Income Tax Returns

If you are a US citizen, you probably have an obligation to file a US tax return. US citizens, whether resident of the US or not have an obligation to report worldwide income to the US. You may have found your tax filing tedious and unclear. With our vast tax knowledge and tools available we will provide the clarity you deserve and make your tax filing fast and easy. Our expertise will assure you a stress-free tax experience and accurate tax returns on the highest level.

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US tax filing obligations

It may come as a surprise to you, but all US citizens including Expats have an obligation to file US tax returns to report their income. This is because the US taxes the worldwide income of all its citizens, as described in the following example.

‘Ben holds US citizenship but he has been living in Copenhagen since age 15. He works in Copenhagen, files and pays taxes in Denmark and has no financial assets in the US. Ben is still required to file US annual tax returns to report his income to the US.’

Fortunately, there are tax benefits in place to help expats reduce their taxes, it is important to be aware of these benefits in order to maximise your returns.

Reportable income

All income earned worldwide is subject to a tax filing obligation. This includes various income types that are reported on various forms included in the tax return. For example, employee wages, interest and dividends reportable on a schedule B, self-employment income on a schedule C, and capital gains and losses which are reported by filing a Schedule D and Form 8948. Another category of income would be rental real estate, royalties, partnership, S corporations, estates, trusts, REMICs and other supplemental income, disclosed using Schedule E.

Filing requirement

You only have a filing requirement if your annual income is above the minimum threshold. The minimum thresholds vary depending on various criteria. Below is the list of these criteria and their matching filing threshold, as applicable in 2019 and 2020.

Tax Year

2019

2020

Single under age 65

$12,200

$12,400

Single age 65 or older

$13,850

$14,050

Married filing jointly, both spouses under 65

$24,400

$24,800

Married filing jointly, one spouse age 65 or older

$25,700

$25,700

Married filing jointly, both spouses 65 or older

$27,000

$27,400

Married filing separately, any age

$5.00

$5.00

Head of household under age 65

$18,350

$18,650

Head of household age 65 or older

$20,000

$20,300

Qualifying widow(er) under age 65

$24,400

$24,800

Qualifying widow(er) age 65 or older

$25,700

$26,100

Tax Year

2021

2022

Single under age 65

$12,550

$12,950

Single age 65 or older

$14,250

$14,700

Married filing jointly, both spouses under 65

$25,100

$25,900

Married filing jointly, one spouse age 65 or older

$26,450

$26,450

Married filing jointly, both spouses 65 or older

$27,400

$27,800

Married filing separately, any age

$5.00

$5.00

Head of household under age 65

$18,800

$19,400

Head of household age 65 or older

$20,500

$20,500

Qualifying widow(er) under age 65

$25,100

$25,100

Qualifying widow(er) age 65 or older

$26,450

$26,450

These are all accurate when they apply to most types of income. Self-employment income is in a category of its own and has a much lower obligation threshold of $400 per tax year.

Now that we have determined who needs to file, there are a number of additional points and criteria that need to be understood. We will address these various points below.

Filing deadlines

It is not enough to simply file a tax return, your tax return and any forms included need to be filed by the return due date. For US citizens whose permanent place of residence and business is abroad, the filing deadline is June 15th of the tax year following the year being filed. Therefore the deadline for filing a 2022 tax return would be June 15, 2023. It should be noted that this is an extended deadline, meaning that the IRS grant a two-month extension from the original April 15th deadline to citizens who fall into this category as residents abroad. Therefore, a statement should be included in the return to affirm that the filer meets the requirement of the two-month extension. An additional four-month extension of time to file can be requested using Form 4868.

Taxes

Although the actual return can be filed until June 15th, the taxes are due on the original due date of the return which is April 15th. If they are not paid timely, interest begins to accrue. So if you will be owing taxes it is important to address this prior to the April 15th deadline.

Our Fees

Our base fee of $390 includes the preparation of the following forms and schedules:

Additional forms and schedules

Each additional salary

$30

Each additional bank or brokerage transaction

$30

Each additional K-1

$30

Business income

$30

Rental Property

$55

Form 8833 (Treaty-Based Position)

$55

Form 8863 (Refundable tuition credit)

$55

Form 8814 (kiddie tax)

$55

Form 8621 (PFIC reporting)

$55

Form 4797 (Sale of business and property)

$160

Form 8379 (Injured Spouse Claim)

$105

MFS Tax Return (Married Filing Separate additional tax return)

$105

Form 8865 – Return for partners of certain foreign partnerships.

$360

Form 8858 – Information return for owners of foreign disregarded entities and foreign branches.

$360

Forms 3520/3520A returns to report transactions with foreign trusts, ownership of foreign trusts and receipts of large gifts from foreign persons.

$440

Each additional salary

$25

Each additional bank or brokerage transaction

$25

Each additional K-1

$25

Business income

$50

Rental Property

$50

Form 8833 (Treaty-Based Position)

$50

Form 8863 (Refundable tuition credit)

$50

Form 8814 (kiddie tax)

$50

Form 8621 (PFIC reporting)

$150

Form 4797 (Sale of business and property)

$145

Form 8379 (Injured Spouse Claim)

$95

MFS Tax Return (Married Filing Separate additional tax return)

$95

MFS Tax Return (Married Filing Separate additional tax return)

Up to 5 accounts

$150

6-10 accounts

$150

11-20 accounts

$150

Form 5471 - Information return for US officers that needs to be filed by a citizen who is a director of, or shareholder in a foreign corporation.

$325

Form 8865 – Return for partners of certain foreign partnerships.

$325

Form 8858 – Information return for owners of foreign disregarded entities and foreign branches.

$325

Forms 3520/3520A returns to report transactions with foreign trusts, ownership of foreign trusts and receipts of large gifts from foreign persons.

$400

10% of your friend’s first year’s payment off your next year’s tax return’s invoice. Just make sure your friend lets us know who referred them!

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