Working Overseas? What Happens with Your U.S. Social Security?

US Social Security and Medicare taxes continue to apply to wages for services performed as an employee working outside of the United States if you are working for an “American employer”.   Similarly, if you are abroad and you are a self-employed US citizen or resident you generally are subject to the so-called “self-employment tax”.  Self … Continue reading Working Overseas? What Happens with Your U.S. Social Security?

Understanding Self-Employment Tax: The American Abroad

US Social Security and Medicare taxes continue to apply to “wages” for services performed as an employee working outside of the United States if you are working for an “American employer”.  Many Americans abroad are employees of a foreign employer and I will write a separate blog post about their situation.  Many Americans abroad are self-employed … Continue reading Understanding Self-Employment Tax: The American Abroad

Escaping Tax Penalties – “Reasonable Cause” & Reliance on Professional Advice

Today' lesson - Choose your US tax advisor very carefully.  If he or she lacks the US international/foreign tax experience you may need, reliance on the tax advice may not be considered "reasonable," leading to plenty of penalties.  Let's explore! Various civil tax penalties can be assessed when a taxpayer fails to pay the correct … Continue reading Escaping Tax Penalties – “Reasonable Cause” & Reliance on Professional Advice

Cannot Expatriate! US Consulate in Dubai – Joining Others Worldwide, Closes the Door on Expatriations

An alternative title for this post could be:  "Hasn't the State Department Heard About Zoom?" What’s become of the right to relinquish one’s US citizenship?  It has been thrown a curveball for the past year and a half.   Many US Embassies and Consulates throughout the world are not offering the service.  Those that did (or … Continue reading Cannot Expatriate! US Consulate in Dubai – Joining Others Worldwide, Closes the Door on Expatriations

International Taxpayers Need – But Can’t Have an IRS Online Account

An IRS online account is a safe and easy way for individual taxpayers to view specific details about their federal tax account. The American Abroad REALLY Needs an Online Tax Account How the US taxpayer living overseas would appreciate having such an online account! Time zone differences, long distance telephone charges when trying to reach … Continue reading International Taxpayers Need – But Can’t Have an IRS Online Account

Constitutionality of NIIT and Passport Revocation Rules Stand: Taxpayers Sacrificed in US Supreme Court and Tax Court  

The US Supreme Court and the Tax Court issued two big decisions impacting many US individual taxpayers. Here’s a short and not-so-sweet summary of what went down: The 3.8% Net Investment Income Tax Stands On June 17, 2021, by a clear majority vote,  the Affordable Care  (ACA) was upheld by the US Supreme Court, including … Continue reading Constitutionality of NIIT and Passport Revocation Rules Stand: Taxpayers Sacrificed in US Supreme Court and Tax Court  

All You Need to Know about the 3.8% Medicare / Net Investment Income Tax & how Pres. Biden Will Expand Who Pays It

Under current law, limited partners who materially participate in a partnership's business are not subject to self-employment tax. Members of an S corporation who materially participate in the S corporation's business are subject to self-employment tax only on "reasonable compensation" received in their capacity as an “employee”. These individuals are also exempt from the 3.8% … Continue reading All You Need to Know about the 3.8% Medicare / Net Investment Income Tax & how Pres. Biden Will Expand Who Pays It

Pres. Biden: 3d Party Information Reporting to be Increased – Foreign Accounts and Crypto Included

President Biden has an economic agenda and a big part of it is strengthening taxpayer compliance by increasing what must be reported to the Internal Revenue Service (IRS) about client accounts by third party financial institutions and similar entities. The President’s proposal would require information reporting on both business and personal financial accounts. The reporting … Continue reading Pres. Biden: 3d Party Information Reporting to be Increased – Foreign Accounts and Crypto Included

Closing the International Tax Gap: IRS Doing Virtually Nothing With FATCA

Today’s blog post discusses the overall and international tax gaps, takes a look at the offshore world and how enforcement of the tax laws is faring (hint - not so good). It summarizes some important testimony given on May 11, 2021 by the Honorable J. Russell George, Treasury Inspector General for Tax Administration before the … Continue reading Closing the International Tax Gap: IRS Doing Virtually Nothing With FATCA

Renouncing One’s US Citizenship: More Audits, Virtual Currency, CLN & Travel

COVID-19 restrictions have severely limited services at US embassies and consulates around the world. As a result, renouncing one’s US citizenship has become very difficult, and in many cases, just about impossible at the current time. This gives individuals more time to make sure they have properly planned for expatriation. It's a big step. I … Continue reading Renouncing One’s US Citizenship: More Audits, Virtual Currency, CLN & Travel