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Taxes – US Citizens Living Abroad, Expats – Minimize your Tax – IRS Tax Experts – File, Settle, Penalties, Problems – Former IRS, Tax Attorneys

by | Jul 19, 2012 | IRS Tax Problem, Tax Help, Tax Lawyer, Tax Returns, Tax Settlements

We are comprised of Board Certified Tax Attorneys, CPA’s and Former IRS Agents, Managers and Instructors.

We have over 60 years of direct work experience at the IRS and over 205 years of professional tax experience.

You can call us anytime for a free tax consult and speak directly to  Tax Attorneys, Lawyers, CPAs or former IRS agents. 1-866-700-1040.

The IRS is seriously cracking down on overseas taxpayers, FBAR and EX-PATS.

The IRS found a whopping $4.4 Billion in the FBAR Program alone. US Citizens who live abroad who file and pay correctly have nothing at all to worry about.

One of the best save to minimize to minimize your tax debt is know and understand the Foreign Tax Credits and the laws that surrounding tax credits.

Because of our extensive background with the IRS we can really help minimize your IRS taxes or tax debt.

Trends and Facts

U.S. taxpayers claimed over $90 billion of foreign tax credits on US individual and corporate tax returns in 2005.

Foreign tax credits allow US taxpayers to avoid or reduce double taxation. You may choose to take a deduction for foreign taxes paid instead of choosing a credit. In most cases, it is to your advantage to take foreign income taxes as a tax credit.

How to Qualify for Foreign Taxes
You can claim a credit only for foreign taxes that are imposed on you by a foreign country or US possession. Generally, only income, war profits and excess profits taxes qualify for the credit.

What  Foreign Taxes Qualify For The Foreign Tax Credit?

Generally, the following four tests must be met for any foreign tax to qualify for the credit:

1. The tax must be imposed on you
2. You must have paid or accrued the tax
3. The tax must be the legal and actual foreign tax liability
4. The tax must be an income tax (or a tax in lieu of an income tax)

How you can claim the Foreign Tax Credit
File Form 1116 Foreign Tax Credit to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession. Corporations file Form 1118 to claim a foreign tax credit.

Tax Compliance Issues with the Internal Revenue Service

The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country.

If you are entitled to a reduced rate of foreign tax based on an income tax treaty between the United States and a foreign country, only that reduced tax qualifies for the credit.
If a foreign tax re-determination occurs, a re-determination of your US tax liability is required in most situations.

You must file a Form 1040X or Form 1120X. Failure to notify the IRS of a foreign tax re-determination can result in a failure to notify penalty.
A foreign tax credit may not be claimed for taxes on excluded income.

Call us today for a no cost professional tax consult. 1-866-700-1040

Taxes,  US Citizens Living Abroad,  Minimize your Tax, IRS Tax Experts,  File, Settle, Penalties, Problems,  Former IRS, Tax Attorneys

 

US Citizens Living Abroad – Tax Help, Filing Back Taxes, Past Due Taxes, Settlements – IRS Tax Experts – Foreign Income Exclusions

by | Jul 17, 2012 | Back Taxes, Tax Help, Tax Returns, Tax Settlements

 

We are a professional tax firm specializing in  tax matters, solutions, tax planning and IRS representation for Expatriates, FBAR and US Citizens  Citizens Living Abroad.

The scope of of practice is worldwide.

We are comprised of Board Certified Tax Attorneys, Tax Lawyers, CPA’s and Former IRS agents and managers.

We have over 206 years of professional tax experience and over 60 years of direct work experience at the IRS.

You can call us for a no cost professional consult and speak directly to a tax professional. 1-866-700-1040.

We can file all tax returns, prepare any past due or unfiled tax returns and if necessary work out a tax settlement if you cannot pay the IRS.

As Former IRS Instructors we taught Tax Law at the IRS.

Tax Tips:

Foreign Earned Income Exclusion

If your Tax Home is in a foreign country and you meet the bona fide residence test or the physical presence test, you can choose to exclude from your income a limited amount of your foreign earned income.

Should you choose to exclude from your income a foreign housing amount.  If you choose to exclude a foreign housing amount, you must figure the foreign housing exclusion before you figure the foreign earned income exclusion.

Your foreign earned income exclusion is limited to your foreign earned income minus your foreign housing exclusion.

If you choose to exclude foreign earned income, you cannot deduct, exclude, or claim a credit for any item that can be allocated to or charged against the excluded amounts.

This includes any expenses, losses, and other normally deductible items allocable to the excluded income.
Limits on Excludable Amount per IRS Code.

You may be able to exclude up to $92,900 of your foreign earned income in 2011.

You cannot exclude more than the smaller of:

$92,900, or

Your foreign earned income (discussed earlier) for the tax year minus your foreign housing exclusion (discussed later).

If both you and your spouse work abroad and each of you meets either the bona fide residence test or the physical presence test, you can each choose the foreign earned income exclusion.

You do not both need to meet the same test. Together, you and your spouse can exclude as much as $185,800.
Paid in year following work. 

You are considered to have earned income in the year in which you do the work for which you receive the income, even if you work in one year but are not paid until the following year.

If you report your income on a cash basis, you report the income on your return for the year you receive it. If you work one year, but are not paid for that work until the next year, the amount you can exclude in the year you are paid is the amount you could have excluded in the year you did the work if you had been paid in that year.

There are exceptions to some of these rules and for further details as to how they apply, call us for a no cost tax consult. 1-866-700-1040.

US Citizens Living Abroad,   Tax Help, Filing Back Taxes, Past Due Taxes, Settlements,  IRS Tax Experts