Imagine you are an American taxpayer living overseas. Like so many other Americans you are facing financial hardships wrought by COVID-19. You have a car loan you cannot pay and mounting credit card debt. Like an angel from above, your creditors agree to forever forgive some of the amounts you otherwise owe them. You cannot … Continue reading What a Mess: Debt Forgiveness and the American Abroad
This is a repost with some changes and more research resources to clarify the earlier article. It may be hard to believe, but losing your foreign home to foreclosure can result in US tax consequences. The tax problems are worsened for the American abroad. Today’s post explains why. The topic is becoming more relevant to … Continue reading Woeful American Abroad! Foreign Residence Mortgage? Foreclosure? Debt Forgiveness? Nasty US Tax Surprises Await You
Last week's blog post discussed the home office tax deduction and burst the bubble for many who were working at home for months under COVID-19 restrictions. Unfortunately, as discussed in that earlier post, this tax break cannot be used by an individual who is an “employee” as opposed to "self-employed". This restriction is a result … Continue reading COVID-19: Is Employer Provided Assistance due to the Pandemic Taxable Income? What if the Employer is “Foreign”?
Before delving into the nitty gritty, let me start with a disclaimer. I am not an immigration specialist and this post does not address, other than in a very general manner, immigration issues associated with surrendering a green card at the border. Today’s blog post examines the US tax issues that surround relinquishing the green … Continue reading Surrendering a Green Card at the Border – COVID-19, Stuck Abroad, “Forced” to Surrender Green Card?
As COVID-19 continues to wreak havoc across the globe, individuals and companies are being faced with new and very difficult challenges. One of the challenges involves unanticipated tax consequences that may arise as a result of travel disruptions and unintended stays in the US due to travel lock-downs. My earlier blog posts explained the US … Continue reading COVID-19: IRS Provides “US Trade or Business” / “Permanent Establishment” Relief for Foreign Businesses
In Rev. Proc. 2020-20, the Internal Revenue Service (IRS) provided relief to foreign citizens who were caught out by travel disruptions occasioned by the corona virus, and as a result, remained in the United States for too many days thereby causing them to be subject to US income tax. Under the Revenue Procedure, the IRS will … Continue reading COVID-19 Relief: IRS Helps Foreigners Having Prolonged Presence in the US
Americans working abroad may be eligible to exclude certain foreign earned income (wages, compensation for services) from US taxable income under the rules governing the Foreign Earned Income Exclusion (FEIE). In addition they may be able to exclude certain amounts paid for foreign housing using the Foreign Housing Exclusion (FHE). Both of these benefits are … Continue reading Section 911 FEIE: IRS COVID-19 Relief in Meeting the Bona Fide Residence or Physical Presence Test
As set out in detail in my earlier blog post, the CARES Act amended Internal Revenue Code section 172(b)(1) to provide for a carryback of any net operating loss (NOL) arising in a tax year beginning after December 31, 2017, and before January 1, 2021, to each of the five tax years preceding the tax … Continue reading IRS Provides CARES Act Guidance for Taxpayers with NOLs
On April 9th, the Internal Revenue Service (IRS) issued IRS Notice 2020-23 providing extended tax filing, election and payment deadlines to a generous number of Forms. Generally speaking most tax returns, payments, and elections that are due from April 1, 2020 to July 15, 2020 are now automatically extended until July 15, 2020. This means there is … Continue reading Buying Time – International Tax Forms & More…IRS Notice 2020-23 Expands Relief for US Tax Filings, Elections, Payments
On March 25, 2020, the Senate unanimously passed (96-0) the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) providing desperately needed relief to, among others, individuals and businesses suffering economic distress wrought by the COVID-19 pandemic. Two days later, March 27, 2020, the House of Representatives passed the CARES Act by voice vote and President Trump signed … Continue reading COVID-19 and Losses, Losses, Losses ….NOL Tax Relief from the CARES Act