Larry's 2011 Tax Guide for U.S. Expats & Green Card Holders....in User-Friendly English!. Laurence E. 'Larry'

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СКАЧАТЬ If you have dependents living with you and are not married, there are some tax advantages and some tradeoffs in filing as HOH. True, you are going to get an $US8,400 standard deduction for 2010 but in the process, you will lose the exemption for the person qualifying you to take HOH. Speak to your tax advisor about which is better for you : either HOH or MFS, if you have dependents.

      O.K. After you've taken your standard (or itemized deductions if you have a large enough amount to itemize and it is to your advantage) deduction, then you can take a personal exemption for you and an exemption, as well, for all those who qualify as your dependents for whom you list both names, relationship and either Tax Identification Number - TIN - or Social Security Number - SSN. If you do not have that number available and you are liable for taxes, the IRS will not allow you the exemption without getting that number....so you'd better apply for one! Go to the IRS site and download Form W-7 and the instructions for that form – you’re going to have to file this form and commensurate back up papers, along with your tax return for the year to a ‘special’ address in Philadelphia, PA to get that TIN. A special word of advice: The IRS loses things – make sure you have copies of everything that you file when you apply for the TIN – you might have to file again…and again…and again. Alas, the tax bureaucracy in the U.S. is not what it might have previously been – papers filed get lost far more frequently than the IRS will ever willingly admit!

      Aha! We've now arrived at your taxable income........now you have to compare this with what your Alternative Minimum Tax - AMT - might be and you’re going to have to pay the higher amount. Soon to follow, just a mere two sections following this section of the book, is a user-friendly explanation of what the Alternative Minimum Tax is. I guarantee you this: As soon as you read it, you will understand what the AMT is....yet a week later, you'll have to reread this, to remember what it is.....Sadly, the AMT is a tax that simply defies memory retention!

      Regardless, from the this point on, there are various and sundry credits to which you might be eligible for, which will reduce your tax bill - if you owe any taxes.....and if you are a self-employed sole proprietor, reporting your income and expenses on a Schedule C, even though you may be eligible for the foreign earned income exclusion, you are going to be liable for Social Security and Medicare taxes which, for the 2010 tax year, will equal 15.3 percent of your taxable Schedule C income. This is frequently a very rude awakening for some! (please note: that ‘final’ tax act of 2010 will lower the individual’s 2011 social security payment by 2 percent, for one year, only, in 2011....but that 15.3 percent is very painfully applicable to 2010!!!)

      And now, for the very first time - at least as far as I know - your expat 2011 U.S. tax calendar:

      1 January 2011 The tax year begins for individuals who are on a calendar year (come on, now - we're all calendar year taxpayers, whether we like it or not!). The 'Entire taxable year' begins on January 1. You are on a ‘cash basis’ for tax purposes – if you receive any income in the calendar year, you’ll have to include it during that year. If you ‘earned’ income that you did not receive until the next year (payments that should have been made to you in 2010 that you did not actually receive until some time during 2011?), then don’t worry about that income – it’ll be part of your 2011 taxable income – unless you receive a Form 1099 which includes that income…..

      15 January 2011 - This date is the deadline for final payment of estimated federal income taxes for the last voucher of the 2010 1040ES.

      31 January 2011 - You can 'technically' avoid that 15 January deadline for payment of estimated taxes if you actually file your final tax return and pay final taxes by 31 January. How you are going to do this, though, when the likelihood that the forms you are going to need to file correctly, will simply not have been issued by this date?

      15 April 2011 - Ah, you've all heard of this day - it is tax day, across the land, except for Massachusetts, where they run the Boston Marathon as part of their Patriot's Day holiday, entitling you to file one day late.

      Your first quarter, 2011 1040ES is due on this date

      Your IRA payment just might be due by this date

      Generally, this is the date for filing form 1040 unless you are on extension....gift tax returns are also due on 15 April and it is also the final date for filing an amended tax return for the third previous tax year.

      15 June 2011 - this one is important for expats! This day, my friends, is the deadline for filing the 2010 tax return. You'd better file it - and have proof of mailing as 'insurance', or you'd better file an extension of time through 15 October to file. You'll still have interest due and underestimated penalties if you underestimated your prepayments and filed under extension, before your extension deadline, but you'll avoid some very costly penalties by filing your extension request - this extension form is virtually automatically approved. Oh, you can be the first to be penalized in this instance, if your extension application is denied - but I doubt it......! If you are a first time overseas filer, this is also the best date to file a specific form (2350) for filers who simply want to wait until they qualify under the physical presence test (we'll cover this one, later in the book!) in order to take advantage of foreign exclusions.

      And...it is also the day for filing voucher #2 of the 1040ES.

      30 June 2011 - Treasury Department Form TDF90.22-1 must be filed by this date.

      15 September 2011 - Voucher # 3, third quarter payment of your 1040ES is due, today, if you are going to owe anything for 2011 - time to pay...!

      15 October 2011 - Contrary to what the IRS or your accountant might lead you to believe, you definitely can file for further extension through 15 December – but you’d better do this before 15 October. Personally, I try to avoid anything dealing with tax after 15 October (because I value my sanity and, after 4+ decades of doing tax work, I really need to cut off by 15 October!!!) but the IRS will still allow you those extra two months if you file that additional extension.

      31 December 2011 - The year's over - new income tomorrow? Worry about it next year!!

      What’s this - you say that in spite of reading this you still have no idea of the tax system? Well, apparently, neither does the IRS Commissioner, who has someone else prepare his tax return.

      Once again (yes, I know I’m repeating myself!) I propose that henceforth and forever more, it be made mandatory that all future IRS Commissioners must self-prepare their own returns, returns that are to immediately be audited, with instantaneous penalties assessed upon that IRS Commissioner preparing his return.....if nothing else, we’d finally get the head honcho of the IRS feeling a bit more sympathetic to the helplessness that the rest of the American public has to go through with this very user-unfriendly system!

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