Larry's 2016 U.S. Tax Guide 'Supplement' for U.S. Expats, Green Card Holders and Non-Resident Aliens in User Friendly English. Laurence E. 'Larry'

Чтение книги онлайн.

СКАЧАТЬ on a new, efiled form that is difficult, at best, to access. Read on, my friends – there’s a section of this book that covers this area.

      • I am a U.S. government employee. Am I affected by these exemptions and deductions when I work outside of the U.S.?

      Generally, no. You are treated like all U.S. citizens living in the U.S. Some cost of living and foreign area allowances might be excludable but by and large, you’re not going to get any tax advantages working overseas.

      • I am not employed by the U.S. government – I am not a government employee. But I do earn income from the U.S. government. Do I qualify for exclusions and deductions?

      Yes!

      • Can I claim the housing deduction or exclusion for two foreign households if I cannot take my family to my new employment location because of adverse conditions? Can I house my family nearby so I can visit them regularly?

      Yes! Under these circumstances, expenses for the second household may be included in your reasonable-foreign housing expenses.

      • Is it possible to use my foreign income tax as a deduction under itemized deductions instead of a credit if it would be more advantageous?

      Of course you can – but you have to make that choice! Remember, the chances are that you are not going to have a large mortgage interest deduction, living overseas. Consequently, the chances of your being able to advantageously use itemized deductions over the standard deduction are going to be very difficult. And remember – you cannot claim a deduction for foreign taxes paid on the income excluded under the foreign earned income exclusion or housing exclusion. Thus, unless there are ‘exceptions’, plan on using the standard deduction and the foreign tax credit!

      • Because of the differences between the U.S. tax year and the tax year of the foreign country I currently reside in, I cannot be certain, now, that the choices I make regarding tax credits or tax deductions are the best ones for me. Can I change my mind?

      Yes, you can! Simply file an amended tax return within three years of the due date of the tax return in question or within two years of the date you paid the U.S. tax.

      • Apart from the special exclusions for foreign earned income, will I apply the rest of U.S. tax rules the same way as I did when I lived in the states?

      Alas, no. Unfortunately, areas of U.S. tax laws draw a distinction between taxpayers inside and outside of the U.S. In many cases, this is an economic disincentive to living and working abroad. For example, contributions to foreign charities generally cannot be deducted. If you own rental property overseas, you are subject to entirely different depreciation rules and regulations than you have back home in the states.

      • Can I pay my taxes in a foreign currency?

      Sorry, my friends – check or credit card, only – the U.S. government does not accept foreign currencies – and you might have difficulties, as well, with foreign cashiers checks. – if you are that Hong Kong teacher, recently moved from the U.S. – do not close your U.S. bank account – it will come in handy, in the long run!

      * What happens when I move back to the U.S. to reside with my non-resident, foreign spouse, who has all of the family business and investments in her/his name?

      Don’t walk - run - to a specialist before you decide you want to live back in the States. There are some serious tax problems you are going to be confronted with in an all too familiar scenario that has become a nightmare for many who did not plan.......!!! This is planning you need – you are going to have to pay more – a heck of a lot more – for this planning than the cost of this book!

      * What happens if I haven’t filed in many years and I have been told that it is hell to get back into the system?

      Read the section about the Streamlined Foreign Procedures about alternative for filing the past three years tax returns and six years FinCEN114. This brand new alternative is made just for you…..but take advantage of it, if you can, before they end allowing for this!

      The Form 1040-NR ‘Section’

      Why I never included this short nonetheless important section previously, I have absolutely no idea. Perhaps because I am now doing more Form 1040-NRs than ever, it’s time to rectify that prior omission. Why the change, now? It’s not just for those who have expatriated but still have investments in the U.S. but I have met more non-U.S. persons with U.S. bank and brokerage accounts who are anticipating withholding tax over and above what their actual taxes are, so they now wish to report and get their refund!

      On 1 December 2014, the Congressional Research Service issued a 9 page bulletin entitled “Federal Income Taxes and Noncitizens: Frequently Asked Questions”. Here it is, over a year later and sadly I have to state that not one question I assumed would be asked was asked. So you have an alternative, my friends, go to the 74 page set of instructions that accompany the five page Form 1040-NR http://www.irs.gov/pub/irs-pdf/i1040nr.pdf (finally published by the IRS on 14 January 2016) AND the form, itself (which, if this applies to you, you should look at) http://www.irs.gov/pub/irs-pdf/f1040nr.pdf …..or read on for my who, when, where, what, etc, etc, etc in much fewer words…..HOLD THE PRESSES: THERE IS NOW A 2 PAGE FORM 1040NR EZ AND A NEW, 34 PAGE SET OF INSTRUCTIONS FOR THIS FORM. IF YOU THINK YOU MIGHT BE ELIGIBLE FOR THIS FAR MORE SIMPLIFIED PROCEDURE, LOOK AT COLUMN ONE (AND NO MORE) OF THE ‘EZ’ FORM INSTRUCTIONS – YOU’LL KNOW, FAST ENOUGH!!!

      •Something new regarding the ITIN – the ‘Social Security Number alternative’: Your ITIN will expire of you do not use it on a U.S. income tax return for any year during a period of 5 consecutive years. Once your ITIN expires, you must reapply using Form W-7 http://www.irs.gov/pub/irs-pdf/fw7.pdf regardless of when it was originally issued. The IRS will begin deactivating ITINs this year, 2016.

      •Special rules for former U.S. citizens and former U.S. long-term residents: If you renounced your U.S. citizenship or terminated your long-term resident status (i.e. Green Card), you may be subject to different rules – look at page 9 of those 73 pages of instructions to verify whether or not you might be subject to these rules.

      •If you either have a Green Card or meet the Substantial Presence Test, you will have to file Form 1040, not the 1040-NR.

      •How the Substantial Presence Test is met: if you were physically present in the U.S. for at least

      o31 days during 2015 and

      o183 days during 2013, 2014 and 2015 using a chart with ‘multipliers on page 3 of the instructions – this can have a big impact upon your taxes, so you’d best take a look at this!

      •Who must file:

      oIf you are a non-resident alien engaged in trade or business in the U.S. during 2015, you must file Form 1040-NR regardless of whether or not you had trade or business or business-source income during 2015 or your income is exempt under tax treaty – no tax if no income but big penalties unless you tell this to the IRS!

      oHere’s a good example regarding who must file – direct from the middle of page 5 of the 2015 instructions: Mary is a nonresident alien individual. The only U.S. source income СКАЧАТЬ