that corporations are only taxed on their US profits (rather than globally), as taxing corporations globally has (conversely to expectations) reduced government revenue, as globally operating firms have simply relocated to other countries with more favorable tax regimes.
 
Despite ACA (American Citizens Abroad) lobbying to make a similar change away from global taxation for expat individuals, there is no mention of this in the draft bill.
 
Lower income tax rates
 
Trump’s draft tax reform bill lowers income tax rates for most people, although the highest 39.6 highest rate is maintained under the proposals, but now starting at $500,000. These changes will only benefit certain groups of expats though:
 
- those expats working in very low tax (or no tax) countries on salaries that exceed the Foreign Earned Income Exclusion threshold (just over $100,000), and expats such as retirees whose income isn’t earned (e.g. from property rentals or dividends). These expat groups currently pay US taxes and they will pay less US tax in the future.
 
- expats who are working abroad temporarily in a country with higher tax rates than the US who claim the Foreign Tax Credit and are saving up their excess US income tax credits for future use after they return to the US. These expats will have more excess tax credits in the future, thanks to an increased difference between their foreign and US income tax rates.
- expats who pay just US taxes on their US sourced income (e.g. if the country where they live only taxes on income sourced within that country) will also benefit from the lower rates.
 
Most expats though don’t currently pay any US income tax and don’t stand to benefit from the reduced income tax rates.
Some observers may want to blame President Trump for the spike [in US citizenship renunciations], but it is much more likely that longstanding tax issues are the real culprits. And the tax reform now being considered is hardly a game-changer.”     - Forbes
Increased gift and estate tax exemption
 
Wealthier American expats will benefit from the proposed initial doubling of the estate tax limit from $5.49m to $10.98m, with this tax due to be phased out entirely from 2023.
 
US expats who own a foreign business

Expats who own over 50% of a foreign business are facing some changes which may affect their US tax liability.
 
Currently, such expats only pay taxes on their foreign corporations’ profits when they take money out of the company, typically either as salary or dividends.
 
Under the proposed changes however owners of foreign corporations may face a direct tax on 50% of the income of the corporation over a certain amount, that varies according to a complex formula.
 
This implies that new reporting requirements for expats with foreign corporations are in the post, alongside possibly a new tax liability.
 
It will be easier for wealthier expats to renounce US citizenship
Currently, expats whose net worth is over $2m (as well as those who aren’t up to date with their US tax filing) have to pay an exit tax as a percentage of their net worth when they expatriate.

They are allowed to gift a proportion of their net worth up to the value of the estate tax threshold before expatriating though to reduce their net worth beforehand.
The proposed increase of the estate tax threshold will allow more people to reduce their net worth to below $2m if they wish to expatriate without paying the exit tax.
 
Conclusions

While there’s still has a long way to go before the bill becomes law, we can now begin to predict the implications for expats. As things stand, the majority of expats won’t be affected by the changes. Expats who owe US taxes will benefit from the decrease in income tax rates, while those who claim the Foreign Tax Credit and have excess US credits having paid a higher rate of tax abroad meanwhile will find themselves with more excess US tax credits each year than previously, which may benefit them if they move back to the US in the future. Expats with foreign corporations will also have more complex reporting requirements and possibly a new tax bill.
 
While many US expats who have settled abroad permanently will be disappointed that there’s no mention of a change to FATCA or citizen based taxation in the draft bill, in general very few expats will be negatively affected by the proposed changes compared to now.
 
With clients in over 150 countries, Bright!Tax is a leading US expat tax services provider for the 9 million Americans living abroad. If you have any questions regarding your tax situation, don't hesitate to get in touch for some advice.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>
<![CDATA[US Expat Taxes for Americans Living in Hungary – Everything You Need to Know]]>Wed, 08 Nov 2017 10:44:19 GMThttp://brighttax.com/blog/us-expat-taxes-for-americans-living-in-hungary-everything-you-need-to-know
US Expat Taxes for Americans Living in Hungary – Everything You Need to Know
It has been estimated that there are several thousand Americans living in Hungary.
 
Living in Hungary is an incredible experience for a number of reasons, including the history, the architecture and culture, the cuisine, and having the rest of Europe on your doorstep. As an American expatriate living in Hungary though, what exactly do you need to know regarding filing US expat (and Hungarian) taxes?
All US citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or their income is generated.
 
The good news is if you are paying income tax in Hungary, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
 
US taxes – what you need to know
 
If you earn over US$10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040. While any US taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on request until October 15th.
If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
 
If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
Income derived from employment activity performed in Hungary can qualify as domestic-source income, even if it is paid from abroad. In the case of income paid from abroad, income tax can be due whether or not the income has been transferred (e.g. electronically, by bank-to-bank transfer) or brought into the country in cash.”     - PwC
If you pay income tax in Hungary, there are several exemptions that allow you to pay less or no US income tax on the same income to the IRS. The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a Hungarian resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you've paid in Hungary. These exemptions can be combined if necessary. Remember though that even if you don't owe any tax to the IRS, if your income is over US$10,000 (or $400 if you're self-employed) you still have to file a federal return.
 
The US and Hungarian governments share taxpayer info, and Hungarian banks pass on US account holders' account info to the IRS, so it's not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.
If you're a US citizen, green card holder, or US/Hungarian dual citizen, and you have been living in Hungary but you didn't know you had to file a US tax return, don't worry: there's a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don't delay though, in case the IRS comes to you first.
 
Hungarian taxes – what you need to know
Hungarian residents are taxed on their worldwide income at a flat rate of 15% for all income types. Non-residents are only taxed on Hungarian sourced income.
 
Foreigners living in Hungary are considered a resident for tax purposes if their permanent home or center of vital interests is in Hungary, or if they spend over 183 days in Hungary in any 12 month period that overlaps with the tax year.
 
The Hungarian tax year is the same as in the US, which is to say the calendar year. Income tax returns are due by May 20th, though an extension is available until November 20th. Spouses are required to file separately. The Hungarian tax authority is called the National Tax and Customs Administration.
 
We strongly recommend that if you have any doubts or questions about your tax situation as a US expat living in Hungary that you contact a US expat tax specialist. 
 
At Bright!Tax, we have clients in over 150 countries worldwide. US expat tax is all we do and we are very good at it. If you have any questions regarding your personal situation, don't hesitate to contact us and we'll be happy to help.
Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.
Picture
]]>