Bright!Tax US Expat Tax Services
Expats Who Haven’t Filed US Taxes Can Catch Up and Still Receive a Stimulus Payment
Monday, May 25, 2020 9:30 AM
NEW YORK, NY / ACCESSWIRE / May 25, 2020 / Due to America's unusual tax system, all American citizens, including Americans living abroad, are required to file US taxes, reporting their global income.
For expats, this often means having to file two tax returns, one to the IRS and another in the country where they live.
Expats often also have additional US filing requirements, such as reporting any foreign registered bank accounts, investments, and foreign business interests they may have.
International tax treaties don't prevent US expats from having to file. Instead, to avoid double taxation, the IRS has introduced provisions such as the Foreign Tax Credit and the Foreign Earned Income Exclusion that expats must claim when they file. After having claimed them, most expats won't end up owing any US tax.
Expats who don't file and claim these provisions though are considered to owe US tax on their worldwide income, even if they're paying foreign taxes.
What about the many expats who haven't been filing US taxes from abroad because they weren't aware of (or misunderstood) the requirement for them to do so?
There is a voluntary IRS amnesty program called the Streamlined Procedure available to these non-compliant expats that allows them to catch up without facing penalties.
The program requires non-compliant expats to file their last three US tax returns, and their last six Foreign Bank Account Reports (FBARs). They must also submit a statement explaining why they haven't previously filed.
Expats catching up under Streamlined Procedure can claim the Foreign Tax Credit or the Foreign Earned Income Exclusion retrospectively, allowing them reduce their back taxes (often to zero). Some expats (such as expats parents who claim the refundable Child Tax Credit) may even find that they're owed a refund.
Expats who catch up with their US filing using the Streamlined Procedure can also receive a Coronavirus Relief Stimulus Check.
Due to the Coronavirus outbreak, expats who are up to date with their US tax filing can receive a Coronavirus relief Stimulus Check, a one time payment in 2020 worth up to $1,200 for an individual, or $2,400 for a married couple, and a further $500 per child.
While every expat's situation is different, and expats should always seek professional advice to ensure that they file in the most beneficial way for their particular situation, the Streamlined Procedure presents an excellent opportunity for the many expats who haven't been filing.
Company Name: Bright!Tax US Expat Tax Services
Contact Person: Hugo Lesser
Email: [email protected]
SOURCE: Bright!Tax US Expat Tax Services