Living abroad brings its own set of adventures and challenges, especially when it comes to navigating U.S. tax obligations. If you’re an expat with a financial footprint across borders, you’ll need to familiarize yourself with IRS Form 8938, a key component of the Foreign Account Tax Compliance Act (FATCA). What is Form 8938? Form 8938, titled “Statement of Specified Foreign Financial Assets” is a tax form required by the U.S. Internal Revenue Service (IRS) for taxpayers to report their specified foreign financial assets if the total value of those such foreign bank assets exceeds certain thre ..read more

Navigating the intricate world of expat taxes presents unique challenges and reporting obligations for self-employed U.S. citizens living abroad. Understanding the nuances of foreign income, tax treaties, and self-employment taxes is crucial for maintaining compliance with the IRS while optimizing financial health. What Constitutes Foreign Self-Employment Income? Foreign self-employment income refers to the income earned by self-employed individuals who work outside of the United States. The IRS defines self-employment income as any income earned through a trade or business when you are a sole ..read more

For US expats ready to renounce their citizenship, understanding the final legal and tax steps is essential. Form 8854, the Initial and Annual Expatriation Statement, marks the conclusive stage in breaking ties with the U.S. tax system. At 1040 Abroad, we specialize in navigating the complexities of Form 8854, offering the insights needed to finalize your departure from U.S. tax obligations confidently. This article is your definitive guide to completing Form 8854, the ultimate step in your expatriation journey. What is Form 8854? Form 8854 is a tax form used by long-term residents relinquishi ..read more

Navigating the complex landscape of U.S. tax regulations can be a daunting task, especially for individuals who split their time between the United States and other countries. One crucial concept that frequently comes into play is the Substantial Presence Test (SPT). This test is a critical determinant used by the Internal Revenue Service (IRS) to assess tax liability for individuals who are not U.S. citizens or green card holders but spend significant time in the U.S. This article aims to provide a clear and detailed guide on the Substantial Presence Test, elucidating its criteria, implicatio ..read more

As a US expat, you’re accustomed to navigating the complexities of living abroad. But there’s one opportunity you don’t want to miss – claiming your federal stimulus checks, also known as Economic Impact Payments, which can amount to up to $3,200. The final deadline is looming: June 15th, 2024. This is not just another date on the calendar; it’s your last chance to access funds that could significantly support your life overseas. In this article, we’ll guide you through the essentials of becoming compliant and how to claim what’s rightfully yours. Remember, it’s now or never! What Are Stimulu ..read more

As the year 2024 approaches, individuals and businesses need to be aware of the upcoming tax changes that will impact their financial planning. From adjustments in tax rates to updates in deductions and credits, understanding these changes can help taxpayers prepare and make informed decisions. In this overview, we will discuss the key tax changes that will take effect in 2024, providing insights into how these revisions may affect your tax liability and overall financial situation. Stay informed and stay ahead of the game by keeping up with the latest developments in tax laws and regulations ..read more

If you’re one of the many Americans who has fallen behind on your taxes, now is the perfect time to get caught up and potentially receive a significant amount of money. It is estimated that 9 to 10 million people who have not yet received their stimulus payments are still eligible. Are you one of them? The cost of becoming compliant, such as hiring a professional to help you with your taxes, can be covered by the money you receive from the stimulus check. In fact, you may even have money left over after paying for compliance costs. This is especially important for those who are considering ren ..read more

The US-Canada Tax Treaty can be helpful for Americans living in Canada, although not as valuable as it would be to non-citizens (due to the savings clause). This article will shed light on the treaty’s main provisions and how they affect U.S. citizens residing in Canada. Do I have to pay U.S. income tax if I live in Canada? Americans living in Canada must file a U.S. expatriate tax return with the Internal Revenue Service (IRS) each year as long as they meet certain income and filing requirements. The United States taxes its citizens on their worldwide income, regardless of where they liv ..read more

Did your cryptocurrency investments decrease in value this year? Don’t fret. You could realize those losses and use them to reduce your US taxes. You can then re-buy the crypto right away at the current market rate. This is known as tax loss harvesting and can be done with crypto holdings. This tax optimization strategy can save you a lot of money, even for future years. What is Tax Loss Harvesting? And how does it relate to Cryptocurrencies? Tax Loss Harvesting is a system Used To Offset Your Capital Gains by decreasing your taxable income. Cryptocurrency tax loss harvesting means selling yo ..read more

As we approach 2024, it is essential to be mindful of US tax deadlines to organize yourself and avoid unnecessary penalties and interest for late or non-compliant filings. To get advice on your US tax filings in 2024, you can schedule a free call with us. Instead of listing the deadlines by month, we made groups for them by target group. Individual Taxpayers April 15, 2024 – This is the due date for individuals to file their 2023 tax return and to pay any tax due. Taxpayers outside the US get an automatic 2-month extension to June 15. Regardless of whether you are given this extensi ..read more