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The Tax Cuts and Jobs Act (TCJA) was signed into law by President Trump in December 2017. The TCJA ushers in a slew of dramatic changes to the U.S. Tax Code, including some important revisions to the tax requirements for U.S. expats. If you are a U.S. citizen living or working abroad, pay careful attention, because this information could directly impact your taxes this year. For up-to-date legal and financial guidance on all aspects of the reformed tax laws for expats, contact the Tax Law Office of David W. Klasing to discuss your matter confidentially in a reduced-rate consultation.
Most U.S. taxpayers were required to file a federal personal income tax return by April 17, 2018, unless they obtained the six-month extension available through Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return). However, to help accommodate the shipping and processing delays for international tax documents, the Internal Revenue Service (IRS) grants automatic 60-day extensions to U.S. citizens who live overseas. This generally includes any U.S. citizens who were on military duty overseas when their tax returns were originally due.
You do not need to file any IRS forms to obtain this extension, which occurs automatically, pushing the deadline from April 17 to June 17. However, there are two important points to take note of:
Remember: even if your circumstances have not changed significantly since last year, your responsibilities may have changed due to the recent tax reforms. Toward that end, our experienced tax preparers have prepared a brief overview of what has changed for expats – and what hasn’t – under the TCJA.
It’s unsurprising that a law President Trump once called “the biggest tax cuts and reform in American history” would usher in a few changes for taxpayers overseas. But how, exactly, have the regulations shifted? Below are four examples.
Despite making some radical alterations, the TCJA also leaves several provisions of the Tax Code intact. Unfortunately for U.S. expats, these provisions can be dangerous if not scrupulously complied with. For instance, one fact which hasn’t changed is the requirement for citizens abroad to report foreign income by, where applicable, taking the following measures:
On the other hand, the TCJA also preserves some beneficial elements of the Tax Code for expats, notably the Foreign Tax Credit (FTC) and FEIE, both of which can reduce your tax liabilities. For detailed information about these IRS tax breaks for citizens abroad, you may be interested in the following articles:
If you are a U.S. expat and have not filed your 2017 income tax return yet, don’t panic: you still have two months in which to do so. However, before submitting any materials to the IRS, you should review your rights, responsibilities, and records with an experienced international tax attorney, who can work to ensure that you are taking appropriate steps to comply with the law while restraining your tax liabilities to the absolute minimum. It is also essential to engage in careful tax planning for 2019, when the provisions of the TCJA will have a greater impact.
At the Tax Law Office of David W. Klasing, our versatile team of Tax Lawyers, EAs, and CPAs combines decades of experience aiding individuals and business entities with all aspects of foreign tax planning, tax preparation, and tax controversy resolution. If you need assistance preparing a tax return, reporting foreign income, navigating a tax audit, or evaluating the tax repercussions of a potential move overseas, contact us online, or call the Tax Law Office of David W. Klasing at (800) 681-1295 for a reduced-rate consultation.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices in San Bernardino, Santa Barbara, Panorama City, and Oxnard! You can find information on all our offices here.
Helpful Q and A library on international taxation:
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Basics of U.S. International Taxation
Branch Profits Tax
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