XPAT 1040 specializes in international tax filings for people all over the world and was created to serve the tax needs of the international taxpayer. Unlike other CPA firms, at XPAT 1040, you’ll be able to work one-on-one with your personal International Tax Expert throughout your tax filing process year after year.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”Who will I be working with at XPAT 1040?”][vc_column_text]At XPAT 1040, unlike other tax service providers, you’ll be assigned to your own International Tax Specialist. He/she will be your point of contact and correspond with you throughout the whole tax filing process year after year. At XPAT 1040, your International Tax Specialist will always be available to answer any of your questions relating to your filings.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”How will I communicate with my International Tax Accountant?”][vc_column_text]At XPAT 1040, you’ll be communicating with your Personal International Tax Specialist via telephone, skype, and/or email. Whichever method you prefer is how you will be communicated with.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”When and how do I pay for XPAT 1040’s service?”][vc_column_text]Once we’ve received all of your tax information and you’ve completed our customer questionnaire, we will begin preparing your tax return. After the tax preparation is completed, we will share with you your draft tax return. Once we share with you your draft tax return, XPAT 1040 will issue you an invoice. At this point payment should submitted via PayPal upon receipt of the invoice. You will not need a PayPal account for this process as we will request payment from you.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”Will XPAT 1040 be able to resolve my tax issues with the Internal Revenue Service (IRS) or State taxing authority?”][vc_column_text]XPAT 1040, having licensed U.S. CPA’s on staff, will generally be able to resolve your tax issues with the Internal Revenue Service or State tax authority should they present themselves. We have a proven track record of timely resolving dealings with the IRS or State taxing agency.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”Before I moved overseas I was using my local, down the street CPA. Why should I switch to XPAT 1040?”][vc_column_text]When you moved overseas your source of income might have stayed exactly the same, however, the facts didn’t. You never want to pay more taxes than you are required, and when you move overseas you could benefit from the foreign earned income exclusion, foreign tax credits, or a totalization agreement. Additionally, foreign informational reports, such as FBAR’s, FATCA, or ownership in a foreign entity, could make your tax filings very complicated and if not completed or done properly, you could face severe penalties or criminal prosecution.
[/vc_column_text][/vc_accordion_tab][/vc_accordion][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_text_separator title=”II. XPAT 1040’s Filing Process” title_align=”separator_align_left” color=”grey”][vc_accordion][vc_accordion_tab title=”I live in London. How do I send XPAT 1040 my tax information?”][vc_column_text]At XPAT 1040, we value privacy and security. We try and make gathering all of the necessary information to accurately complete your tax filings as secure and confidential as possible. We will not email any sensitive document unless you permit us to. We use Dropbox and Google Drive’s secure sharing platforms to transmit and receive files. https://www.dropbox.com/en/help/27, https://support.google.com/drive/answer/141702?hl=en. We would create a shared folder for you granting you rights to add and remove your files accordingly thereby preventing a compromising security situation from exposing itself.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”What information will you be requiring from me to prepare my taxes?”][vc_column_text]In order to prepare your tax return, your personal XPAT 1040 International Tax Specialist will provide you with our customer questionnaire to complete. Additionally, your prior year’s federal and states tax return(s) and FBAR reports should be shared with your specialist to ensure accurate tax preparation.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”How does XPAT 1040’s tax filing process work?”][vc_column_text]XPAT 1040’s tax filing process is a 4 step process. Step 1: you’re assigned to your personal International Tax Specialist and provide him/her with all of your tax information including the completed customer questionnaire, Step 2: Your International Tax Specialist begins working on your return and will provide a draft copy of your tax returns and reports within 5 (five) business days. Step 3: You’ll receive a draft copy of your tax return along with any electronic signature pages to be signed as well as an invoice for services rendered. The invoice must be paid at this point in order to proceed to Step 4. Step 4: You will share the signed electronic signature pages and we will submit your return for electronic filing. We will share with you the electronic filing acceptance from the IRS; You’re done!
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=” How long will it take to prepare my tax return?”][vc_column_text]At XPAT 1040, after we received all of your tax information, we will have your draft returns ready for review as soon as possible, but will be within five (5) business days.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”Does XPAT 1040 charge and collect VAT?”][vc_column_text]XPAT 1040 is Florida corporation. Being a U.S. corporation, we do not charge nor collect VAT or Sales Tax.
[/vc_column_text][/vc_accordion_tab][/vc_accordion][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_text_separator title=”III. U.S. Citizens/Residents Frequently Asked Questions” title_align=”separator_align_left” color=”grey”][vc_accordion][vc_accordion_tab title=”I’m a U.S. citizen and live in the States. I’m being relocated to Europe by my Employer next year. What tax issues should I be aware about?”][vc_column_text]Congratulations. You’ll be joining the U.S. expat community abroad. As a U.S. citizen living overseas, it’s extremely important to inform your current tax adviser that you’ll be moving overseas. If he’s not aware about international tax issues, you might want to contact XPAT 1040 to speak to one of our International Tax Specialists. You can benefit from the foreign earned income exclusion, housing deduction, foreign tax credits. Additionally, you’ll want to make sure you’re disclosing all of your foreign financial interests and assets if you’re over the reporting threshold.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a U.S. citizen that lived overseas in the past. I still maintain assets overseas, what does that mean for me?”][vc_column_text]If you’ve maintained assets overseas, you’ll want to make sure you’ve been disclosing these assets from the beginning if over the reporting threshold, including reporting any income that could be related to these assets. Please speak to one of our International Tax Specialists to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a U.S. citizen that’s self-employed overseas. Do I have to file a U.S. tax return?”][vc_column_text]A U.S. citizen living overseas, whether he/she is employed or self-employed, must file annual tax returns. U.S. citizens/residents are taxed on their worldwide income, and living in Johannesburg has the same federal tax implications as living back in Kentucky, however, the foreign earned income exclusion, foreign housing deduction, foreign tax credit, and totalizations agreements could benefit your tax situation and possibly reduce your tax bill to $0. Additionally, disclosing foreign interests and foreign assets could be a requirement.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”What is a Social Security Agreement?”][vc_column_text]A Social Security agreement, also known as a Totalization agreement, is an agreement between two foreign governments that define the terms of who is covered under which country’s social security system. Typically, when one gets relocated for work to a different country, his/her current employer and employee must still pay social security taxes in the prior country as well as the current country of residence. This could result in double taxation. The U.S. government entered into an agreement with 25 different countries in order to prevent this scenario of double taxation. U.S. Self-employed persons can also benefit from a totalization agreement, thereby eliminating self-employment taxes (SE Tax). Please speak to one of our International Tax Specialists to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m married to a non U.S. citizen and we live overseas. Is my tax return complicated?”][vc_column_text]If you’re married to a Non U.S. Citizen, you’re tax return could be complicated. You have a range of filing status that could be used to benefit your tax situation. Please speak to one of our International Tax Specialists to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”My spouse and I decided to retire overseas. We live from our investments, including social security. Is my social security taxable?”][vc_column_text]Good for you guys! Traveling is always exciting when you have money to spend. If you’re living overseas and collecting U.S. Social Security, depending on the your country of residence, will dictate whether or not a tax treaty is present exempting your social security earnings from tax. Please speak to one of our International Tax Specialists to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”What does FBAR stand for and what is it?”][vc_column_text]FBAR stands for Foreign Bank Account Reporting. This has been a hot topic due to the fact the IRS passed FATCA and is aggressively pursuing overseas taxpayers. A FBAR must be filed if a United States person has a financial interest in, or signature authority over foreign financial accounts, if, the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. A FBAR report is a separate informational report from your tax return, and must be submitted by June 30th. No extension is available, however Congress is looking to change the deadline and make an extension available. Please speak to one of our International Tax Specialists to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”What does FATCA stand for and what is it?”][vc_column_text]FATCA is an acronym for Foreign Account Tax Compliance Act. The law was passed under the Obama administration and introduced form 8938. Form 8938 is similar to the FBAR in that you must disclose all of your foreign financial assets, with the exception, the form is included in your tax return, has a higher reporting threshold depending on your filing status, and discloses additional foreign interest the FBAR is not required to disclose. Please speak to one of our International Tax Specialists to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’ve been living overseas for sometime now, and generate all my income through rental properties overseas. What does that mean?”][vc_column_text]If you’re a U.S. citizen/resident you are taxed on your worldwide income, therefore, you must report all of your income from renting out all of your properties. However, you are entitled to claim rental deductions against your rental income to arrive at net taxable income. In fact, if the country in which the property is situated also taxes the rental income, you’ll be able to claim a foreign tax credit lowering or making your federal tax liability $0. Lastly, you could be subject to an additional 3.8% tax on your net investment income depending on your income levels. Please speak to one of our International Tax Specialists to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”How do I qualify for the foreign earned income exclusion?”][vc_column_text]The first part to qualifying for the foreign earned income exclusion is to have a tax home overseas. A tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. After your tax home is established, the second part is either meeting the Bona Fide Residence Test or the Physical Presence Test. A U.S. citizen is a bona fide resident of a foreign country, or countries, for an uninterrupted period that includes an entire tax year (January 1–December 31,). A U.S. citizen or resident alien meets the Physical Presence Test when they are physically present in a foreign country, or countries, for at least 330 full days during any period of 12 months in a row. A full day means the 24-hour period that starts at midnight.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m living overseas and eanr more than the foreign earned income exclusion amount. How does this effect my taxes?”][vc_column_text]If you’re living overseas and qualify to claim the foreign earned income exclusion, but you’re income is higher than the exclusion, you could potentially face a tax bill come tax day. If you live in a country that has higher tax rates than the U.S. , generally you’ll have nothing to worry about. If you don’t live in a country that has higher tax rates than the U.S., sending in tax estimates will be a great idea as well as contacting one of our International Tax Specialists to do some tax planning. In any event, the potential U.S. tax rate is determined if you would have not taken the exclusion.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I live overseas. When do I have to file my taxes by?”][vc_column_text]If you live overseas, you’ll receive an automatic two month extension, extending the tax deadline from April 15th to June 15th. If the 15th falls out on the weekend then the deadline gets postponed to closest business day, generally Monday. In addition to the automatic two month extension, a 4 month and/pr 6 month extension is available extending to October 15th or as late as December 15th.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a U.S. citizen that lives overseas and a majority shareholder in a foreign corporation. Do I have any special filing requirements?”][vc_column_text]If you are a corporate officer or a shareholder of a non U.S. corporation, and have acquired a 10% or more interest in the foreign corporation during the current year, you could have an annual filing obligation disclosing your interest on form 5471, Return of U.S. Persons With Respect To Certain Foreign Corporations. Additionally, if you become a U.S. person during the year, and have an interest in a foreign corporation, you potentially might need to disclose your interest. Lastly, if more than 50% of the foreign corporation is owned by U.S. persons making the foreign corporation a controlled foreign corporation (CFC), please contact one of our International Tax Specialists as these are very complicated areas. Other informational reports may be required as well.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a U.S. citizen that lives overseas and a partner in a foreign partnership. Do I have any special filing requirements?”][vc_column_text]If you are a partner in a non U.S. partnership you could have to file form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships. Other foreign informational reports could apply. Please contact one of our International Tax Specialists as these are very complicated areas.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a U.S citizen that owns foreign mutual funds does that complicate my tax filings?”][vc_column_text]Owning a non U.S. mutual fund could put your asset under a very unfavorable code section classifying it as a Passive Foreign Investment Company (PFIC). If it is indeed a PFIC, than form 8621 needs to be filed with your tax return. The tax treatment of PFIC can vary, but if no election is made, it can be disastrous for the owner. Please contact one of our International Tax Specialists as these are very complicated areas.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I inherited foreign assets from a deceased non U.S. citizens estate. What does that mean?”][vc_column_text]If you’ve inherited foreign assets from a nonresident’s estate, depending on the assets, you could have multiple foreign reporting requirements such as FBAR’s, 8938, 3520, 5471, 8865, 8858, etc. Please contact one of our International Tax Specialists as these are very complicated areas.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I and my entire family lives overseas, and was curious to know how does Obamacare effect me and my family? “][vc_column_text]Obamcare was a new tax law that went into effect in 2014 mandating that U.S. persons are required to have health insurance unless an exemption applies. If you and your family live overseas, and qualify as bonafide residents or meet the physical presence test under IRC section 911, an exemption does apply to you and your entire household, exempting your family from the mandated health insurance. If you do not meet the overseas exemption requirement, other exemptions do apply, but should be consulted with out International Tax Specialists.
[/vc_column_text][/vc_accordion_tab][/vc_accordion][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_text_separator title=”IV. U.S. Citizens/Residents Delinquent In Filing Taxes” title_align=”separator_align_left” color=”grey”][vc_accordion][vc_accordion_tab title=”I was born overseas and lived overseas my entire life, however, my parents were U.S. citizens and registered my birth with the American Embassy and received a social security number for me. I never filed. What do I do?”][vc_column_text]This is an all too common situation, and thankfully, we have an answer. First, the law says that U.S. citizens/residents are required to report on their worldwide income. Second, if you have not, now’s an excellent time to begin. The IRS is currently offering very favorable programs waiving all penalties, such as the Offshore Streamlined Program, for delinquent taxpayers to bring them back into compliance. This program requires the applicant to complete the past 3 years of tax returns and 6 years of FBAR reports.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I moved overseas 10 years ago and stopped filing my taxes. What do you recommend me do?”][vc_column_text]You made the move overseas and stopped filing your U.S. taxes or never filed a FBAR report. Once again, this is a very common occurrence, and the IRS wants you to get back into compliance as its the law. Currently, the IRS is offering extremely favorable late filing tax programs that waive ALL penalties for late filings of tax returns and FBAR reports. XPAT 1040 specialize in these filings and stands ready to service you. Please contact one of our International Tax Specialists today to find out more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”My bank wants me to complete form W9. Is this serious?”][vc_column_text]The United States government, as well as many foreign governments, passed legislation to prevent money laundering and funds making its way to the wrong people The result; FATCA. For U.S. citizens/residents, that means most likely your financial institution is participating in this program, and is now requiring you to complete the W9 form. The W9 form has all of your tax information on it, and will be provided to the IRS for reporting purposes. This essentially means the IRS will know about you and your overseas account. If you were not tax compliant in the past, it is essential that you become tax compliant now. XPAT 1040 specializes in international tax filings and will be glad to assist you in this process.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’ve always been filing my taxes and FBAR report, but I forgot to include certain assets that I believe didn’t have to be disclosed. What do i do?”][vc_column_text]This is a serious situation and could warrant a filing under the OVDP process. The answer to this question depends on the type of account, how the money was generated, and whether it is corporate or individually owned. The OVDP process does carry with it penalties, however, it does eliminate criminal prosecution. Please contact your XPAT 1040 specialist for more information.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”How does the Offshore Streamlined process work?”][vc_column_text]The Offshore Streamlined Process requires the Individual U.S. citizens or lawful permanent residents, or estates of U.S. citizens or lawful permanent residents, meet the applicable non-residency requirement if, in any one or more of the most recent three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, the individual did not have a U.S. abode and the individual was physically outside the United States for at least 330 full days. Under IRC section 911 and its regulations, which apply for purposes of these procedures, neither temporary presence of the individual in the United States nor maintenance of a dwelling in the United States by an individual necessarily mean that the individual’s abode is in the United States. 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 (or properly applied for extended due date) has passed, file delinquent or amended tax returns, together with all required information returns (e.g., Forms 3520, 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). The full amount of the tax and interest due in connection with these filings must be remitted with the delinquent or amended returns. A taxpayer who is eligible to use these Streamlined Foreign Offshore Procedures and who complies with all of the instructions outlined below will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties. Even if returns properly filed under these procedures are subsequently selected for audit under existing audit selection processes, the taxpayer will not be subject to failure-to-file and failure-to-pay penalties or accuracy-related penalties with respect to amounts reported on those returns, or to information return penalties or FBAR penalties, unless the examination results in a determination that the original tax noncompliance was fraudulent and/or that the FBAR violation was willful. Any previously assessed penalties with respect to those years, however, will not be abated. Further, as with any U.S. tax return filed in the normal course, if the IRS determines an additional tax deficiency for a return submitted under these procedures, the IRS may assert applicable additions to tax and penalties relating to that additional deficiency.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”How does the Offshore Voluntary Disclosure Program work?”][vc_column_text]The Offshore Voluntary Disclosure Program (OVDP) is a voluntary disclosure program specifically designed for taxpayers with exposure to potential criminal liability and/or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due in respect of those assets. OVDP is designed to provide taxpayers with such exposure (1) protection from criminal liability and (2) terms for resolving their civil tax and penalty obligations. The OVDP program requires 8 years of tax returns and FBAR reports to be completed and carries with it a 27.5% penalty or 50% on the highest years aggregate value during the covered period covered by the voluntary disclosure.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’ve never lived in the States and never filed a tax return and don’t plan on filing either. What is the worst case scenario?”][vc_column_text]We never advise this, but the worst case scenario is jail time and hefty penalties. The IRS rolled out fantastic programs to get into tax compliance, and we heavily encourage people to utilize these programs.
[/vc_column_text][/vc_accordion_tab][/vc_accordion][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_text_separator title=”V. Nonresident Aliens (NRA) Investing/Working/Studying in the States” title_align=”separator_align_left” color=”grey”][vc_accordion][vc_accordion_tab title=”I’m a nonresident alien investing into the States through a U.S. partnership. Do I need to file a U.S. tax return?”][vc_column_text]Good luck on the new investment. Yes, you will need to file a Federal tax return, form 1040NR, and possibly state or multiple state tax returns. You’ll be receiving an information tax form, called a K-1, from the U.S. partnership. This form summarizes the activity as well as your investment into the partnership, and is used to prepare your annual tax return. You’ll also need an Individual Tax Identification Number, also known as an ITIN, for tax reporting purposes. XPAT 1040 can assist you with all of these filings.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a nonresident alien owning rental real estate directly. Do I need to file a U.S. tax return?”][vc_column_text]Yes. You will need to file a federal nonresident alien tax form called Form 1040NR as well an any state or states where you’re rental property is located. It is very important that nonresidents make special tax elections when owning rental real estate in the United States as beneficial tax treatment can effect how much taxes could be paid. Also, there are U.S. estate tax issues for nonresident aliens invested into the United States that should be considered.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a nonresident alien studying and working in the States on a F-1 Visa. What does that mean?”][vc_column_text]If you were admitted into the states on a F-1 visa to study you are considered an exempt individual. An exempt individual, even though physically present in the United States, is as if he/she is not physically present in the United States. The student can take advantage of this status and claim it for a maximum of five (5) years. During this period, the student is deemed a nonresident as is only taxed on his/her income effectively connected to the United States. Additionally, the student is exempt from social security and medicare taxes being withheld from his/her paycheck if they are working and the work is through the University or related to his/her studies.
[/vc_column_text][/vc_accordion_tab][vc_accordion_tab title=”I’m a nonresident alien and was relocated to the States by my employer at the beginning of the tax year. Do I need to file a U.S. tax return?”][vc_column_text]Welcome to the United States! Since you were transferred here to the States, and you were working in the States, you will have to file a tax return. The type of tax return will vary based on the numbers days you were physically present in the States during the calendar year. Three (3) filing options could apply. 1. You could be considered a nonresident being physically present in the states less than 183 days during the year. 2. You could be considered a dual-status resident or 3. You can be considered a full-year resident. Under options 2 & 3 you must disclose all of your foreign financial assets. Please contact XPAT 1040 as we specialize in foreign nationals being relocated to the States for employment.
[/vc_column_text][/vc_accordion_tab][/vc_accordion][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_column_text]If you do not find an answer here, please be in touch with us at: [email protected] or 1.844.EXPAT-US (1.844.397.2887) or UK +44.20.3769.5241
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