Individuals/Personal Tax Return Services

Individuals/Personal Tax Return Preparation

Our Personal Tax return Services extend to both U.S. citizens and non-resident aliens present in the United States.

US Expats- Tax Services for U.S Citizens or U.S. green card holders living and working outside of the United States

U.S. citizens and U.S. green card holders living and working outside the United States are required to file a U.S. tax return annually and report their worldwide income if they continue to meet the annually indexed minimum tax filing threshold amounts, consisting of the standard deduction and exemption.

Special Tax Laws for residing & working outside of the United States

Residing and working outside of the United States may permit the application of special tax laws and regulations when certain qualifications are met, permitting the offset of U.S. tax obligations in part or in their entirety. These rights of offsets are the result of the integration between the Foreign Earned Income Exclusion (FEIE), Housing Exclusion (HE) and/ or Housing Deduction (HD) available on Form 2555 – Foreign Earned Income and Foreign Tax Credits (FTC) available on Form 1116 – Foreign Tax Credit. The Foreign Tax Credit on Form 1116 may be considered if the foreign country has a foreign income tax.

Qualification for the Foreign Earned Income Exclusion Filing of Form 2555 & Form 1040

  1. Tax Home Test (THT) and
  2. Either a or b:
    1. Bona Fide Residence Test (BFR)
    2. Physical Presence Test (PPT)

Form 2555 or Form 1040 may not be filed until meeting both of the above two tests. Typically, the Physical Presence Test is used in years of transition that is in both years of expatriation and repatriation.

Typically, the Bona Fide Residence Test is used in intermediary years where the taxpayer is living and working outside the U.S. for a full calendar tax year.

In addition to the Foreign Earned Income Exclusion (FEIE) there is the Housing Exclusion (HE) for employed persons or the Housing Deduction (HD) for self-employed persons. Qualified foreign housing expenses are typically much higher than a taxpayer’s taxable employer-paid housing income/allowance, or living quarters. Additionally, it does not matter who pays for these qualified housing expenses. Regardless of whether you, the employee, pay directly for these costs or your employer directly pays or reimburses you for these costs, they are still includable as qualified foreign housing costs for determining the Housing Exclusion or Housing Deduction. However, these costs may also need to be included in your employment income, depending on if these costs are paid directly or reimbursed by your employer as they are considered taxable compensation.

Form 2555

Foreign Tax Credit

There are three ways U.S. expats can avoid double taxation while abroad on a foreign assignment: The Foreign Earned Income Exclusion; the Foreign Housing Exclusion- (if employed) or/ and the Foreign Housing Deduction – (if self-employed); all found on Form 2555- Foreign Earned Income and the Foreign Tax Credit found in IRC Sec 901 and on Form 1116- Foreign tax Credit.

Form 1116

Foreign Nationals- Tax Services for non-U.S. citizens or non-U.S. green card holders living and working in the United States

Whether you have been assigned, seconded or locally hired to work in the United States (U.S.) from a foreign country, determination of your optimal tax-filing status in the year of your arrival to the U.S. is rarely straightforward, and tends to be quite complex. There are a multitude of unique and highly complex U.S. domestic tax laws and regulations affecting the U.S. tax residency of foreign nationals, both non-resident aliens and resident aliens, in addition to income tax and social security tax treaties.

Non-Resident Aliens

As a non-resident alien foreign national in the United States, if you breach the Substantial Presence Test (SPT) – in any calendar tax year through U.S. presence that is more than 183 days, with a two-year look back test that accrues additional days to the current year on a fractional basis – then you become a U.S. resident alien who is taxable in the United States on your worldwide income. This is the same case for all U.S. citizens or U.S. green card holders. There are exceptions to this test if you are on certain kinds of visas or meeting certain conditions. The tax rates in this instance are the applicable U.S. graduated rates of tax.

Non-resident aliens in this situation will also be subject to non-recoverable U.S. social security taxes depending on their visa type.

Dual-Status Aliens

In cases where a foreign national in the United States has two statuses in a single calendar tax year (i.e. a non-resident alien changes to resident alien status, or vice-versa), they become dual-status alien filers in recognition of these two statuses. Dual-status alien tax filers, if married, must file separately and cannot file jointly. Dual status aliens may not use the Head of Household filing status or the Standard deduction.

Resident Aliens

Additionally, there are opportunities for individual taxpayers entering the United States at some point in the tax year whom do not satisfy the Substantial Presence Test that year, to elect to be treated as U.S. resident aliens from the date of entry forward. This choice to be considered a U.S. resident alien from the date of entry onward may benefit taxpayers with mortgage interest or other itemized deductions not allowed to U.S. non-resident aliens. This may also be beneficial in cases where there are foreign losses, like foreign rental losses, etc. And in some cases, it may facilitate breaking residence from the individual’s former country.

Likewise, there is also the option for married persons to become U.S. resident aliens for the full year. This may benefit taxpayers by using the married joint-filing graduated tax brackets, as opposed to the married separate-filing brackets, which are halved. This is particularly useful when a spouse is not working and is earning no income.

FinCEN FBAR Form 114- Report of Foreign Bank and Financial Accounts

All United States (U.S.) persons (Definition under IRC Sec 7701(b)) having a financial interest in or signature authority over any foreign (non-U.S.) financial account(s) with aggregate (not individual) fair value balances exceeding $10,000 USD at their individual highest point in the calendar tax year, must report such relationships to U.S. Treasury by e-file on FinCEN Form 114.

A person may be an individual (even minors) and legal entities including but limited to a Limited Liability Company (LLC), a Corporation, a Partnership, a Trust and Estate.