How Much Do You Know About Tax For Expats?

How much do you know about Tax for Expats? by Nick P.Tax for expats is mandatory if you are an American citizen living abroad. If you do not reside in the United States, you are required to pay taxes on income and other investments made while living outside of the United States. This Expat tax can be confusing. It can also result in large fines and penalties if it is not filed correctly and on time. When it comes to taxes, it may be in your best interested to work with a professional who is familiar in this area and with what can and cannot be taxed. The fees you will pay to a professional may be minimal compared to what you may have saved, or even compared to what you may avoid in fines from incorrect paperwork. This is a tax that can be filed on your own, but if you do, be fully aware of what you own that is taxable and what is not.Foreign Bank AccountsThere are very strict tax for expats rules around owing a foreign bank account. These rules will carry more weight depending on how much income you have or have generated with these accounts. Even if you are not taxed on your account, you still need to report both the account and the money in it to the IRS. The money in your account will fall into a certain classification, and your tax will be a result of that category. The IRS will also want to know where this money came from and if any income, such as interest, was earned on it.Self EmployedIf you are self-employed, working, and if you own a foreign company, then you are required to pay the IRS their required tax for expats on your income. This is in addition to the payroll and taxes of the country you live and work in. Your income is of interest to America, and you will be taxed accordingly. This same rule applies for shares and partnerships. If you have invested or have shares in a company but do not directly pay employees, you are still required to pay the IRS taxes based on your company and its revenue.How Long have you Truly Been Away?When it comes to tax for expats, your status as an American Citizen versus your status as an International Resident will depend on a lot of factors”mainly where your main assets, such as your residence, are; how long you have been in or out of America for; visits in and out of the country: all of these factors count towards your residence and therefore your taxes. It is very important to be well versed in residency requirements in order to keep this part of your taxes in order.Even if you do not believe you owe taxes, you still need to file your tax paperwork. The United States has treaties with the majority of the international counties. This treaty allows the exchange of the residents living abroad. It is not as simple as vanishing overseas. While living abroad definitely has its benefits, you cannot abandon your ties with the IRS. If you are considering living abroad or have even made this move, talk to a tax for expats professional. Their insight can save you both time and money in this complicated manor.Esquire Group, a boutique international tax advisory firm specializing in tax consulting, tax planning and compliance and helping corporate and individual taxpayers with Offshore Voluntary Disclosure Program, asset protection, and tax consulting for US expats. To learn more about us, visit EsquireGroup.com/about.Article Source: eArticlesOnline.com