Us expat taxes explained

The Documents You Need to Make Expat Tax Preparation Easy

US Expat Taxes Explained

Helping you piece together the Expat tax puzzle

US Expat Tax Preparation can sometimes feel like an

overwhelming process. It doesn’t have to be though!

Understanding what documents to provide to your

American tax services preparer for your US Expat

Taxes will make the process go smoother on both

sides.

IntroductionIntroduction


Tax QuestionnaireTax Questionnaire

When you engage an accountingpractice for your Expat TaxPreparation, you will likely beprovided with a “Tax Questionnaire.”This questionnaire will ask you toProvide basic information such as:• Name• Address • Identification Numbers and;• Dependent Information


• It will also ask you a series of questions about other activities in which you may have engaged that could have US Expat Tax implications.

• Although it is tempting to gloss over this form, filling it out properly upfront usually saves plenty of time and hassle in the long run!

• The thorough and attentive completion of this questionnaire is crucial to smooth Expat Tax Preparation.


Prior Year’s Tax ReturnPrior Year’s Tax Return

• It will supply a cross reference point for the basic information provided in the tax questionnaire.

• The preparer will also use it to compare against your current year return to look for drastic changes or potentially overlooked income or deductions.

• And to electronically file after your current year’s Expat Tax Preparation is complete.

Providing your prior year tax return will assist with your current year’s Expat Tax Preparation in many ways.


Travel CalendarTravel Calendar

A detailed Travel Calendar will help you:

• Determine all exclusions that are available to you.

• Determine your residency.

• Determine if any of your income is taxable in the US.


INCOME FOR YOUR INCOME FOR YOUR US EXPAT TAXESUS EXPAT TAXES


Wages, Compensation or TipsWages, Compensation or Tips

The most important document required for Expat Tax Preparation for self-employed are :

• Records of earnings• Records of deductions for the

calendar year.

Wages from an employer are typically reported to you on a W-2, P60, P45 or your host countries equivalent.


If you live in a country that does not have any income taxes you may need to:

• Self report your income and;• Potentially back it up to the IRS with bank statements or

something similar.


Interest or Dividend IncomeInterest or Dividend Income

Please provide the information on:• Interest and/or;• Dividend Income

These are typically provided on the Form 1099 or the foreign equivalent for Expatriate Tax Services.

Have one of these statements for each interest bearing account you maintained even if the account was closed in the current year.


Stocks and Other SecuritiesStocks and Other Securities

Generally, at the end of each year, your investment broker

will provide you with a statement detailing all stocks and

securities that were sold or purchased in the current year.

This information is necessary for your Expat Tax Preparation.

Please ensure that the statement supplies the original basis such as;• Purchase price plus any transaction fees paid of securities sold• The sale / purchase dates.


Real Estate TransactionsReal Estate Transactions

If you bought or sold real estate in the current year,

• The purchase price

• Date of the transaction and;

• The purpose of the property

If you own rental property,

• A financial statement detailing the income and applicable expenses.

The following may be necessary for your Expat Tax Preparation.


Distributions from Pensions, Annuities, Profit Distributions from Pensions, Annuities, Profit Sharing, IRA or Other AccountsSharing, IRA or Other Accounts

Withdrawals from your:• Pension• IRA• Equivalent Retirement Account(s)

are important to report to your

preparer for your Expat Tax

Preparation.

The financial institution or your employer will usually send you a 1099-R or equivalent for withdrawals at the end of each year.


Social Security BenefitsSocial Security Benefits

• Your preparer should also double check the Social Security agreement between your host country and the US as this can impact your US taxes Services especially if you are self employed.

• Social Security benefits will be reported to you via Form 1099 SSA

• This should be given to your preparer for your Expat Tax Preparation.


Other IncomeOther Income

If you have business, trust or partnership interests, you will

typically be provided with a Schedule K-1 or equivalent. Be

sure to send any miscellaneous income that may have been

reported to you on Form 1099 MISC or foreign equivalent.

Other sources of income required for your expat tax preparation

include unemployment reported via 1099-G or any alimony or

child support received.


DEDUCTIONS FOR DEDUCTIONS FOR YOUR US EXPAT YOUR US EXPAT

TAXESTAXES


Interest & Taxes PaidInterest & Taxes Paid

Interest that you paid on:• Mortgages• Student Loans

Taxes such as:• Foreign Income Taxes• Real and Personal Property Taxes• Local Excise Taxes

Deductibles on your Expatriate Tax Return:


Foreign Housing ExpensesForeign Housing ExpensesQualified individuals may elect to exclude or deduct a certain amount for foreign housing expenses.

The details of your foreign housing expense that will be asked during your Expat Tax Preparation includes:

• Rent

• Utilities

• Property Insurance

To learn more about the foreign housing expenses, see our US Expat Taxes Explained series.


DependentsDependents

Children and other dependents are a great source of deductions.

You need to provide:

• Name

• SSN or TIN

• Ages

• Child Care Expenses if under 15

• Education Expenses for higher

education


Other Deductions

Other potentially deductible expenses that should be provided

for your Expat Tax Preparation include:• Medical expenses not covered by insurance• Charitable donations• Alimony and Child support paid• Gifts to relatives or others and;• Unreimbursed business expenses.


OTHER FILING OTHER FILING REQUIREMENTS FOR REQUIREMENTS FOR

YOUR US EXPAT YOUR US EXPAT TAXESTAXES


Foreign Bank AccountsForeign Bank Accounts

• If you are a US person that has foreign bank accounts whose cumulative balances exceed $10,000 at any one time during the calendar year, you must report these account(s) to the IRS by June 30 of each year.

• Although this is not technically part of your Expat Tax Preparation requirements, most preparers will use the Form 90-22.1 Report of Foreign Bank and Financial Accounts (FBAR).

For more information on the FBAR or the Voluntary Disclosure Program the IRS is offering please visit our FBAR article.


PIECE OF ADVICEPIECE OF ADVICE

• If you have completed the questionnaire and dug through all your documents, but feel as if you are still missing a tax document, don’t ignore it! Contact the issuer to have it resent. It may have been lost in the mail, but still reported to the IRS.

• If it was reported to the IRS but omitted in your Expat Tax Preparation, the omission may be caught by the IRS which could, in turn, prompt an audit of your Expatriate Tax Return.

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Us expat taxes explained