The Power 
of Good Advice

CSET Financial Services has partnered with the best in the business. From Individual to Corporate tax planning/preparation to raising capitol and Insurance. Please read below an example of what we do!

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It has been estimated that there are several thousand Americans living  abroad.

It is an incredible experience living abroad for a number of reasons, including the friendly locals, the climate and beaches, and the quality of life. As an American expatriate living abroad though, what exactly do you need to know regarding filing US expat  taxes?

 

All US citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or their income is generated.

 

The good news is if you are paying income tax abroad, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.

US taxes – what you need to know

If you earn over US$10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040. While any US taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on the request until October 15th.

If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.

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If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.

“Spouses are required to file separate income tax returns covering their respective incomes. Income from property held in common is included in the return of the husband, so it should not be included in the spouse’s return.” – PwC

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If you pay income tax in a foreign country, there are several exemptions that allow you to pay less or no US income tax on the same income to the IRS.

AS EXAMPLE: The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a foreign resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you’ve paid in the Dominican Republic. These exemptions can be combined if necessary. Remember though that even if you don’t owe any tax to the IRS, if your income is over US$10,000 (or $400 if you’re self-employed) you still have to file a federal return.

 

The US and Dominican governments as well as many other countries share taxpayer info, and  banks pass on US account holders’ account info to the IRS, so it’s not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.

 

If you’re a US citizen, green card holder, or US/Dominican dual citizen, and you have been living in the Dominican Republic but you didn’t know you had to file a US tax return, don’t worry: there’s a program and Procedure that allows you to catch up on your filing without paying any penalties. Don’t delay though, in case the IRS comes to you first.

 

Solution: 

Our Procedure Is Accessible to Everyone

Skip the Penalties and Catch Up Now!

The Procedure is an IRS approved amnesty program that helps Americans overseas catch up with their US tax filings with no penalties nor undue scrutiny by the IRS. Our team of expert American CPAs is proud to have perfected the Streamlined Procedure – our online process is simple, straightforward, and easy to access worldwide.

Qualification is Simple
To catch up using the Streamlined Procedure you must:

File your last 3 federal tax returns
File your last 6 FBARS (Foreign Bank Account Reports), if applicable
Pay any taxes due (often zero, once you claim one or more expat exclusions)
Self-certify that your previous failure to file was non-willful
What Does it Cost?
Our Procedure package of $995 usd includes a tax return, as required. If applicable and required to file FBARs for any of the last 6 years too (required in years when you had over $10,000 in foreign accounts), additional costs per year will be calculated at a discounted rate.

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What Does ‘Non-Willful’ Mean?
The IRS defines non-willful as not filing because of a good faith misunderstanding of the requirement for you to file.

Will the IRS Actually Find Me?
Since the US law called FATCA (the Foreign Account Tax Compliance Act) was enacted in 2010, most foreign banks (now over 300 thousand and counting) are now providing their American account holders’ balances and contact details to the IRS, so the IRS now has unprecedented and global reach. Catching up using our Procedure gives US expats the opportunity to avoid IRS fines while retro-claiming the exemptions allowing them to minimize their US tax liability – most often to zero.