Anaheim Expat Tax Attorney

As a U.S. citizen or Green Card holder living and working abroad, collecting and preparing the necessary financial information for your taxes every year can be more complicated than it needs to be. Many individuals will spend a large chunk of their time determining when and how to file, collecting all the necessary information, and preparing large amounts of paperwork to ensure they are in compliance with U.S. tax standards. The process can be confusing and riddled with intricacies, especially when you begin to involve tax optimization strategies and the deciphering of international tax treaties. The Anaheim expat tax attorneys at Evolution Tax and Legal are here to help: Our team can work with you to make tax season a breeze, whether you are filing taxes in the Anaheim area or from a country across the world.

Why Hire Evolution Tax and Legal for Your Expat Taxes?

When working with the team at Evolution Tax and Legal, there is a level of expertise and care that other firms may not be able to offer. Our team consists of dual-licensed CPAs and attorneys, providing experience and knowledge that an attorney or CPA may not have on their own. We will be able to provide you with:

• The knowledge of an attorney and the expertise of a CPA to provide the best international tax accounting, advisory, and legal services available.
• A streamlined online process that will help you ensure that whether you are filing taxes right here in California or thousands of miles away, you will have easy access to our team of experts when you need us.
• A team of experts who have experience working with individuals from every nation and a variety of businesses, both large and small.

Our team understands the intricacies that come with living and working abroad as a U.S. citizen. We have worked hard to be able to bring you the services of tax attorneys and CPAs under one roof, allowing us to offer savings and experience that other firms cannot. We bring the attention to detail and personal care of a small accounting firm together with the experience of a Big 4 firm. We value transparency and responsiveness, and we are excited to welcome new clients and show them the value that Evolution Tax and Legal can offer. 

Expat Tax Services We Offer in Anaheim

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

• U.S. Federal Tax Return Preparation: The Anaheim 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 savings strategy and ensure short-term and long-term savings.
• Non-Filers and Delinquent Filings: 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.
• Federal and State Audit Representation: Our team offers federal and state audit representation for both individuals and businesses facing an audit process.
  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 United States is one of only a few countries worldwide that taxes based on citizenship, regardless of an individual’s country of residence. As such, all U.S. citizens or Green Card holders are required to file a federal income tax return, even if they live and work abroad. U.S. citizens will be required to pay income taxes on both earned and passive income they have accrued throughout the tax year if they meet a certain threshold. This includes any wages earned, any income earned from investments, rental properties, and retirement plan payments, as well as reporting information from foreign accounts and foreign assets.

Do Expats Pay Double Taxes?

The United States has worked with 68 countries worldwide to put tax treaties in place, 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 a tax professional to understand the treaties and intricacies of tax compliance will help ensure you are avoiding double taxation. 

When To File Taxes as an Expat

Expatriates are given an automatic two-month extension for filing their U.S. income tax return. The deadline for individuals living in the United States is April 15, and for expats, the extension will make the filing date June 15. Even though the filing deadline is June 15, the filer must pay any taxes they owe by the regular deadline, which is April 15. Individuals who pay their taxes after the April 15 deadline will incur a financial penalty for each day the taxes are late. 

FBAR Filing

U.S. citizens who live and work abroad are likely to hold some assets in a foreign bank account throughout their time living and working in another country. The U.S. government requires that foreign bank account information be shared with the government in an effort to ensure tax compliance for individuals living abroad. If you hold more than $10,000 in a foreign bank account at any point throughout the year, you must file an FBAR, the Foreign Bank Account Report, regardless of whether you live in the same country where your money is being held.

The FBAR must be filed with your U.S. federal income tax return each year. Along with 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 and it is determined that it was missed due to taxpayer negligence, financial penalties could be incurred.

FATCA Filing

For individuals who hold more than $50,000 worth of foreign assets or property at any point throughout the tax year, there is an additional form that must be filed. Form 8938, the Statement of Specified Foreign Financial Assets, 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. This form, like the FBAR, will be included with the federal income tax return.

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 to file can be costly.

FBAR, FATCA & Offshore Disclosure Obligations for Expats

U.S. citizens and Green Card holders who hold money in offshore accounts or foreign bank accounts and own foreign assets have certain obligations to disclose information to the IRS. Though filing requirements may vary depending on the individual situation, the general rule of thumb to follow is: If you hold more than $10,000 at any point throughout the tax year in an offshore or foreign bank account, you are required to file an FBAR. If you hold more than $50,000 worth of foreign assets at any point throughout the year, you are required to file FATCA. Ensuring compliance with these forms will help you avoid any of the costly penalties that can come with failure to file or delinquent filing.

Common U.S. Expat Filing Mistakes in Anaheim

There are a few common mistakes that our team notices when reviewing expatriate taxes that are worth taking note of. These mistakes include:

• Failure to include Form 2555 or Form 1116 in your filing: The Foreign Earned Income Tax Exclusion Form, Form 2555, helps determine how much of your foreign income is to be excluded and determines your residency through the bona fide residence or physical presence test. Form 1116 is the form required to claim a foreign tax credit. Failure to file these forms can work against you and have you paying higher taxes than necessary during tax season.
• Failure to claim 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.
• Failure to file an extension past June 15
• Failure to file an FBAR with your tax return: The FBAR is a required form for individuals holding more than $10,000 in foreign bank accounts throughout the tax year. Failure to include the FBAR if it is required can result in large penalties or fees, costing you a large sum of money in the long run.

These mistakes, while they may seem small, can be extremely costly. A sure-fire way to optimize your tax payments and avoid making simple mistakes is by working with a tax professional to create a tax plan and seamlessly file your tax return.

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

Individuals living abroad who fail to file taxes or have delinquent filings can face significant financial and legal penalties. Failing to file your income tax return on time can result in different types of penalties, depending on your situation:

• Failure to file: This 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: This is lower in cost when compared to failure to file, but this is still a costly mistake. 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.
• Missed payments: These missed payments will accrue interest over time.
• Failure to file FATCA or FBAR: While FATCA and FBAR are just information filings that don’t require any form of payment, failure to file 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.

Schedule a Free Consultation With an Anaheim Expat Tax Lawyer Today

Our expat tax team in Anaheim is here to provide you with guidance that is personalized to your tax situation. No matter your country of residence or your unique financial ties, our team will work with you to make filing your taxes as simple as possible. Schedule a free consultation with our expat tax lawyers today to gain insight into your tax situation and learn how our tax optimization strategies can help save you money in the long run.