Understanding U.S. tax obligations, including filing obligations, is essential for nonresident aliens, especially those who earn “U.S.-sourced income” through investments or employment in the U.S. It’s crucial to be aware of the requirement to file the correct tax forms by their deadlines to avoid significant penalties or missing out on a refund. Many nonresidents are unfamiliar with the intricacies of the U.S. tax system and the specific filing obligations, such as the need to file a tax return if engaged in a trade or business in the U.S. Form 1040-NR plays a crucial role for individuals wh ..read more

Is it too late to get your stimulus check? For many, the answer is no, but the clock is ticking. Whether you’re a U.S. citizen living abroad or someone who hasn’t yet filed, you need to act swiftly to meet the IRS deadline and claim what you’re owed. Key Takeaways U.S. expats must file their 2020 and 2021 tax returns by June 17, 2024, through the IRS Streamlined Procedure to claim missed stimulus checks without penalties. To be eligible for stimulus payments, individuals must meet criteria such as having a Social Security number, income thresholds, and not being claimed as a dependent on som ..read more

If you’re an American living abroad, understanding the intricacies of the US tax system is crucial. This guide aims to simplify the tax filing process for you, highlight the important deadlines for 2023, and shed light on various deductions and credits that can be financially beneficial. Staying informed and compliant with US tax laws is essential as you embark on your international lifestyle. Key Takeaways US expats must file tax returns if their income exceeds certain thresholds and report foreign income in US dollars. The 2023 tax deadline is April 15, with an automatic extension to June ..read more

Navigating the complex landscape of tax regulations, particularly for U.S. expats, requires the expertise of skilled tax professionals. Understanding the differences between various tax experts such as Certified Public Accountants (CPAs), who often work for public accounting firms, and Enrolled Agents (EAs) is crucial for individuals and businesses to make informed decisions when selecting the right professional for their specific tax situations. Designation Enrolled Agent (EA) US CPA Foreign accounting designations Percent of required curriculum in US tax 100% 20% Zero Work experienc ..read more

Understanding the Foreign Tax Credit (FTC) is crucial for U.S. expats looking to reduce their tax liabilities. This guide offers a detailed examination of the steps required to qualify for, calculate, and claim the FTC. It aims to help you maximize this tax advantage. We’ll discuss everything from the basic eligibility criteria to advanced tactics, providing practical examples and expert insights to enhance your tax return strategy as an expat. What Is the Foreign Tax Credit? Definition and Purpose The Foreign Tax Credit (FTC) is designed to help U.S. taxpayers avoid the double taxation of inc ..read more

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