Tax season 2013 has arrived. American Taxpayer Relief Act of 2012 (ATRA) that was signed into law on January 2, 2013 made permanent or extended a number of tax provisions that expired in 2012 and 2011. What are key deductions for US expats in a tax year 2012?
- Foreign earned income exclusion. The maximum amount of exclusion is $95,100. Each spouse is eligible to claim up to $95,100 in foreign income exclusion if s/he has earned income.
- Foreign Housing Exclusion. American expats who meet either bona fide residence test or physical presence test can deduct eligible housing expenses. The amount of housing exclusion has been increased in a tax year 2012 across several geographic locations.
- Foreign Tax Credit. US expats can claim foreign tax credit for overseas taxes (foreign income tax) on a dollar-for-dollar basis on US expatriate tax returns.
What are the filing requirements for American expats in a tax year 2012?
- American expats are required to file a US expatriate tax return if they meet filing requirements based upon a gross income, filing status and age. It is mandatory to file a US expat tax return to claim foreign income exclusion and other deductions.
- Americans living abroad might be required to file a state return.
- American expats are required to file the FBAR if the aggregate value of foreign financial assets exceeded $10,000 at any time during 2012.
What is a tax return filing date for Americans living abroad?
- The official tax return due date is April 15, 2013. However, Americans living abroad get an automatic extension until June 15, 2013.
- American expats must remember that they have to pay any tax due by April 15, 2013 because the interest will start to accumulate after April 15. Penalties will be assessed after June 15.
How early can Americans living abroad file a US tax return?
- Due to the fact that Congress took considerable time to pass the American Taxpayer Relief Act of 2012 the actual filing date is postponed this year. The IRS will officially start accepting tax returns electronically on January 30, 2013.
Delinquent Americans living abroad still have a chance to participate in the IRS streamlined program if they meet the requirements. Contact ExactCPA if you would like further information on filing.
Very helpful article to put on your blog! I’ve lived in Thailand for a couple of years now, and I am only recently beginning the steps to get compliant with my US taxes. From nosing around, I’ve realized that a fair number of my fellow expatriates are behind on filing their US taxes. I am currently gathering all significant information concerning US expat tax law. My plan is to eventually get advice from an expat tax expert and/or attorney. The IRS and US government have various laws and programs that taxpayers can refer to or join when figuring out how to file taxes while abroad. It was difficult for me to figure out which regulations and programs apply to me and my financial situation. I’m thankful that tax preparation businesses are around to aid us overseas citizens who are trying to get caught up. Only now am I realizing that ignoring my tax returns can really affect me should I ever decide to move back to the US.
ReplyDelete