San Francisco Expat Tax Attorney

Tax season can be a stressful time of the year for many of us, and it is only made more complicated for U.S. citizens and Green Card holders living and working abroad. Filing abroad is known to be complicated and riddled with intricacies. Many individuals will spend weeks working on gathering the necessary information and preparing their tax return to ensure compliance with IRS requirements. This process can be difficult for individuals, whether they are experienced with filing expat taxes or they are completing the process for the first time, which is why the Evolution Tax and Legal team of San Francisco expat tax attorneys is here to help you through the process.

Why Hire Evolution Tax and Legal for Your Expat Taxes?

The team at Evolution Tax and Legal offers a unique skill set: our team consists of dually-license attorney-CPAs. As such, we can provide you with the expertise of an accountant while having the background knowledge of an attorney. This is especially important when working with the intricacies of international taxes. When working with the team at Evolution Tax and Legal, you can expect:

• The knowledge and experience of an attorney to come together with the expertise of a CPA, providing the best international tax accounting, legal and advisory services.
• An online process that has been specially designed to serve individuals living and working abroad: our streamlined process allows you to easily work with our team of experts in San Francisco, no matter the time zone you are located in.
• A team of experts who have experience in the intricacies of international tax. Our team has served clients worldwide, both individuals and businesses, and we have experience working with a variety of situations. Whatever your tax situation is, we have the background and expertise to work with you.

Our team’s ability to bring you the services of tax attorneys and CPAs under one roof allows us to offer savings and expertise that other firms cannot. We bring together a team that has the background and experience of a Big 4 accounting firm with the attitude and customer service of a small business. We are excited to welcome new clients and show them the transparency, openness, and responsiveness that our company is built on.
 

Expat Tax Services We Offer in San Francisco

Our team of expatriate tax attorneys in San Francisco offers a wide variety of expat tax services, including:

• U.S. Federal Tax Return Preparation: The San Francisco expat tax attorneys at Evolution Tax and Legal will work with you to prepare the necessary financial information to file your U.S. federal income tax returns and ensure compliance with IRS tax standards.
• State Tax Returns: In certain cases, individuals living and working abroad may have financial or residential ties in certain states that will require them to file a state tax return. Our team will work with you to determine if this will be necessary and, if so, to file this state tax return to ensure state tax compliance.
• Tax Planning Analysis: Optimizing your tax returns to achieve savings can be complicated. Our team of tax experts will conduct a tax planning analysis to ensure you are saving the maximum amount on your income tax return. We will work with you to implement a saving strategy and ensure short-term and long-term savings.
• Federal and State Audit Representation: Our team offers federal and state audit representation for both individuals and businesses facing an audit process.
• Non-Filers or Delinquent Filers: Failing to file taxes or filing incorrectly can seem daunting, and many individuals will try to avoid rectifying the situation. Our team can offer services to seamlessly rectify any non-filing or delinquent filings and ensure you are once again in compliance with IRS tax standards.
• Reviewing Prior Returns: Mistakes are common when individuals file their own taxes. Our team will review your prior tax returns to determine if mistakes have been made and how they may be rectified and avoided in the future.

How Do Expats File Taxes?

The U.S. is one of a few countries worldwide that taxes based on citizenship, regardless of residency. As such, American citizens and Green Card holders who live and work abroad are required to pay taxes on their income if they meet a certain threshold. Taxable foreign income includes earned income, such as wages, and passive income, such as any income earned from investments, interest, and retirement plan payments. Individuals are also required to file information on any foreign accounts and foreign assets. Some individuals who have certain financial ties to a U.S. state may be required to file a state income tax return. 

Do Expats Pay Double Taxes?

Tax treaties have been put in place between the United States and 68 countries worldwide, serving as requirements and guidelines for individuals living and working abroad on which country they are required to pay certain taxes to. These treaties help U.S. citizens and Green Card holders living and working abroad avoid double taxation. Tax treaties vary from country to country, and it is important to review the tax treaty for your country of residence to ensure compliance with U.S. tax standards as well as tax requirements for the country of residence. Working with an experienced San Francisco expat tax lawyer to understand the treaties and intricacies of tax compliance will help ensure you are avoiding double taxation. 

When To File Taxes as an Expat

Filing expat taxes follows a similar timeline as if you were filing taxes within the United States. The tax year will be from January 1 to December 31, and you will pay taxes in the months following the end of the tax year. You must file your federal income tax returns along with any additional forms that may be required by April 15, with an automatic extension for individuals living abroad to June 15. While tax returns are due by June 15, any taxes must be paid by the original deadline of April 15. Any taxes that are paid past the deadline will incur a financial penalty. 

FBAR Filing

Individuals may hold money in foreign bank accounts, especially those living and working abroad. Any U.S. citizen or Green Card holder who holds more than $10,000 in a foreign or offshore account at any point throughout the tax year will be required to report these funds to the government through the Foreign Bank Account Report, or FBAR. This form is required by the IRS in an effort to ensure tax compliance by individuals living and working abroad.

The FBAR must be filed along with your U.S. federal income tax return each year. Along with the FBAR, you will be required to file FinCEN Form 114. Both of these forms are due by April 15, along with your income tax return, but similar to the income tax return, individuals are given an automatic extension to October 15 to file these forms. If the deadline is missed due to taxpayer negligence, financial penalties could be incurred.

FATCA Filing

Individuals who have held more than $50,000 worth of foreign assets at any point throughout the tax year will have an additional tax form to file along with their FBAR and federal income tax return. The Statement of Specified Foreign Financial Assets, Form 8938, is required to be filed in order to help the government keep track of all foreign assets held by U.S. citizens or Green Card holders. If you hold more than $50,000 in foreign assets but do not meet the foreign income filing requirement, it is not required for you to file Form 8938. It is important to consult with a tax attorney prior to deciding not to file any foreign tax forms, as penalties for failure can be steep.

FBAR, FATCA & Offshore Disclosure Obligations for Expats

U.S. individuals who are required to file an income tax return each year will also have certain obligations when it comes to disclosing certain offshore accounts, foreign bank accounts, and foreign held assets to the IRS. The requirements for filing an FBAR and filing FATCA vary depending on the individual, but in general, you can assume that if at any point throughout the year you held more than $10,000 in a foreign bank account, you are required to file an FBAR, and if at any point throughout the year you held more than $50,000 worth of foreign assets, you are required to file Form 8938. Complying with the filing requirements for FBAR and FATCA is important, as failure to file or delinquent filings can come with hefty financial penalties.

Common U.S. Expat Filing Mistakes in San Francisco

Some common mistakes we often see on expat tax filings that are worth noting are:

• Failure to file an FBAR with your tax return: Failure to include the Foreign Bank Account Report, FBAR, if it is required can result in large penalties or fees, losing you a large sum of money in the long run.
• Failure to file an extension past June 15.
• Failure to include Forms 2555 and 1116: You can use the Foreign Earned Income Tax Exclusion form to determine how much of your foreign income will be tax exempt, as well as determine your residency and earn tax benefits. Form 1116 is required to claim any foreign tax credit. Filing both of these forms will help save you money in the long run, and failure to include them is a mistake we too often see.
• Failure to take advantage of the child tax credit: Claiming your dependents on your tax filings is a great way to save money, and failure to do so will result in you paying additional taxes where you could be saving.

A missed form here and an unclaimed tax credit there may seem small, but these mistakes could cost you in the long run. To optimize your tax payments and avoid making simple mistakes, work with an expat tax attorney in San Francisco to create a tax plan and seamlessly file your tax return.

What Happens if You Don’t File Taxes While Living Abroad?

There are significant penalties for individuals living and working abroad who fail to file or have delinquent filings. These include hefty penalties and potential prosecution.

Neglecting to file your income tax return on time can result in three different types of penalties, depending on your situation. Failure to file is the most costly penalty and will result in a fine of 5% of the amount of money you failed to file taxes on, with an additional 5% penalty added for each month that you failed to file. The maximum penalty is 25% of the taxes you owe, as well as paying the full amount of taxes. Failure to pay is lower in comparison, but still costly. This results in 0.5% being owed, and this also increases by 0.5% monthly, but this penalty can also add up over time if a taxpayer does not take steps to get back into compliance with taxes. The third type of penalty will be missed payments, which will accrue interest over time. Failure to file FATCA or FBAR results in even more costly penalties. Failure to file FATCA can result in a $10,000 fine, and failure to file FBAR can result in a maximum of an $87,000 fine.

Working with an expat tax attorney in San Francisco can be an easy way for you to ensure taxes are filed properly and avoid paying any unnecessary fines for delinquent filings or failure to file.

Schedule a Free Consultation With a San Francisco Expat Tax Lawyer Today

The team at Evolution Tax and Legal is here to help you navigate the complicated process of expat taxes. Our San Francisco expat tax attorneys have the expertise and knowledge needed to tackle your tax situation and guarantee tax compliance. Contact the team today to learn more.