Time to Review! Tax Issues for US Recipients of Gifts/Bequests from Foreigners

With Christmas having recently been on our doorstep, now is the time to review what tax consequences are in store for gift givers and their lucky recipients.  US tax filings might be required of a US individual who receives a gift (whether in cash or property of some kind - you know, a 5 carat … Continue reading Time to Review! Tax Issues for US Recipients of Gifts/Bequests from Foreigners

ATTENTION! Married Filing Separately? $5 of Gross Income? Must File US Income Tax Return!

Yes, that did read US$5. Not $50. Not $500……This measly number will heavily impact Americans abroad who are married to non-US spouses.  In many instances, the US spouse will file separately and keep the non-US spouse completely out of the US tax picture.  This may not always be the best tax strategy but in some … Continue reading ATTENTION! Married Filing Separately? $5 of Gross Income? Must File US Income Tax Return!

US Beneficiary of Foreign Trust: Understanding US Tax Filings

I have written a series of blog posts about foreign (i.e., non-US) trusts and the US tax issues associated with them including the US tax filing and reporting requirements for each of the different players in the foreign trust scenario (creator or "grantor"/"settlor" of the trust), the trustee; and today, the US beneficiary. One of … Continue reading US Beneficiary of Foreign Trust: Understanding US Tax Filings

Alimony – No Need for Tax Confusion Even if Paying a Nonresident Alien Individual

My readers know that broad US tax reform was enacted in December 2017 pursuant to the Tax Cuts and Jobs Act (“TCJA”).  As of January 1, 2019, the TCJA’s new tax rules impacted any US spouse who was either paying or receiving alimony under a divorce or separation agreement executed after December 31, 2018. Under … Continue reading Alimony – No Need for Tax Confusion Even if Paying a Nonresident Alien Individual

Have you Expatriated or Thinking of Expatriating? IRS Now Looking Closely

On July 19th, the Internal Revenue Service (IRS) through its Large Business and International (LB&I) Division announced six new “compliance campaigns” for taxpayers. Significantly, one of these campaigns targets “expatriation”, and apparently reaches back to those who “expatriated” on or after June 17, 2008.  The campaign will be looking at “expatriates” – US citizens who … Continue reading Have you Expatriated or Thinking of Expatriating? IRS Now Looking Closely

US Citizenship And Worldwide Taxation: Justified?

Tune in to the amazing debate between John Richardson and Edward Zelinsky, two renowned tax and citizenship professionals, taking place on Friday May 17.  Not only is it free,  but viewers will receive an unparalleled education about the major issues surrounding US citizenship, its tax consequences for the typical American abroad and Accidental Americans, effects … Continue reading US Citizenship And Worldwide Taxation: Justified?

The Foreigner and the Taxman: Are You “Married” for US Income Tax Purposes?

Life gets confusing when you’re an American and you’ve married a “foreigner”.  Aside from the cultural and social differences you may encounter, you cannot forget that your US tax situation will now become even more complex.  Many of my tax blog posts explain the thorny side of filing US income tax returns, FBARs and various … Continue reading The Foreigner and the Taxman: Are You “Married” for US Income Tax Purposes?

Head’s Up! Foreign-Owned Single Member US LLC: Increase in Penalties for Form 5472

My earlier blog post covered some basics about Form 5472, including how the Form helps the US Internal Revenue Service (IRS) learn about foreign-owned businesses in the US and when to audit them, the meanings of certain terms such as what is meant by a “reportable transaction” with a “related party”, and the situation requiring filing … Continue reading Head’s Up! Foreign-Owned Single Member US LLC: Increase in Penalties for Form 5472

US Tax Law to American Abroad – “How Do I Hate Thee, Let Me Count the Ways”

Regular readers of my tax blog will not be surprised by the title of this post and the content it hints at delivering. They likely realize by now that the American person abroad is not looked upon favorably by the US tax laws.  The tax laws look at anything “foreign” with a jaundiced eye when … Continue reading US Tax Law to American Abroad – “How Do I Hate Thee, Let Me Count the Ways”

Mechanics of the Substantial Presence Test and Exemptions: Foreign Teacher, Student, Trainee, Government Employee in the US

Once a non-US individual is classified for income tax purposes as a “resident” he is subject to income tax in the same manner as a US citizen: i.e., taxed on his worldwide income (meaning income from all sources whether from within or outside the US) at a maximum rate of 37 percent (this top rate … Continue reading Mechanics of the Substantial Presence Test and Exemptions: Foreign Teacher, Student, Trainee, Government Employee in the US