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 easy but instead, the government has given this a URL that simply cannot be memorized!

      15 September 2016 Voucher # 3, third quarter payment of your 1040ES is due, today, if you are going to owe anything for 2016 - time to pay...!

      15 October 2016 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 nearly five 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 2016 The year's over (even though it is a Saturday, this one does not carry over until 2 January) - 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 most of America!

      Why? Will it ever change?

      Tax rules applying to you, the expatriate U.S. tax filer

      O.K. Here we go: these are the rules…..the tax rules applying to you, the expatriate U.S. tax filer (the real ‘nuts and bolts’ reason you’ve probably justified buying this book). We’ve updated where updates are necessary. Otherwise, we left this section pretty much the same as that of last year and the year before that, etc, because it works! If it works, don’t screw with it, only tweak it, as necessary, based upon current law changes, $$ changes, etc, etc, etc

      Here’s my ‘executive summary’ of the most important stuff - these are the absolute basics - at least read these because they are ‘unchanging’ - I used them in my first book (The Tax Analects of Li Fei Lao) and I used them way back in the early 1990s, when I printed out my first brochure for expats. Yeah, some of it will be boring but if reading that boring stuff can save you some money, then read it!!

      *If you are a U.S. citizen or resident alien and meet minimum income standards (anything above your standard deduction plus exemptions), then you are liable for filing an annual U.S. income tax return, regardless of where you are living or where you income is derived. If you are single, you have a 2015 standard deduction of $US 6,300 plus an exemption of $US 4,000, meaning that for all intents and purposes, if your income is under $US 10,300, you don’t have to file….. unless you have self-employment income over $US400 or have to provide Part 3, Schedule B information, then, you’ve got to file regardless of your income.

      *The United States taxes on worldwide income. You are required to file a tax return if your income is above minimum requirements even though you do not owe anything. Yes, there are perks for overseas filers - there’s a foreign earned income exclusion, there’s also a foreign housing exclusion. Yet take a look at the costs of living overseas and in many locations where that housing exclusion is not enough. I have an apartment in Hong Kong. I love that apartment but realize at some point of time I will lose it because the cost of real estate is rising beyond their current, stratospheric levels. Unless you’ve experienced the costs of real estate outside of the U.S. it is truly difficult to conceive of how essential that foreign housing exclusion is. But my friends in Hong Kong who come from other countries don’t have a foreign earned income or housing exclusion because they are not taxed on the income they earn outside of their home country. Hell, as valid expatriates, they don’t even have to file!

      *Warning: FATCA seems to directly bypass current law with provisions that extend the statute of limitations to 6 years for 'substantial omissions'. Would you care to guess what the IRS deems to be a substantial omission? How about $US5,000 and/or 25 percent of reported income derived from offshore assets. Frankly, if the IRS sincerely believes that $US5,000 is substantial, then the U.S. economy is in far deeper a hole than any of us could have ever imagined! Yet what does that mean to you the potential tax filer living overseas who might have under that $US 10,300 reporting threshold but over $US5,000 from overseas……are you subject to those extortion-like FATCA penalties if you don’t file?

      *Yes, the U.S. is an ‘exception’ to most countries because of its worldwide taxation and filing requirements. Don’t bitch and moan about it, there is nothing you can do about it. You want to file, though, because if the IRS ever enquires about where your tax returns are, before you’ve filed, you are likely to lose that foreign earned income exclusion and housing exclusion, making it a very costly ‘experience’ for non-filers!

      *If you are paid by a U.S. employer, from a U.S. corporation, with an annual W-2 issued to you, you are likely going to be subject to withholding for both taxable earned income plus Social Security taxes. Based upon your overseas residency, though, you are still eligible for the foreign earned income exclusion.

      *If you are not paid by a U.S. employer and expect to have a tax liability over and above your exempt earned income and housing exclusion (and we’ll get to those exclusionary amounts later on), then you are going to be responsible for filing quarterly estimated tax filings and payments. If these payments are late, then you will have late payment penalties, too!

      *You have an automatic extension through 15 June, just because you live outside the U.S. and you can get a virtually automatic extension of time to file through 15 October of the succeeding tax year but if you owe the IRS anything, you are going to have to pay interest to the IRS (and perhaps, underestimation payment penalties, too!). These start accruing 16 April - so you are not totally off the hook by filing extensions....You can also get an additional extension of time to file through 15 December. While this is not ‘automatic’, I have rarely seen anyone turned down if they apply on a timely basis for these additional two months.

      *If you have a bank account overseas - and if you are living anywhere in the world, let’s face it, you are likely to have a local bank account - or several - or a brokerage account overseas, the Department of the Treasury wants you to tell them about these accounts in an annual form that has to be filed by 30 June of the subsequent year for which you must efile before 30 June 2016 for your 2015 calendar year/U.S. tax year. FinCEN114 is the name of the form. FinCEN does not stand for ‘financial center’ it stands for Financial Crimes Enforcement Network. From what used to be an information return paper filed with the Detroit, Michigan IRS Service Center is now a mandatory form that can only be efiled. If you use a Mac, you can’t always access the system with ‘regularity’ because not only is FinCEN114 not readily accessible with an Apple computer but if you are in Windows, and do not use Internet Explorer, you’re going to have problems, too. True, there is marked improvement this year over last year but this, in my opinion, is still pathetically below the standards that we should expect.

      *If you need to find out something about the IRS, go to their site: www.irs.gov. If you need to sign up for Obamacare, go to www.healthcare.gov. Fine. You can easily remember these URLs. How about this one: http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html. That’s how you access and file FinCEN114! Think you can remember this? Who is the responsible party for allowing a URL like this? How the hell can you be ‘user friendly’ and have compliance when, you make it difficult to comply - assuming, of course, that you even know that you are supposed to comply?

      *In essence, for every country where you have an account or accounts totaling $US10,000 or more, then all bank and brokerage names, addresses, account numbers and the highest amount, in U.S. dollar equivalent, at any one time during 2015 must be listed for that country. Yes, you can file this form late or you can file an amended return – there is a place for you to explain why you are doing this. Seriously: СКАЧАТЬ