{"id":21947,"date":"2018-10-03T12:42:36","date_gmt":"2018-10-03T16:42:36","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=21947"},"modified":"2020-10-12T09:25:32","modified_gmt":"2020-10-12T14:25:32","slug":"expat-tax-compliance-get-it-right-or-go-to-jail","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/expat-tax-compliance-get-it-right-or-go-to-jail\/","title":{"rendered":"Expat Tax Compliance: Get it Right or Go to Jail"},"content":{"rendered":"

Expat Tax Compliance: Get it Right or Go to Jail<\/strong><\/h2>\n

One of the biggest challenges for U.S. citizens living and working overseas is staying compliant with the various reporting requirements of the U.S. Department of Treasury. With the last extension time for 2017 taxes (October 15<\/span>th<\/span>) closing in, I reached out to my good friend, Morey Glazier, for some help outlining the most important tax issues facing U.S. expats. Later in this article, you\u2019ll see his list of <\/span>FAQs for U.S. Taxes While Living Abroad<\/span><\/i>. \u00a0\u00a0<\/span><\/p>\n

Filing these days is more complex due to new laws passed in the wake of 9\/11, like the Patriot Act, and the follow-on a few years later, the FATCA provisions in the 2010 Jobs Bill. New thresholds for filing are much lower than before, and CFCs, Controlled Foreign Corporations, previously reportable, now have tax ramifications on retained earnings. This rule applies to any CFC where a U.S. shareholder has 10% or more of the company. \u00a0\u00a0<\/span><\/p>\n

The recent Republican tax plan rewrote much of the code as it pertained to offshore corporations in 2018, making much of what I and others published last year obsolete. You need to catch up quickly to maximize the tax benefits of living offshore. <\/span><\/p>\n

There was a time we thought the offshore filing requirements would be eliminated. But, when the dust settled, Trump changed the foundation of international tax law for big businesses and multinationals. However, he did nada for small businesses and individuals. <\/span><\/p>\n

Where U.S. corporations with divisions abroad are now only taxed on U.S. source income, we got screwed. When the United States moved from a worldwide tax system for multinationals to a residency-based tax system, they did not extend those benefits to individuals. <\/span><\/p>\n

We had hoped that individuals would also move to a residency-based system. That those of us living abroad would no longer be taxed on our worldwide income. That we\u2019d be placed on the same footing as large corporations and only taxed on our U.S. source income. But, this didn\u2019t happen. <\/span><\/p>\n

For us expats, the United States tax system still operates on the principle that U.S. citizens are taxed on our worldwide income. To enforce these laws, the IRS has imposed new filing obligations backed up by draconian penalties for those who fail to comply. <\/span>Not only did we lose out on the benefits of these tax law changes, we got hit with new rules that curtail the ability to retain profits offshore. <\/span><\/p>\n

Thus, you need to update your global tax strategy for 2018. Anyone living and working abroad, or investing outside of the United States, must get up to date fast! \u00a0<\/span><\/p>\n

This is a huge reason we worked hard to put together a conference this year with not just one, but two tax sessions as it relates to compliance and issues related to living, working, and investing offshore. \u00a0\u00a0<\/span><\/p>\n

Get more information now on the conference here<\/span><\/a><\/p>\n

Check out the coverage at this event:<\/span><\/p>\n