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Expatriate Tax Return – Ways to Save

Sunday, April 24th, 2011

Starting To Think About Filing Your Expatriate Tax Return? Wait! Read This First: How to Save Money on Your US Expat Taxes

Living and working in a foreign country, whether it is temporary or permanent, can be a fulfilling and rewarding experience. Moving to another country, although exciting, does come with some challenges and requires that you learn a bit of new information as it relates to your US taxes. In order to reap the full benefits of living abroad you need to do some research regarding your expatriate tax return obligation before you need to file. No one likes filing their taxes, and certainly no one likes to spend money unnecessarily, so saving money is crucial. This article will provide you with four great ways to save on your US expat taxes.

Take advantage of the Foreign Tax Credit & Foreign Earned Income Exclusion

While you’re living abroad and filing your US taxes, it is important to make sure that you take full advantage of Form 1116 and Forms 2555, otherwise known as the Foreign Tax Credit Form and the Foreign Earned Income Exclusion, respectively. The Foreign Tax Credit gives you a credit on your US expat taxes for the amount of money you have paid in tax to a foreign government. The Foreign Earned Income Exclusion helps you by excluding a big chunk of your foreign earned income from your US taxes. This is important because even as a US expat, all of the income that you make outside the United States is subject to identical tax rates as someone who is working and living inside of the US. That is where Form 2555 comes in. By completing this form, you can exclude up to $91,500 USD of income earned abroad from your US expat tax return. While including potential deductions of housing and living expenses, it is possible to counterbalance most if not all of your tax liability in a given calendar year.

The Foreign Tax Credit (or Form 1116) is different than Form 2555 but they work together to help you save money on your expat tax return. It is important to note that many people take a wrong turn when using these two forms by assuming their taxes will be offset by the numbers they have worked out, and they decide not to bother filing their expat taxes at all. Clearly this isn’t going to do you any good! If you earn money abroad you will need to file in order to receive these tax breaks and avoid being hit with penalties.

Adjust your Foreign Housing Credit for the country you live in

A second tip for filing your US expatriate tax return is to make sure your Foreign Housing Credit is adjusted for the country you live in. The rates vary from country to country which can drastically affect the end result, so it is extremely important to make sure that this is adjusted. As a US citizen living and working abroad, you may be eligible to deduct some of your housing costs from your income in order to save some money on your taxes. In order to qualify for this deduction, you need to meet the “bona fide residence test” or the “physical presence test.” This test ensures that you are indeed living and working abroad. The IRS allows this deduction because they recognize that you may need to spend more money on housing outside of the US. Generally, the deduction is for a maximum of $27,450 or 30% of your Foreign Earned Income Exclusion and you deduct this amount from your gross income for housing costs. As mentioned, this rate is adjustable depending on where you are living. For example, compared to living in the US, places such as London, Paris, Singapore, Hong Kong, Dubai and Perth all qualify for a much higher deduction rate than the standard rate due to the higher costs of living. By being aware of the changing rates associated with your country of residence, you could end up saving a lot of money!

Use the most advantageous foreign exchange rates

You can also save a lot of money by making sure that the accountant who is filing your expatriate tax return is using the most advantageous foreign exchange conversion dates. When filing your taxes, you can choose different foreign exchange periods such as annually or on a specific day. Making sure you make the right choice as to what period you choose can end up saving you a lot of money in the long run. For example, if you receive a $10,000 bonus on June 1st and the foreign exchange rate is lower than the monthly number has been, you may want to use the specific date to translate it into US Dollars (as everything needs to be filed in US dollars).

Don’t get overcharged for your expatriate tax return preparation fees!

Finally, it is imperative to hire a qualified expert to prepare your US expat taxes and agree upon and pay one flat fee to the person who is filing your expatriate tax return so that you aren’t surprised by the final bill. It happens all too often that expatriates believe they will be paying one amount only to be hit with extra charges and fees on their final bill. Many companies don’t disclose their prices or they quote you one price only to have add-ons for each additional service. This obviously means that the tax bill can increase over the course of preparing the return, and you do not want to pay more than you can afford or more than you were expecting. You need to find someone you are comfortable dealing with and this likely means a company that has very transparent prices!

As you can see, there are numerous ways to save money on your US expatriate tax return. By understanding the credits and exclusions that are available to you as an expat, you can ensure that you are well informed and knowledgeable about the ways can save you money. For more information about how the various components of an expatriate tax return work please have a look at our new series Your Expat Taxes Explained.

 

 

Article Source: http://www.articlesbase.com/taxes-articles/expatriate-tax-return-ways-to-save-4650335.html

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About Greenback Expat Tax Services

Greenback Expat Tax Services specializes in preparation of US Expat Taxes for Americans living abroad. Incorporated in New York, Greenback’s CPAs have 30+ years specialist experience in US expat taxes. We offer a flat fee ($329 for a federal return), simple process (we don’t make you do all the work!) and, most importantly CPAs who are experts in the ins-and-outs of expat tax returns. For more information and to download a free guide to US expat taxes, visit www.greenbacktaxservices.com

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Custom Notifications,Indian Custom Notification,CBEC Notifications

Sunday, April 24th, 2011

Indian Custom notifications majorly indicate the Indian Custom duty which is a big source of India’s revenue

Indian government update custom notifications from time to time and these notifications are very much helpful for importers and exporters in India. Central Board of Excise & Customs (CBEC) is an apex Government body which releases these custom notifications. Central Board of Excise and Customs (CBEC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. CBEC is also responsible for prevention of smuggling into our country and  administrative matters pertaining to customs, central excise, Service tax and also narcotics to some extent .Custom duties are levied on the goods and at the rates specified in the schedules to the Custom Tariff Act, 1975.

Custom notifications are different for different merchandise and are based on coordinated duty schedule which defines the duty to be levied on particular goods as a fraction of its assessed value. The custom officer after physically investigating the goods assesses the value of the goods and then ascertains the custom duty applicable on those goods according to the customs tariff heading.

CBEC, RBI, circulars, public notice, Service tax and central excise are all the part of custom notifications which is declared by central board of excise and customs.

CBEC frequently changes rules and taxes on various types of goods. Custom Notifications for different products are customized from time to time according to the need of the industry and economy. Importers and exporters need to update themselves regularly through various sources. Every merchant would like to keep himself updated with the latest notifications released by CBEC pertaining to his business but they do not have sufficient resources to get this valuable data. Traders can however take help of various valuable sites which have latest information on CBEC. These sites can serve as a very useful resource for most updated information on custom notifications, CBEC Notifications, Indian custom notifications, Central excise and service tax.

 

There are several global network portals helping the people involved in foreign trade for a long time now. Any merchant who is dealing in import export can check the most recent data about Indian Custom Notifications, custom duty, Circulars, Public Notices, CBEC, RBI, CBEC Notification, Tariff, Non-Tariff Notifications, Central Excise etc on these sites.

Article Source: http://www.articlesbase.com/taxes-articles/custom-notificationsindian-custom-notificationcbec-notifications-4659344.html

About the Author

www.custom-notifications.com is leading online web portal serving the Exim community for a long time now. It’s a sister concern of www.cybex.in. You can check the most modernized Indian Custom notifications 2011, Custom Notifications , Indian Customs, Circulars, CBEC Notification, RBI, Central excise notifications, Service tax Notifications, etc on www.custom-notificaions.com absolutely free of cost

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I Received Certified Letters From the IRS – Help!

Sunday, April 24th, 2011

No one likes getting a notice from the IRS, unless it is a sizeable tax refund check. The fear of an audit has become a bugaboo for American taxpayers. Why is this? One obvious explanation is that audits are rather rare. Only about 1.1 percent of all tax filers were audited by the Internal Revenue Service last year. That’s around 1.6 million people. And of those, almost a third of the audits were performed on Earned Income Tax Credit (EITC) claims, which come from low-income wage earners.

The IRS is also unpredictable. They have three different types of audits that are open to them. The most popular and inexpensive option is to simply send a letter. Also known as a correspondence audit, these missives tell the taxpayer that he needs to send in proof of a deduction or tax credit, or goes straight for the jugular and simply tells the taxpayer that the IRS changed his return and he now owes more money, due immediately. Most people who receive these types of notices don’t even realize they are being audited. It would be different if the taxpayer was told to contact a specific IRS agent, but these correspondence audits are all handled through snail mail.

More traditionally, the IRS may schedule a desk or office audit of a person or a business. In this instance, the taxpayer travels to his local IRS office and presents financial records. Walking into a desk or office audit unprepared and unaware of the limits of the audit can lead to the IRS agent gaining full access to the taxpayer’s finances. The problem is that IRS auditors are really good at finding what they are looking for.

The third and final type of IRS audit is arguably the scariest. A field audit gives an agent the option of simply showing up at your doorstep and asking to see your financial records. More often than not, they will actually make an appointment. But unannounced visits are not uncommon.

What is an audit?

As scary as they may be, an IRS audit is typically not a criminal accusation. These investigations are conducted because the IRS believes a taxpayer either made errors or intentionally cheated on his tax returns. In the end, they simply want to collect the money they think you owe them.

If a taxpayer ends up owing money at the end of an IRS audit, it becomes a tax debt. The IRS agent will always try to collect as much money as he possibly can. It is his job to exhort the taxpayer to pay what the IRS thinks he owes them.

Why you need tax settlement help

The IRS is not your friend! Even if a smiling agent comes to your home and compliments your décor, he is, in fact, still working with the best interests of the government at heart. An IRS agent knows that you don’t know the U.S. tax code nearly as well as he does, and he will use that fact to urge you to pay as much as you possibly can. Your best defense against this is to learn everything in the Internal Revenue Manual or to hire an experienced tax resolution services company.

You should never participate in an audit (even one that takes place using the mail system), no matter where it takes place, without proper tax representation. After examining your finances, tax situation, and IRS debt, a talented tax advisor will help you figure out how to pay. These arrangements often involve payment plans with manageable monthly installments. It is important to note, however, that if you miss even a single installment, the IRS may levy your bank account for the total amount due and begin the process toward aggressive collections actions.

 

 

Article Source: http://www.articlesbase.com/taxes-articles/i-received-certified-letters-from-the-irs-help-4651828.html

About the Author

For more information about what an IRS audit is or if you need tax settlement help you should check out http://www.txmstr.com.

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What is Tax Fraud and its consequences

Sunday, April 24th, 2011

In case you violate the tax law by misrepresenting your income or fudging numbers to avoid paying taxes you most likely be committed by tax fraud. Tax Fraud implies an individual paying less taxes or wrongfully soliciting for repayment of tax by acting in a unethical way. Tax Fraud is a planned action by a person and is not an act of negligence through the concerned person. Fraud of Tax is a criminal offense and as a result of it the government needs to endure great loss in revenue for the people submit less money as tax to the government. Those found to be cheating on their taxes would possibly be subject to fines, penalties or imprisonment. Tax evasion is a general term which refers to all those techniques and efforts that are implemented by numerous companies, individuals, and firms to avoid taxes through illegal means. Tax evasion usually involves false representation in the earnings of a firm or company to the tax authorities.

A person goes for Tax Fraud for he wants to pay less money to the government as tax and save more money for himself. A few of the ways a person be able to break the tax law and commit tax fraud comprise: Claiming false deductions, Concealing or transferring property or income, Intentionally varying the income, Over reporting the amount of deductions, Possessing two set of books, Recording personal bills as business expenses and Applying false amounts in books and records. Tax collection efficiency has two sides to it: Tax compliance/tax evasion on the part of the taxpayer, and honesty/corruption on the part of the tax collector. Tax evasion involves collusion between the taxpayer as well as the tax collector. Corrupt collectors also are considered one of the reasons for Tax fraud occurrence.

The IRS warns that tax scams, fraud and outright cheating could create tax season a lot less pleasant than it already is in case you get caught. Tax crimes comprise submitting a false tax return, tax evasion, submitting false documents, failure to collect employment taxes, failure to pay for taxes, and failing to file a tax return. The penalties for criminal tax fraud are harsh and serious. Sanctions are legal measures used to deter individuals from committing more benefit fraud. There are three possible sanctions: Prosecution, Administrative penalty (an extra amount of money that should be paid back along with your overpayment) and Formal caution. Prosecution is the most critical impact of a fraud investigation. The individual will be taken to court and prosecuted for the offence they’ve committed. A guilty verdict can result in a range of sentencing, from costs and a fine, through community service, to imprisonment. An Administrative Penalty is offered when the case is not so serious and is an extra amount of money to pay, which is calculated at 30% of the total overpayment. A Formal Caution can be given if the individual admits they are guilty of the offence. The caution will stay on Department for Work and Pensions (DWP) records for five years. If the person commits an additional benefit offence while they have got a caution on record, it is almost distinct that they will be prosecuted for the new offence. In lots of cases, IRS will prohibit you from the benefit of specific credits if you are guilty of fraudulently claiming the credit.

So while all of us hate paying taxes and want to pay as little as possible, don’t fall for any of these schemes. You’ll end up paying your taxes in the end. You can either pay them now and avoid jail, fines and the interest on your original tax bill or you can pay them later plus interest, fines and possibly enjoy a holiday at a federal resort. We also urge you to keep in mind the Golden Rule: If something seems too good to be true then it probably is.

 

Article Source: http://www.articlesbase.com/taxes-articles/what-is-tax-fraud-and-its-consequences-4654025.html

About the Author

KDK Accountancy Corporation with Katz, Daitzman & Kiesel CPAs, LLP (an Orlando CPA Firm) is an accounting firm offering comprehensive services to Central Florida businesses and individuals.Our wide range of services include accounting, bookkeeping, tax preperation, tax planning, IRS problem resolution, and all areas of financial and estate planning. KDK Accountancy Corporation is a certified Quickbooks Pro Advisor and can work with clients with all aspects of implemeting and perfecting accounting software performance in the business environment.

 

http://www.orlandocpa.net

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