Frequently Asked Questions

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0. Tell me about Taxes for Expats

1. How do I know you are a legitimate business? Can you provide any references?

2. Should I look for a firm that does taxes in both US and my host country (for example UK & US) or work with two separate preparers?

3. Your website is really great but I am actually looking for a local accountant. Can you tell me why I should consider working with you remotely?

4. I would like to pay with a bank transfer - can I do that?

5. I need to figure out what my estimated payments should be. But I won't have final figures until later in the year. Can you prepare a rough draft for me now?

2. Oh-oh, I'm in trouble!

1. I have not filed for more than 5 years. What are my options now?

2. I'm a US citizen but was never issued (or just don't remember) my Social Security number. How do I obtain one?

3. Tax Law

1. I am a civilian working overseas in direct support of the US armed forces; do I qualify for combat pay income exclusion or any kind of extension of deadlines?

4. I owe tax! How come?

1. On my tax declaration, why do I have the Form 1116 twice? This form is repeated in the file but with different numbers on it. It appears that if we apply credits shown on both forms, then credits on foreign taxes will be $20,000 instead of $10,000. This in turn means that total tax liability for 2010 would be 0 instead of 7,000$. What gives?

2. I had paid foreign tax of $3,235. Form 1116 shows $3,005 as "disallowed" and $230 was utilized. Could you please explain this?

3. I am a sole proprietor with only $1,000 of net business income after deduction of business expenses. How come I owe tax? Shouldn't all of my income be excluded via the foreign earned income exclusion?

5. Investing & Taxes

1. I heard that expats cannot contribute to ROTH IRA. Is this true?

6. Self-Employment Income

1. What does the question "Was your activity at risk?" mean?

2. On Schedule C, should I report my US income or my worldwide income?

3. I run a small gym. I have a few dozen yoga mats. Should these be counted as inventory?

7. Switzerland

1. Are Pillar 2 & 3 deductible on the US Tax Return?

8. Canada

1. I work for the City of Toronto as a local government employee. Is my salary exempt from US Tax?

2. Are our donations to Canadian registered charities tax-deductible in the US?

9. Australia

1. Can I claim the tax I pay on my Superannuation Contributions (15%) as my Foreign Tax Credit?

2. Must my superannuation account be reported on FBAR and Form 8938?