Taxes for U.S. Expats in New Zealand | H&R Block® https://www.hrblock.com/expat-tax-preparation/resource-center/country/new-zealand/ Tue, 16 Apr 2024 21:45:23 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.hrblock.com/expat-tax-preparation/resource-center/wp-content/uploads/2022/10/cropped-hrblock-32x32.jpg Taxes for U.S. Expats in New Zealand | H&R Block® https://www.hrblock.com/expat-tax-preparation/resource-center/country/new-zealand/ 32 32 What U.S. Expats Need to Know About The Foreign Earned Income Exclusion (FEIE) https://www.hrblock.com/expat-tax-preparation/resource-center/income/foreign/foreign-earned-income-exclusion-for-u-s-expats/ https://www.hrblock.com/expat-tax-preparation/resource-center/income/foreign/foreign-earned-income-exclusion-for-u-s-expats/#respond Mon, 04 Mar 2024 20:42:09 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=241 Learn more about the Foreign Earned Income Exclusion with this tax guide from the Expat tax experts at H&R Block. Find out if you qualify for an exclusion on your expat taxes.

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The Foreign Earned Income Exclusion (FEIE) is one of the most common tax benefits U.S. expats have access to. If you’re eligible, it allows you to to exclude all or a portion of your foreign earned income from their United States taxes.

But before you jump to claim the FEIE, there are a few things you should know:

  • If used properly, the FEIE can save you thousands of dollars on your United States taxes
  • It’s not a blanket foreign income exclusion — there are stipulations on what you can exclude and what you can’t
  • You don’t automatically get the FEIE — you need to meet specific qualifications and then file the proper paperwork (Form 2555)
  • The FEIE isn’t your only tax relief option — you should ask your Tax Advisor what options are available to you based on your specific situation.

U.S. taxes for expats aren’t easy. Let our experienced Expat Tax Advisors help prepare your tax return this year to ensure the foreign earned income tax exclusion is elected when it is most beneficial to you. Ready to claim the FEIE? We’ve got a tax solution for you — whether you want to DIY your expat taxes or leave it to one of our experienced Tax Advisors. Head on over to our Ways to File page to choose your journey and get started.

What foreign income can you exclude with the FEIE?

The Foreign Earned Income Exclusion can help reduce or eliminate U.S. taxes on foreign income earned while working abroad, but it doesn’t apply to all sources of income.

This exclusion is only available for earned income and doesn’t apply to passive or investment income such as interest and dividends. Foreign earned income includes:

All income must have been earned in a foreign country to count as foreign earned income.

Note: You might qualify for the foreign earned income exclusion even if the country in which you’re working doesn’t assess income tax on compensation, like the UAE.

Who qualifies for the Foreign Earned Income Exclusion?

The foreign income tax exclusion applies to those who have lived abroad for a certain period of time within the tax year. However, partial-year exclusions are available if you’ve recently moved to a foreign country or returned to the U.S. mid-year.

The FEIE is available to expats who either:

Employees of the U.S. government can’t claim the foreign income exclusion. However, an employee of a private company under contract with the U.S. government might still be eligible.

Passing the Bona Fide Residence Test

To qualify as a Bona Fide Resident and pass the test, you must prove that you have more ties to a foreign country than the U.S. You also must be a resident of that country for an uninterrupted period that includes an entire tax year. When and if you go back to the U.S., you must have the intention of returning to your current foreign country of residence. In addition, you must:

  • Be a U.S. citizen or be a resident alien of a foreign country with which the U.S. has an income tax treaty.
  • Earn active income. Unearned, or inactive, income like pension payouts, interest, and dividends cannot be included.
  • Be overseas for work for a period longer than a year.
  • Have a permanent place of work in a foreign country.

It is possible to be a Bona Fide Resident for part of the year if you spent at least a full tax year outside the U.S. in a prior year. As a result, you can claim the FEIE for part of the year.

Passing the Physical Presence Test

To qualify under the Physical Presence Test, you must have been living outside the U.S. for 330 full days out of the year. Be careful when you track your time, because a “full day” counts as 24 hours starting at midnight, and you need to be in-country for every minute of those 24 hours.

For example, if you lived in Windsor, Canada and popped over the border to Detroit for Friday night and came back Saturday evening, you wouldn’t be able to count that time towards your 330 full days.

How much foreign income can I exclude?

If you’re an expat and you qualify for a Foreign Earned Income Exclusion from your U.S. taxes, you can exclude up to $112,000 or even more if you incurred housing costs in 2022. (Exclusion is adjusted annually for inflation). For your 2023 tax filing, the maximum exclusion is $120,000 of foreign earned income. If you’re married and both of you meet either the bona fide residency test or the physical presence test, you can each claim the FEIE.

Foreign Tax Credit vs. Foreign Earned Income Exclusion

It’s important to choose between the foreign income exclusion vs. foreign tax credit wisely. If you claim the exclusion and then change back to the foreign tax credit, you can’t claim the exclusion again for five years. The only way to claim the exclusion again involves a costly process with the Internal Revenue Service (IRS). Get tax help from an expat tax advisor to help you understand your options.

Claiming the foreign tax credit and filing Form 1116 might be the better option if any of these apply:

  • You’re paying foreign tax at a higher rate than your U.S. tax rate
  • You wish to participate in an individual retirement arrangement (IRA)
  • You qualify for certain family-related credits based on non-excluded income
  • You wish to exclude or reduce taxes on passive or investment income

Foreign Earned Income Exclusion extensions

Even if you haven’t been out of the country long enough to claim the exclusion by your expat filing deadline, you can request an extension to file until you’ve met these time requirements.

You generally must claim the exclusion either:

  • Within one year of the due date of your tax return
  • By amending a timely filed return

However, you may claim the exclusion if:

  • The IRS hasn’t discovered your failure to file your return claiming the exclusion, or
  • You owe no tax after taking the exclusion into account

If you haven’t filed returns in prior years, you still might be able to exclude your foreign earned income from U.S. tax. This could have the effect of eliminating your tax liability and any penalties and interest that would be assessed.

Foreign Housing Exclusion and Foreign Housing Deduction

If you’re an expat and you incur foreign housing expenses, you might be able to exclude or deduct them. The Foreign Housing Exclusion is available for expats working as employees with housing expenses like rent and utilities.

The foreign housing deduction is available for self-employed expats paying foreign housing expenses. The amount of your housing exclusion or deduction is based on the difference between the following:

  • Your actual foreign housing expenses
  • A base amount for your foreign country of residence

You can use the Foreign Housing Exclusion if your housing costs total more than 16% of that year’s FEIE.

To calculate the maximum amount you can exclude, you’d multiply that year’s maximum income exclusion by 0.3 to get 30% of the full exclusion amount. So, for 2023, you’d take $120,000 x 0.3 = $36,000. Something to know is that most large metro areas have higher limits, so it’s important to have a Tax Advisor who knows the ins and outs of taxes in your specific area.

Common problems U.S. expats have with the foreign income exclusion and Form 2555

U.S. expats have a lot of the same questions and issues when they file their FEIE, but these are the most common problems associated with the FEIE:

  • You didn’t file Form 2555 – Many expats assume that if they qualify for the FEIE it will be automatically added to their tax filing. To claim the FEIE you must file Form 2555.
  • You’re a government employee — Unfortunately, U.S. government employees cannot claim this foreign income exclusion.
  • You failed to calculate the FEIE correctly – If you calculate your FEIE incorrectly you won’t get the correct amount excluded.
  • You claimed the FEIE when you should have claimed the FTC – For example, if you’re retired abroad and you only have investment and passive income, you may have been better off claiming the FTC.
  • You didn’t track your time properly – You must be vigilant about tracking your time if you want to pass the Bona Fide Residency or Physical Presence tests. Even being off by a few hours can mess up your qualifications.
  • You had no active income for that year – If you’re living abroad off investment or passive income, you don’t qualify for the FEIE.
  • You didn’t pay your U.S. self-employment taxes – You still have to pay self-employment taxes when you’re claiming the FEIE.

These are only a few of the most common issues and problems we come across. If you’re having difficulties or are a new American expat, it’s smart to leave your expat taxes to a specialist.

File your Foreign Earned Income Exclusion with H&R Block

Filing taxes while living and working abroad can be overwhelming and stressful. As an expat, your tax situation is very different and requires specialized expertise. Get started with H&R Block’s Expat Tax Services today.

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FBAR vs. FATCA: Filing Requirements for Americans Abroad https://www.hrblock.com/expat-tax-preparation/resource-center/tax-law-and-policy/tax-acts/fbar-vs-fatca-filing-requirements-for-americans-abroad/ https://www.hrblock.com/expat-tax-preparation/resource-center/tax-law-and-policy/tax-acts/fbar-vs-fatca-filing-requirements-for-americans-abroad/#respond Sun, 02 Apr 2023 19:51:00 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=259 Learn more about FBAR and FATCA filing requirements for U.S. expats from the tax experts at H&R Block.

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What’s the difference between FATCA and the FBAR? If you’re unsure, you’re in the right place—the Foreign Bank Account Report (FBAR) and FATCA Form 8938 are two common and important forms you may have to file if you have money in foreign financial accounts. It’s crucial to understand what each one’s for and their filing requirements — filing one or both incorrectly or not filing when you’re supposed to can lead to some serious penalties.

Understanding each form is key to avoiding a problem with the IRS or the Financial Crimes Enforcement Network (FinCEN), so below we’ll dive into the FBAR and FATCA Form 8938 filing requirements for Americans abroad. If you’re still unsure which tax documents you need to file or if you haven’t filed taxes in a few years, it’s always best to trust these forms to an experienced advisor.

Need to file FinCEN Form 114 or FACTA Form 8938? Whether you want to file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.

FBAR vs. FATCA: Do you file FinCEN Form 114, Form 8938, or both? What’s the difference?

A common question Americans with assets in foreign bank accounts ask us is if they need to file an FBAR (the actual form you’d file is FinCEN Form 114) or FATCA Form 8938. The answer is: You could have to file one, none, or both. While they both exist to report financial assets to the government, they differ in a number of ways. For starters, they get sent to different places — you send your FBAR to the Financial Crimes Enforcement Network and send Form 8938 to the IRS.

We’ll dive more into the individual FBAR and FATCA filing requirements below, but here’s the quick who-what-where-when comparing the two:

FATCA Form 8938FBAR (FinCEN Form 114)
Who filesU.S. citizens and certain U.S. corporations, trusts, and partnerships who also fall in the following thresholds:Citizens living in the U.S.:Unmarried individual (or married filing separately) with assets valued at more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.Married individual filing jointly with assets valued at more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.
Citizens living outside the US:Unmarried individual (or married filing separately) with assets valued at more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.Married individual filing jointly with assets valued at more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.
Other specified domestic entities:Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the tax year.
U.S. citizens, resident aliens, trusts, estates, and domestic entities whose assets in reportable foreign financial accounts exceed a total of $10,000 at any time during the calendar year.
Where it gets filedWith your yearly IRS tax returnWith FinCEN, the Financial Crimes and Enforcement Network of the U.S. Treasury Department
Filing deadlineBy the filer’s U.S. income tax return due date.By the filer’s U.S. income tax return due date (automatic extension to Oct 15 in prior years)
Penalties for failing to fileYou’re fined up to $10,000 for failure to disclose and then another $10,000 every 30 days after the IRS notifies you of a failure to file. While the maximum fine is a penalty of $50,000 the IRS may also apply criminal penalties.$10,000 for each failure to file; if the IRS determines that the failure was willful, that fine goes up to the greater of $100,000 or 50% of account balances. Criminal penalties may also apply.

FATCA filing requirements

The Foreign Account Tax Compliance Act (FATCA) is a part of the government’s efforts to combat offshore tax evasion. American expats of all income levels with foreign accounts and assets should know about it. FATCA requirements impact U.S taxpayers and overseas financial institutions:

  • U.S. taxpayers with foreign accounts and assets may need to file Form 8938: Statement of Specified Foreign Financial Assets with their annual U.S. Income Tax Return
  • FATCA reporting requirements for financial institutions overseas mandates them to disclose information about U.S. citizens who hold accounts overseas

Form 8938 is similar to the FBAR in many ways. However, it has higher reporting thresholds and requires you to disclose certain “non-account” assets such as:

  • Business and trust ownership
  • Certain contractual investments with foreign parties

FATCA reporting deadline

As Form 8938 is filed with your U.S. income tax return, due dates applicable to Form 1040 apply. Automatic extensions for expats living abroad or additional extensions to October 15 can provide more time to collect needed information from foreign financial institutions and determine your filing requirements.

You can always see up-to-date FATCA declaration deadlines on our expat tax deadlines page.

Who files? FATCA Form 8938 filing thresholds

Who is subject to FATCA reporting? The filing thresholds differ depending on where you lived during the tax year.

If you live within the U.S. the entire tax year, you must file Form 8938 if the value of your reportable foreign assets exceeds either of these levels:

  • More than $50,000 (or $100,000 if married filing jointly) at the end of the year, or
  • More than $75,000 (or $150,000 if married filing jointly) at any time in the year

Expats living abroad have an increased reporting threshold. You don’t need to complete this form unless your foreign assets exceed either:

  • $200,000 (or $400,000 if married filing jointly) at the end of the year, or
  • $300,000 (or $600,000 if married filing jointly) at any time during the year

FATCA financial institution reporting

Many foreign financial institutions must report their U.S. citizen and resident clients’ accounts and if you’re an expat who hasn’t been filing FATCA information, that could affect you as you might face penalties and interest.

Ready to file FACTA Form 8938? Whether you file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.

FBAR filing requirements

The Report of Foreign Bank and Financial Accounts, or “FBAR” serves many of the same purposes Form 8938 does, with a few differences. A main one is that the FBAR goes to the Financial Crimes and Enforcement Network of the U.S. Treasury Department instead of the IRS. The FBAR came into existence in the Bank Secrecy Act of 1970 (BSA). Its purpose was, and still is, to prevent U.S. citizens from hiding assets overseas with the intent to commit tax evasion and money laundering.

By law, you must file FinCEN Form 114 if both of the following are true:

  • You’re a U.S. citizen, resident taxpayer or domestic business entity
  • You own, control, or have signature authority over foreign bank and financial accounts with a combined value over $10,000

If you were thinking of writing it off or ignoring your reporting obligation, beware: The penalties for willfully not filing can be $100,000 or more.

FBAR filing deadline 2023

The FBAR is filed separately from your tax return and does not go to the IRS. The FBAR deadline is the same as your income tax deadline, with an automatic extension to October 15 available.

You can always see up-to-date FBAR reporting deadlines on our expat tax deadlines page.

Who files? FinCEN Form 114 filing thresholds

You may be required to file an FBAR if you’re A U.S. citizen or green card holder using personal or business foreign accounts for everyday activities

The reporting requirement covers many types of foreign accounts maintained outside of the United States, including:

  • Bank accounts
  • Securities accounts
  • Certain foreign retirement arrangements

The FBAR filing requirement isn’t new, but expats often overlook it. Recent international enforcement efforts have raised awareness of the requirement. Don’t worry, though — your FBAR is only an informational document. No additional tax will be added. However, penalties can be levied if you don’t file or file late.

Need to file FinCEN Form 114 (FBAR)? H&R Block makes it simple to file your U.S. taxes and FBAR together.

Not sure if you should file FBAR vs. FATCA Form 8938? The experts at H&R Block are here to help.

Confused whether you should file an FBAR, FATCA declaration, or both? Don’t go it alone — your H&R Block tax advisor will know exactly what to do with your specific situation. Ready to file?

Get started with H&R Block’s Expat Tax Services today.

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Guide to U.S. Expat Taxes in New Zealand https://www.hrblock.com/expat-tax-preparation/resource-center/country/new-zealand/guide-to-u-s-expat-taxes-in-new-zealand/ https://www.hrblock.com/expat-tax-preparation/resource-center/country/new-zealand/guide-to-u-s-expat-taxes-in-new-zealand/#respond Fri, 18 Nov 2022 16:17:11 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=429 If you are a U.S. citizen or green card holder living in New Zealand, there are a few things you should know. Learn more about U.S. expat taxes in New Zealand with the experts at H&R Block.

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U.S. citizens living in New Zealand get to experience all the best parts of living abroad — a high quality of living, naturally beautiful landscapes, and thriving cities. Yes, U.S. expats in New Zealand live the good life — as long as they keep up with their U.S. tax obligation.

Understanding U.S. expat taxes in New Zealand may seem difficult, but with the help of the U.S.- tax experts here at H&R Block’s Expat Tax Services, you’ll get caught up on the basics in no time.

Ready to file your U.S. taxes from New Zealand? Whether you file expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.

How U.S. taxes work for U.S. citizens living in New Zealand

The most common question we get from U.S. expats in New Zealand is if they still have to pay U.S. taxes even if they live and work in New Zealand.

The answer is yes — even if you’re currently living in New Zealand you likely still have to file U.S. taxes as long as you’re considered a U.S. citizen or Green Card holder. The reason for this is that the United States has a tax system based on citizenship, not residency. That means it doesn’t matter if you live in Austin, TX or Auckland, NZ — if you’re legally considered an American, you file U.S. taxes.

Taxable foreign income for Americans living in New Zealand includes:

  • Wages
  • Interest
  • Dividends
  • Rental Income
  • Retirement account distributions

The New Zealand tax year is different than the U.S. tax year — it begins on April 1 and ends on March 31 of the following year. This has implications on how you report your foreign income to the U.S., as it will need to be reconciled with the U.S. tax year. When you file with H&R Block, your Expat Tax Advisor can do this reconciling for you. Get started with an Expat Tax Advisor now.

If you’re an Americans working in New Zealand, you can lower your U.S. tax bill and avoid dual taxation with certain tax strategies. The U.S. has options to help prevent double taxation for Americans living overseas, including tax credits, deductions, and income exclusions:

  • The Foreign Earned Income Exclusion (FEIE) and Foreign Housing Exclusion – The FEIE and housing exclusion allow U.S. citizens in New Zealand to exclude up to a certain amount of foreign earned income if they meet certain requirements.
  • Foreign Tax Credit (FTC) – The FTC allows Americans to claim a dollar-for-dollar credit on New Zealand taxes paid if they meet certain requirements.
  • Tax treaties – To prevent double-taxation, the U.S. has tax treaties with individual countries, including the U.S./New Zealand tax treaty

If you’ve been living in New Zealand and have never filed a U.S. tax return, there’s good news: You may be able to get caught up on expat taxes without being penalized. The IRS has a program to help expats who non-willfully fell out of compliance — Streamlined Foreign Offshore Procedures — which the Expat Tax Advisors here at H&R Block can happily help you with. To qualify, you must:

  • Have lived in a foreign country for at least 330 days during one of the last three years and not maintained a U.S. abode.
  • Confirm that your failure to file U.S. tax returns was not willful.

Get started on your expat taxes now.

U.S. taxes when retiring in New Zealand

If retiring in New Zealand is in your plan, you should first understand how taxes work when retiring abroad.

  • Even if you’re retired, you still may have to file a U.S. tax return from New Zealand.
  • You’ll still have to report money in any New Zealand financial accounts on your FBAR (more on that below) if you meet the requirements
  • If you have a New Zealand pension or retirement account like a (KiwiSaver account) it may not have the same tax advantages for your U.S. tax filing. Many foreign pensions and retirement accounts can be classified as PFICs or foreign trusts, which trigger a whole host of other reporting requirements.

We recommend you speak with an Expat Tax Advisor before you dive into these types of taxes on your own.

Get started on your expat taxes now.

U.S. citizens may have to report money in New Zealand financial accounts

If you have New Zealand financial accounts (like bank or investment accounts), filing your U.S. taxes may not be the end of your paperwork —you may also have to file a Foreign Bank Account Report (FBAR)

The U.S. enacted the Foreign Account Tax Compliance Act (FATCA) to increase transparency of U.S. citizens with foreign bank accounts, and your FBAR serves a similar purpose. One difference between the two is you submit Form 8938 to the IRS while you submit your FBAR with FinCEN, the U.S. Treasury Department’s Financial Crimes and Enforcement Network.

If you’ve had a total of $10,000 or more in foreign accounts at any one time in the year, you’d have to file an FBAR. For example, if you had three accounts with balances of $1, $2, and $9,999 at the same, all three would become reportable. If you have foreign assets with a value greater than $200,000, you’d also have to file FATCA Form 8938.

If you’re at all confused about your FBAR and FATCA filing requirements, it’s best to leave your U.S. expat taxes to seasoned pros who will dig into your specific tax situation to find all your filing requirements.

Get started on your expat taxes now.

Basics of New Zealand taxes for U.S. citizens

As an American living in New Zealand, you may have to pay New Zealand taxes. While we recommend you speak with a residency expert, New Zealand’s Inland Revenue Department says you will generally be considered a New Zealand tax resident when either of these happens:

  • You’ve been in New Zealand for more than 183 days in any 12-month period
  • You have a permanent place of abode in New Zealand

Most U.S. expats will fall under the non-resident category, but residency and taxes in New Zealand are complicated subjects, and we recommend you speak with a New Zealand residency expert to determine your status.

New Zealand income tax rates for U.S. expats and the PAYE system

The New Zealand tax year begins on April 1 and ends on March 31 of the following year. Taxes are due to the Inland Revenue Department on or before July 7 of the same year.

There are two sets of income tax rates in New Zealand: One for residents and one for non-residents. New Zealand residents are taxed on worldwide income. Americans living in New Zealand who are not considered residents for tax purposes are only taxed on income from New Zealand sources.

You can see up-to-date, specific information on New Zealand taxes for non-residents on the Inland Revenue Department’s website, but in general, the non-resident tax withholding is a flat rate of 15%.

If you’re employed by a New Zealand employer and all your income is from your wages and other salary benefits, your NZ taxes may be automatically taken out under New Zealand’s Pay as You Earn (PAYE) system.

2022 New Zealand Tax Rates for Americans Who Qualify as Residents (after April 1, 2021)

IncomeTax Rate
Up to $14,000 NZD10.5%
Over $14,000 NZD and up to $48,000 NZD17.5%
Over $48,000 NZD and up to $70,000 NZD30%
Over $70,000 NZD and up to $180,000 NZD33%

How to file U.S. taxes from New Zealand

With H&R Block, you have two options to file expat taxes from New Zealand: With you in the driver’s seat using our DIY online expat tax service (designed specifically for expats), or by letting one of our experienced Expat Tax Advisors take the wheel. No matter which journey you choose, you get the 100% Accuracy Guarantee from H&R Block.

Here’s how to file your U.S. expat taxes from New Zealand:

  • Head on over to our Ways to File page
  • Pick your journey—in the driver’s seat with our online DIY tool or letting a Tax Advisor take the wheel.
  • Once you’re through your chosen journey, you review your return and pay
  • We file your return with the IRS
  • You sit back knowing your taxes were done right

Looking for tax advice for U.S. citizens living in New Zealand? H&R Block Expat Tax Services has your back.

If you’re an American living in New Zealand, tax returns likely aren’t at the forefront of your mind until it’s time to file. Luckily for you, our Expat Tax Services are tailored for Americans abroad, making the process simple and your tax season stress-free. Looking for tax advice for U.S. citizens living in New Zealand? H&R Block Expat Tax Services has your back.

Start your U.S./New Zealand expat taxes for free today!

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The Basics of Streamlined Filing Compliance Procedures and Delinquent FBAR Penalties https://www.hrblock.com/expat-tax-preparation/resource-center/filing/tax-responsibilities-and-penalties/catching-up-what-you-need-to-know-about-streamlined-filing-compliance-procedures-and-delinquent-fbar-penalties/ https://www.hrblock.com/expat-tax-preparation/resource-center/filing/tax-responsibilities-and-penalties/catching-up-what-you-need-to-know-about-streamlined-filing-compliance-procedures-and-delinquent-fbar-penalties/#respond Tue, 25 Oct 2022 18:31:51 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=135 Behind on your expat taxes? You have options. Learn about Streamlined Filing Compliance Procedures and penalties for late FBARs and tax filings with the tax experts at H&R Block.

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For most Americans who pack up and move overseas, selling your belongings and saying goodbye to family and friends means you’ve left behind your American life — which can put you in a sticky situation when it comes to U.S. taxes. You see, just because you relocate to a new country doesn’t mean you get to leave behind your U.S. tax and reporting responsibilities. As long as you’re considered a U.S. citizen, you have a tax obligation to Uncle Sam.

But there’s good news! the IRS Streamlined Filing Compliance Procedures are there to help you get caught up — penalty free (as long as you qualify).

If you’re an American living abroad and haven’t filed your annual U.S. income tax returns for several years — or maybe ever — since moving abroad, H&R Block Expat Tax Services can help. Understanding filing requirements in the U.S. and your host country can be overwhelming, but we’ll get you back on track.

What to do if you’re a U.S. citizen abroad and have never filed U.S. taxes while overseas

It’s common for U.S. expats to think they only have to file taxes for the country they live in now, causing them to accidentally overlook their U.S. tax obligations. In the face of honest mistakes, the IRS has historically shown lenience. However, you could face serious penalties for things like failure to file your foreign bank account reports (FBAR).

If you’re a U.S. citizen abroad and have never filed taxes while you’ve lived overseas, don’t panic — we’re here to help you through your options. You’ll have to get caught up on your U.S. expat taxes, and you’ll also have to get caught up on your FBAR.

You can do this with the IRS’ Streamlined Filing Compliance Procedures and Delinquent FBAR and Information Report Procedures. It can be a bit confusing, so if you’re unsure about your responsibilities or how to file, let us do the heavy lifting for you with our Expat Tax Preparation Services.

Catch up on past taxes with Streamlined Foreign Offshore Procedures

Offshore Streamlined Filing Compliance Procedures are an option for U.S. taxpayers abroad who need to get caught up on expat taxes. The program supplemented the now-defunct Offshore Voluntary Disclosure Program and helps U.S. expats who were unaware of their obligations catch up with prior year filings while minimizing penalties.

To qualify for the Offshore Streamlined Filing Compliance Procedures, you must:

  1. Have lived in a foreign country for at least 330 days during one of the last three years and not maintained a U.S. abode.
  2. Confirm that your failure to file U.S. tax returns and FBAR was due to an honest misunderstanding of your responsibilities.

If you do qualify for Streamlined Filing Compliance Procedures, you will need to:

  1. File income tax returns for the prior three delinquent tax years.
  2. File an FBAR (FinCEN Form 114) for the prior six tax years.
  3. Complete a statement of explanation detailing why your tax returns and FBAR weren’t filed.
  4. Pay the tax and interest due for the last three years.

If you don’t qualify for Streamlined Filing Compliance Procedures:

Don’t qualify for streamlined filing? You still have options to try and get caught up with minimal penalties:

  • IRS-Criminal Investigation Voluntary Disclosure Program
  • Delinquent international information return submission procedures

If it sounds like a little too much for you, we’re here to take over. Simply create an account and upload your documents to your tax portal. Our seasoned Tax Advisors will look over your documents and help you with next steps.

Avoid FBAR penalties with Delinquent FBAR and Information Report Procedures

Not only do you have to file U.S. taxes each year, but you may also have to report money in foreign banks with a Foreign Bank Account Report (FBAR). The actual form you’d file is FinCEN Form 114, and you’ll have to file it if the combined balance of all your foreign accounts totals more than $10,000 at any point during the calendar year.

If you’ve been filing your tax returns annually and reporting your income but were unaware of your foreign bank account reporting requirements and the associated FBAR penalties, or other informational reports, you might be able to claim amnesty with a different procedure.

Delinquent FBAR or International Information Return Procedures allow you to file and amend your FBAR and return to include omitted information. A detailed explanation is required with each report to make sure your failure to file was an honest mistake.

Need help with Streamlined Filing Procedures or a delinquent FBAR? Start now with H&R Block’s Expat Tax Prep Services

If you’re a U.S. taxpayer, and you honestly made the mistake of not fulfilling your U.S. tax and FBAR duties, H&R Block U.S. Expat Tax Services can help. While your process does require a few more steps, we’ll help you tackle them all. Want help? Get started now and we’ll take over from there.

Warning! The programs listed above are for U.S. taxpayers who have honestly overlooked their past U.S. tax responsibilities. Severe civil and criminal disciplinary action and penalties, such as FBAR penalties, can be assessed against taxpayers who have willfully avoided U.S. tax. H&R Block does not provide legal services. If you are concerned that your failure to file was willful, consult an attorney.

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2024 Tax Deadlines for Expats https://www.hrblock.com/expat-tax-preparation/resource-center/filing/deadlines-and-extensions/tax-deadlines-for-expats/ https://www.hrblock.com/expat-tax-preparation/resource-center/filing/deadlines-and-extensions/tax-deadlines-for-expats/#respond Tue, 25 Oct 2022 18:25:26 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=127 Find out what the Expat tax filing deadline is this year. The tax experts at H&R Block breakdown other deadlines and extensions for U.S. Expats.

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Just like most taxpayers in the United States are required to file U.S. tax returns and pay any taxes due by April 15 (unless an extension applies), expats living and working in another country as a U.S. citizen are also required to file.

However, if you’re living abroad, the rules for expat tax filing and deadlines are a little different.

Expat tax deadlines for 2024

Typically, expat tax deadlines are consistent each year, with the exception of 2020 and the Coronavirus extensions. Review coronavirus (COVID-19) tax impacts for U.S. expats living abroad.

The U.S. reports on a calendar-year basis, meaning you’re taxed on income on a January 1 – December 31 basis. Your expat tax deadlines are as follows:

Filing deadlineApril 15, 2024
Filing deadline for expatsJune 15, 2024
Filing deadline with extensionOctober 15, 2024
Deadline to pay tax dueApril 15, 2024
FBAR deadline (FinCEN Form 114)April 15, 2024 with an automatic extension to October 15, 2024

Do I have to pay U.S. taxes if I live abroad?

Expats are required to file U.S. tax returns each year, but sometimes tax benefits (like the Foreign Earned Income Exclusion and Foreign Tax Credit) available to them result in no U.S. taxes owed. However, if any of the following situations apply to you, it’s possible that you may still owe U.S. taxes.

  • You live and work in a country with lower tax rates than the U.S.
  • You’re not taxed on your foreign investments, or
  • You still receive income from U.S. sources

Estimated tax payment deadlines for U.S. citizens overseas

If you’re living outside the U.S. and usually owe U.S. taxes, you may need to make quarterly estimated tax payments to the IRS. An expat tax expert can help you figure those quarterly payments so you can avoid end-of-year penalties.

Quarterly Income and Expat Self Employment Tax Deadlines

1st installment quarterly income and self-employment taxesApril 15, 2024
2nd installment quarterly income and self-employment taxesJune 17, 2024
3rd installment quarterly income and self-employment taxesSeptember 16, 2024
4th installment quarterly income and self-employment taxesJanuary 15, 2025

Tax extensions for expats

Your U.S. tax information is still reported on a calendar-year basis even if you are living in a country that taxes on a fiscal year rather than a calendar year basis (the United Kingdom and Australia, for example).

If you’re worried about getting your taxes done by the deadline, requesting an extension can give you more time to gather information before the end of the tax year of the country where you live. H&R Block’s Expat Tax Services is here to help you with tax extensions — simply choose to file with an Expat Tax Advisor and they’ll handle your paperwork for you.

FBAR filing deadline

The FBAR filing deadline is the due date of your income tax return, though FinCEN has provided a regulatory extension to October 15th for most filers.

Visit the FBAR overview page to learn more.

Get your expat taxes done on time with H&R Block’s Expat Tax Services

No matter if you’re early, on-time, or behind, we’ve got a tax solution for you — whether you want to be in the driver’s seat with our DIY online expat tax service designed for U.S. citizens abroad or prefer to let one of our experienced tax advisors take the wheel.

Ready to get the tax season over with? Start the process with virtual Expat Tax Preparation from H&R Block today!

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