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'

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СКАЧАТЬ edition of this form, Form 2555EZ have their URLs listed within this book, enabling you to go directly to the IRS website to download these forms and their instructions – assuming, of course, that you are reading this while you are online……otherwise, simply remember www.irs.gov - hey, that’s an easy site to remember!

      And now we come to the classifications under which you fall for tax reporting purposes. There are four categories into which you basically ‘fit’ and these categories each determine the amount of your standard deduction.

      *MFJ - Married Filing Jointly, or QW - Qualified Widow (hopefully, you do not come under the Qualifying Widow/Widower category but if you do, then there are tax benefits) will be able to take an additional deduction amounting to $US12,600 from your income in order to arrive at your taxable income.

      *Single Not married? This is your category. Yes, you can still have dependents, but you would generally be filing as a single taxpayer, entitled to a $US6,300 standard deduction, half the amount that a married couple gets.

      *MFS Married Filing Separately If your spouse is not a citizen of the U.S., then

      you have an interesting option vis a vis reporting responsibilities - especially if you own little but your spouse is ‘loaded’. If you have a non-U.S. citizen spouse with substantial assets and income, he or she simply might not want to report to the IRS. Frankly, there are many expats or green card holders who have income producing assets and have placed those assets in spousal name to ‘escape’ reporting. Alarmed at putting it all in your spouse's name? Don't be: even the things I owned were no longer mine, so long ago in an equal division of property California divorce where equal division meant that my ex got all the assets while I got all the liabilities. If you file MFS, you've got a $US6,300 standard deduction for 2015.

      *HOH Head of Household If you have dependents living with you and are

      not married, there are some tax advantages and some trade-offs in filing as HOH. True, you are going to get an $US9,250 standard deduction for 2015 with HOH status but in the process you do give something up i.e. the exemption for the person ‘qualifying you for 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 Austin, Texas 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.

      For an explanation of what the Alternative Minimum Tax is, go to that very specific section, in my 2015 edition. I wrote a gem of an explanation for which 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 re-read 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. Thus, if you are a sole proprietorship, plan to set aside that additional 15.3 percent of your taxable Schedule C income. This social security tax obligation for the self-employed is frequently a very rude awakening for the ‘uninformed’…..if you fall into this category, consider yourself forewarned!

      Your expat 2016 U.S. tax calendar:

      1 January 2016 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 (which fell on a Friday in 2016). 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 2015 that you did not actually receive until sometime during 2016?), then don’t worry about that income – it’ll be part of your 2016 taxable income – unless you receive a Form 1099 which includes that income…..

      15 January 2016 This date is the deadline for final payment of estimated federal income taxes for the last voucher of the 2015 1040ES.

      31 January 2016 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. But wait – that’s a Sunday! O.K., you’re off the hook for another day……and your filing date for this instance is actually 1 February 2016!!!

      18 or 19 April 2016 – NOT 15 April 2016!!!!! Because of the weekend and the fact that Washington, DC has its Emancipation Day holiday, tax day, across the land, except for Massachusetts and Maine and their Patriot's Day holiday, entitling those residents to file on Tuesday, 19 April 2016.

      Your first quarter, 2016 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 18 April, this year and it is also the final date for filing an amended tax return for the third previous tax year.

      15 June 2016 this one is important for expats! This day, my friends, is the

      deadline for filing the 2015 tax return. You'd better file it - and have proof of mailing as 'insurance', or you'd better file an extension of time through 17 October to file ( another weekend allows you more time and, if you have sent in a proper letter request from overseas subsequently, an additional 2 months to 15 December) You'll still have interest due and underestimated penalties if you underestimated your pre-payments 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 2016 – Did you efile your FinCEN114 by today? You are late, otherwise. Want to find out more? Read that part СКАЧАТЬ