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Frequently Asked Questions

1. 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 plan to call a few companies to discuss my situation and then pick the one that I like most. Is this something that you offer?

2-A. Working With TFX - Pricing & Payments

1. Why does a 1040NR cost more than 1040? My return is very simple!

2. I received an Engagement Letter which only shows services and costs. What about the payments I have already made?

3. I am a beneficiary of a family trust. Can you tell me if I have to report it and how much it would cost?

4. I own a foreign corporation with my 4 siblings- all US citizens - do we need separate forms 5471?

5. I am a beneficiary of a family trust. Can you tell me if I have to report it and how much it would cost to have you prepare the necessary forms?

6. I see your flat fee includes 10 brokerage transactions. I have a lot of brokerage transactions, can they be grouped?

7. Can you produce for me a quick estimate of how much tax I owe?

8. Are forms FBAR & 8938 something that I can prepare myself? Do you recommend doing this?

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

10. I made dozens of stock sales over the year. How will this affect the cost of preparation of my tax return?

11. I'd like you to file an extension for me, how do I request that?

12. How many PFIC forms do I need to fill out?

13. I would like to prepay my engagement fully, how can I do that?

14. I would like you to prepare Form 5471 for me on standalone basis. Is this something you could do and how much would it cost?

15. I have to make a (small) amendment to an already filed return. How much would it cost?

16. I am not a US citizen or GC holder, but I have had a US brokerage account. I sold my stocks and my US broker withheld capital gains tax. Can I get this back and get a refund?

2-B. Working With TFX - Computer Systems

1. Something doesn't work and I got some kind of an error message. What should I do?

2. How do I create a new Tax Questionnaire?

3. I'm done with the Tax Questionnaire - what do I do now?

4. I can't seem to open the PDF file you prepared - please help!

5. I'm a returning client and when I try to create a new Tax Questionnaire for 2014 the "copy from previous year" pull-down is not working (can't select any previous year - no year numbers show up).

2-C. Working With TFX - Information Gathering

2. What if I do not have some (or all) of the documents you normally ask for?

3. My employment contract states that my employer pays all of my local government taxes and my take home pay is net of any tax they pay.  How do I reflect this in my tax questionnaire?

4. I don't have a scanned copy of a certain document that you need. What can I do?

5. I have a US LLC - what do I need to file and how much does this cost?

6. I plan on using your company again next year. On that note, I start a new job soon. How should I fill out the W-4 to minimize my tax hit next April (ie. number of dependents, etc.)?

7. I would like to get assistance with local (non-US) tax prep - can you assist?

8. I don't have an SS#, should I file my returns without one? I've heard the IRS can issue me an IRSN - what's the point of getting a SS#?

9. My foreign address is incorrect on the state return. Zip code box is empty and postal code is shown next to the city. Please correct my address to the right format.

10. My personal information (such as name or address) contains special European alphabet characters (such as Ä, Ö or ß). Should they appear on the US tax return?

11. I have to complete FAFSA for my college tuition but my information for my tax return is not ready yet. What can I do?

12. 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?

13. I have a large number of tax documents. Can I mail the hard copies to your NY office and what would be the cost of processing them?

14. I don't have a Social Security Number, yet but I want to get current with my US tax returns - should I wait until I obtain it to begin the process?

15. I don't want to provide my SS# online - what can be done?

16. How do you account for different tax years between US & resident country (i.e. Australia)?

17. I had my current year return prepared elsewhere but plan to use your services next year. I believe that I should be paying estimated payments but my last CPA did not provide the estimated vouchers. How can you handle this issue now

18. How do I know if I should file separately or a joint return with my (NRA) spouse?

19. I completed my Tax Questionnaire. Could you please look at it and let me know if it has everything you need to proceed?

3. Uh-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. I'm being asked to complete the form W-9 / W-8 by my [bank / online marketplace]. What is this and what should i do?

4. I received a letter from my non-US bank asking to verify my US tax status. I haven't filed - what do I do?

4. I owe tax! How come?

1. I heard that expats must now pay 110% of their previous year's tax bill by January 31st. Is there any truth to this?

2. I live in a high tax, high social benefit country (i.e France) and pay over 40% tax, how can I possibly owe tax to the US?

3. I live abroad but work for an American company. They are withholding my US federal and state taxes automatically. How can I stop this?

4. Who is a US Person in the eyes of the IRS?

5. 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?

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

7. How come I owe interest on tax due even though I file before the June-15th expat tax deadline?

8. 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?

9. I am unable to pay the whole amount of tax due. What are my options?

10. I live in a high-tax country and paid a large amount of tax in my resident country. Why do I still owe tax? Have you applied the foreign tax credit that I reported?

11. I am self-employed. TFX prepared my tax return but I received an IRS fee notice because I did not make appropriate payments before Apr-15. I'm unhappy.

5. Family

1. My spouse is a non-US citizen/GC holder. Can I choose to file joint one year, and then single the next? How often can I make this choice?

2. I pay alimony and/or child support to my ex-spouse. How can I report this expense and can it reduce my tax?

3. I receive alimony and child support from my ex-spouse. How this will affect my taxable income?

4. My spouse is not a US citizen/GC holder. We file a joint tax return in the US. My bank is requesting that she complete a W-9, but she's not a US citizen. Does she need to file one?

5. My children are US citizens but do not have SS#. Should I obtain them? Will this help with my taxes?

6. My spouse doesn't have a SS# - what should I do? Do I need an ITIN for my spouse? 

7. I have non-US children (no SS# or ITIN) - can I file Head of Household (HOH)?

8. In the unfortunate event that my spouse passes away (hopefully not for many years!) , how will the IRS know?

9. I am a U.S. citizen and I received an inheritance. What are my reporting requirements in the US.?

10. My husband and I paid income tax on our income, salaries and self-employment combined. How can I separate this?

11. My spouse is not a US citizen/GC holder, but we want to file jointly. Can you file an ITIN for them?

12. I'm a US citizen residing in the US. I inherited land/house abroad last year. Do I have to file any special forms with the IRS?

13. I received a pension fund as part of an inheritance during the tax year. How should I report it and will this generate tax due?

14. My family and I I live abroad. Can I still utilize the earned income credit?

6. Self-Employment Income

1. What does the existence of USA Totalization Agreement with country X actually mean?

2. I own a foreign corporation and pay myself a salary as an employee. How do I report this to the IRS?

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

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

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

7. Switzerland

1. I receive Swiss Social Security benefits. They are non-taxable in Switzerland, why should I pay tax in the U.S. on that income?

2. Am I being taxed twice on my Swiss pension? According to Art. 18, of the Tax Treaty I'm required to report this as taxable income here in Switzerland. This is also entered as taxable income on my US tax return. Does this mean I really am being taxed twice on my pension income or is there some calculation or deduction (like the foreign tax credit) in another part of the form that effectively reduces the taxable amount or the actual tax on the US pension?

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

8. Canada

1. Do I still need to file form 8891?

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

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

4. Do I need to report my RRSP/TFSA on the FBAR report to the US?

9. Australia

2. How does the IRS treat the Superannuation Fund (contributions and withdrawals)?

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

4. I receive approximately $34,000.00 AUD in annual Workers Compensation payments from the State of Victoria, Australia. Does my Australian Workers Compensation, taxed in Australia, count as income here in the United States?

10. UK

1. Are charitable contributions to UK based institutions (with adequate tax exempt status) deductible?

2. I have UK ISA account with stocks. It contains a mixture of OEICS, investment trusts and individual shares. Do I have to report it as PFIC and how much would it cost?

3. Article 11 of Tax Treaty between U.S. and UK reads: "Interest arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in that other State." Based on that, I believe bank interest earned on UK savings should not be included in U.S. taxable income.

4. Should UK ISA and SIPP be reported on U.S. tax return as foreign trusts?

5. Is my pension taxable? Employer Pension vs Individual Pension? Can my SIPP, ISA, or GPP plan be deferred? Please explain!

11. France

1. I live in a high tax, high social benefit country (i.e France) and pay over 40% tax, how can I possibly owe tax to the US?

2. I have own my own French company (SARL). Do I need to file form 5471?

12. Dealing with the IRS

1. I owe money to the IRS for prior years, but am slated to receive a refund this year - how will this work?

2. I received an amended W2 from my employer, what do I do?

3. I formed a corporation and closed it in the same year. It this a dormant corporation? Do I need form 5471?

4. I am U.S. citizen. My spouse is not a U.S. citizen and doesn't have a green card. What documentation for my spouse do I need to provide?

6. I have recently moved, do I need to do anything, and if so, what do I do? 

7. What is the definition of a United States Person?

8. I plan to send my return with a courier service (such as FedEx or UPS). What phone number should I indicate when requested by the courier?

9. I have an Non-resident alien spouse - how can I e-file?

10. I have an H1B Visa - what is my filing requirement?

11. 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?

12. What is the process for filing a state extension?

13. I live abroad but want to make sure that I don't have to file or pay State tax return. What is the most sure way to do this?

14. How can I pay the IRS if I owe them money?

15. I haven't received my refund and I also haven't had any correspondence from the IRS to indicate that there's a problem. What should I do?

16. I am already behind on my tax returns. Should I strive to file by this year's tax deadline?

17. By when do I have to send in my return for the IRS to receive it?

18. I have checked many times over the last several months and my status remained as "being processed". Why is this happening and what can I do about it?

19. How can I check the status of my federal / state refund online?

20. How can I check if my federal tax return was processed online?

21. My tax return will not be completed by October 15th. Can I request additional extension from the IRS?

22. I work for a US company but have not received a W-2 -- what can I do?

23. I have receipts for various expenses allowed for deductions in my resident country. Can I claim deductions for the same expenses on the U.S. tax return?

24. I am not going to get my local country tax declaration (i.e - France, Switzerland) in time for the October deadline -- what do I do?

25. Do I owe estimated Taxes? I was unaware. What do I do?

26. My spouse is not a US citizen/GC holder. Do I have to snail-mail all of my tax returns? This is annoying, what can I do?

27. I've been told that I can get a refundable child tax credit ($1000) while living abroad. Is this true? Can you help?

28. I'm a senior citizen and live on social security - how do I know if I need to file a tax return?

29. I registered a dormant corporation, but it did not have any activity this year and I will dissolve it in the same year. What filing requirements do I have?

13. FBAR / FATCA

2. Does a government-mandated social security fund have to be reported here?

3. Is it necessary for me to report my child's bank account on my FBAR (it's over $10,000)? Does she have to file her own FBAR?

4. My FBAR report says 'acknowledged' --- will it get 'accepted'?

5. The value of my non-US bank account only exceeded $10,000 for one day. Do I still have to file FBAR?

7. Shoud I report accounts with negative balances (mortgage, credit lines)?

8. How can FBAR be filed?

9. Do I have to report my bank accounts which have been closed during the year?

10. How do I know if my bank has registered with FATCA?

11. For how many prior tax years will foreign banks be required to report US citizen bank accounts?

12. Is there any reason I should close one or more of my foreign bank accounts because of FATCA?

13. What information will the IRS receive about my foreign financial account(s)?

14. Does FBAR or FATCA require me to report my foreign real estate?

15. In which countries do the IRS have active FATCA agreements?

16. How does the IRS know if I have a foreign bank account?

17. Does required FATCA reporting have a statute of limitations?

18. Am I required to prove that I don’t have any foreign financial accounts?

19. Is there a way for me to check if my past FBAR was filed (like how I can check my tax transcript for past returns)?

20. How many FBARs should two spouses file?

14. Streamlined Procedure

1. I just found out that I need to file US taxes and want to get up to date. Should I contact the IRS beforehand and let them know I will be sending in my forms soon?

2. What happens if you analyze my situation and determine that the Streamlined Procedure won't be an option - what can I do in that case?

3. If my tax liability exceeds $1,500 for any of the three years, am I still eligible for the Streamlined Procedure?

4. If I have already been accepted into the Offshore Voluntary Disclosure Program but I qualify for the Streamlined Procedures, can I request to switch into the Streamlined Procedure?

5. Can husband and wife file together for the SP? Is our fee the same for one person or married couple?

6. I mailed my return to the IRS some time ago but have not received any word from them. How long do they usually take to respond in the case of Streamlined Procedure and back taxes?

7. I am unable to open the Streamlined Non-Resident Questionnaire from the link in Final Instructions https://www.irs.gov/pub/irs-pdf/f14653.pdf

8. How will IRS inform me about my Streamlined Procedure filing?

9. I heard about another program called OVDP. What is the difference between it and the SP and which do you recommend?

10. I am up to date with my tax returns but I have not filed FBAR for ALL my non-US accounts -- what are my options?

11. I'm up to date with my tax returns, but I did not file 5471 for my foreign corporation. What should I do?

15. Expatriation

1. How much time can I spend in the US after expatriating and still be taxed as a non-resident?

2. I plan to expatriate this year. I am current on my IRS tax obligations. What is the rough timeline for the process?

3. I plan to expatriate this year. I am currently behind on my IRS tax obligations. What is the rough timeline for the process?

4. I had an appointment at the embassy, but I have not received my certificate of loss of nationality. Am I done? Can I file my final return and 8854, or do I need to wait?

5. I have already done the immigration part of giving up my US citizenship. What should I do now (and how can TFX help me)?

16. Obamacare and US Expats

1. What are the requirements for Expatriate Coverage under Health Care Reform?

17. US Pensions

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

2. How much can I put to my IRA account for this calendar year? Do I need to make contributions before the year end?

3. This year I paid penalty for excess ROTH contributions. What can I do now to prevent penalties next year? Will I be able to contribute to ROTH IRA again?

18. Real Estate

1. I have no income from an employer and no self-employment income and my sole source of income is from a rental property I own in the US. Do I still have to file a return?

2. "What happens if I take out a 1 mio GBP mortgage and the following year GBP falls by 30% vs the USD"?

3. I have a rental home in state with no income tax. Do i need to declare this somehow?

19. Green Card Holders

1. I have a green card but have not yet moved to the US or applied for a Social Security number. How do I go about filling in my tax return?

2. Are Green Card holders working for supranational organizations outside the US liable to pay US income tax?

3. I was a student or had no income so didn't have to file US taxes. I am applying for a Green Card for my non-resident spouse - what do I do?

4. I have had a green card that has since expired. I have not, however, officially renounced it. Do I have to file US tax return?

5. I moved from abroad to the U.S. mid-year and had the Green Card from the day that I arrived. Do I report full year foreign income, or only for the months when I was in the US / was in possession of the Green Card?

20. US State Filing

1. I would like more information/advice about whether I can or should change the state in which I am filing and if so, how.

21. Investments

1. I sold stock that was in my possession for many years. Unfortunately I have no idea where or when we acquired this stock. How do I provide you with cost basis (original purchase price)?

2. I am not a US citizen or GC holder, but I have had a US brokerage account. I sold my stocks and my US broker withheld capital gains tax. Can I get this back and get a refund?

3. I have filed returns but have not filed form 8621 for my foreign mutual funds (PFIC) - what do I do?

22. Social Security

1. I need to change my information with the U.S. Social Security administration but online applications require U.S. mailing address, which I do not have. How can this be resolved?

2. I am living abroad and receiving Social Security payments. Do I have to file US tax return / will I owe tax due?

23. Non-Residents (Non-US Citizens/Non GC holders)

1. I have an H-1b visa - what is my residency status for tax purposes?

2. I’m a non-US citizen and not a GC holder. I do not live in the US, but I have rental properties in the US. Do I need to file a US tax return? What about State taxes?

3. I would like to start a business in the U.S. and need an EIN and ITIN - what is the process to get started?

24. Department of Defense (DoD) employees

1. I am employed by the US government as a civilian TP employee. Do I need to file state taxes? What address must I put on my return?

2. I work for NATO. Am I liable to pay US taxes?

25. State Issues

1. If I register to vote overseas, how will affect my state tax filing obligations?