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U.S. Tax Returns

Tax returns for expats made simple

We specialize in the preparation of U.S. Tax Returns for U.S. citizens who reside abroad. We have been helping with U.S. Tax Returns and other U.S. tax matters for over 50 years. Our procedures are designed to make Tax Return preparation as easy and painless as possible while at the same time assuring that you benefit from all the deductions, exclusions and credits to which you are entitled.

All U.S. Citizens are required to file U.S. taxes, wherever in the world they live.

Expats have an automatic filing extension until June 15th, with a further extension available until October 15th upon request.

If you earn over $10,000, or just $400 of self-employment income, you are required to file, regardless of where their income is earned, where in the world you live, whether the U.S. has a tax treaty with the country, or whether you also pay foreign taxes.

There are some IRS exemptions just for expats that allow them to reduce or in most cases eliminate their U.S. tax liability completely; although you still have to file a US return to claim these exemptions.

The most commonly used exemption for expats is called the Foreign Earned Income Exclusion (Form 2555 FEIE) which allows expats to exclude the first $102,100 in earned income from US tax liability. Expats who pay foreign taxes meanwhile may benefit from claiming the Foreign Tax Credit (Form 1116 FTC), which gives a $1 tax credit for every dollar of tax paid abroad. If you pay foreign taxes at a higher rate than the U.S. rate, which it is the case of Spain, then you will have excess credits left over than can be carried forward for use in the 10 subsequent years.

The tax preparation process may be summarized in the following 3 steps:

  1. You send us a copy of your Tax Return for last year (Form 1040 or Form 1040NR) and a copy of the Tax Return on the country in which you reside; copies of Forms 1099 (Interest and Dividends), Forms SSA-1099 (Social Security Pensions), Forms K-1 and any other income sources. If you have any additional information you think may have tax consequences send it with the other information. You can send all the information by certificate mail, email or the best and secure method is to upload them through our website.
  2. We review the data and contact info for any additional necessary information. We prepare your return and notify you once it is prepared. We, then, give you the results and request payment of the fee.
  3. Your return is sent to you for review, to be signed and submitted to the IRS.  Alternatively, if you would prefer to complete a detailed questionnaire in lieu of Step 2 above, please, download our Tax Organizer from the download menu of this website.

We also prepare U.S. Tax Returns for non-resident aliens (Form 1040NR), U.S. Gift Tax Returns (Form 709), U.S. Estate Tax Returns (Form 706), Income Tax Returns for Estates and Trusts (Form 1041) and State Tax Returns.

Other Forms required

With the 1040 Individual Tax Return, you must attach other forms depending on your assets abroad and/or in the U.S., depending if the following conditions apply to you:

    1. Form 8938 is used to report your foreign financial assets if the total value of these assets exceeds your threshold amounts. The threshold amounts for overseas taxpayer’s foreign financial assets are:
      1. For unmarried taxpayers and married filing separately, if the total value is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.
      2. For married taxpayers filing a join return, if the total value is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.
    2. Form 5471 is used by officers, directors and/or shareholders (more than 10%) of certain foreign corporations, to report the current status of the foreign corporation.
    3. Form 8621 is used by shareholder of a Passive Foreign Investment Company (PFIC) or Qualified Electing Fund (=Fondos de inversión en Europa). A single Form 8621 must be file for each Mutual Fund. Remember that the increase of value during the year will be taxed as ordinary income. Pension funds are excluded from the Form 8621.
    4. Form 8960 Net Investment Income Tax. You might be liable for a 3.8% Net Investment Income Tax on the lesser of their net investment income, or the amount by which their modified adjusted gross income exceeds the statutory threshold ($250,000 for Married filing jointly, $125,000 for Married filing separately and $200,000 for Single or head of household).

 

Streamlined Filing Compliance Procedure for delinquent filers

The IRS streamlined filing compliance procedure describe below is available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part. The streamlined procedure is designed to provide to taxpayers in such situations with:

A streamlined procedure for fling amended or delinquent returns, and Terms for resolving their tax and penalty procedure for filing amended or delinquent returns, and Terms for resolving their tax and penalty obligations.

As reflected below, the streamlined filing procedures that were first offered on September 1, 2012 has been expanded and modified to accommodate a broader group of U.S. taxpayers.

Taxpayers must certify that conduct was not willful. Taxpayers using either the Streamlined Foreign Offshore Procedures, will be required to certify, in accordance with the specific instructions set forth below, that the failure to report all income, pay all tax and submit all required information returns, including FBARs (FinCEN Form 114, previously Form TD F 90-22,1) was due to non-willful conduct.

The streamlined procedure can be very beneficial for taxpayers because they allow the taxpayer to comply with income tax rules and regulations in a relatively easy manner. The streamlined foreign offshore procedure will protect the taxpayer from having to pay various penalties, including the failure-to-file penalties, failure-to-pay penalties, accuracy-related penalties, information return penalties, and FBAR penalties. This protection from penalties will remain in place even if the amended tax returns are later selected for audit, unless the IRS demonstrates that the original tax noncompliance was fraudulent or that the failure to file FBAR reports was the result of willful behavior. However, if, during the course of the examination, the IRS determines that an additional tax deficiency is due by the taxpayer, the taxpayer may at that point be subject to any applicable taxes and penalties for that additional deficiency.

U.S. taxpayers eligible to use the Streamlined Foreign Offshore Procedures must:

  1. For each of the most recent 3 years for which the U.S. tax return due date has passed, file delinquent or amended tax returns, together with all required information returns (e.g., Forms 5471, and 8938) and
  2. For each of the most recent 6 years for which the FBAR due date has passed, file any delinquent FBARs (FinCEN Form 114, previously Form TD F 90-22.1).

 

Contact Us

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info@ustaxconsultants.net

+34 915 194 392 | +34 915 196 566 | +34 913 623 701

Travesía de las Cañas, 2 - 28043 Madrid, España.

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Skype: M-T: 5pm-8pm

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