Huntington Beach Expat Tax Attorney

U.S. citizens and Green Card holders residing abroad often face the daunting task of dealing with tax obligations during tax season. Filing taxes while living abroad can be a complex process, and it becomes even more intricate when individuals realize they must not only comply with U.S. tax regulations but also understand their responsibilities regarding local taxes in their country of residence. Gathering the necessary information and preparing tax returns can be a time-consuming and challenging endeavor. However, our team of expat tax attorneys in Huntington Beach is here to simplify the process, making this tax season your smoothest one yet.

Why Hire Evolution Tax and Legal for Your Expat Taxes?

When you work with our expatriate tax attorneys, you benefit from a unique combination of skills that combines the knowledge of a tax attorney with the expertise of a Certified Public Accountant (CPA). By choosing an expat tax attorney from our firm, you can expect:

• The fusion of a CPA’s expertise with an attorney’s knowledge to provide top-notch international tax accounting, advisory, and legal services.
• Streamlined online process that ensures easy access to our team of experts, whether you’re filing taxes in Huntington Beach or thousands of miles away from the U.S.
• A team with a track record of serving clients worldwide, including individuals, small businesses, and large corporations. Regardless of the intricacies of your situation, our team has the experience and know-how to handle your tax matters effectively.

Our team brings CPAs and tax attorneys under one roof, allowing us to offer expertise and savings that other firms cannot match. We aim to provide the expertise of a Big 4 accounting firm while delivering personalized care and attention to detail, along with a commitment to transparency and responsiveness. We look forward to welcoming new clients and demonstrating the value that Evolution Tax and Legal can provide.

Expat Tax Services We Offer in Huntington Beach

Our team of expatriate tax attorneys offers a comprehensive range of expat tax services, including:

• State Tax Returns: In specific situations, individuals living abroad may be obligated to file state tax returns. We can help you determine if this applies to your situation and assist in preparing the required information for your state tax return.
• Tax Planning Analysis: Our team conducts a thorough analysis of your financial data for the tax year to devise a tax-efficient strategy, saving you money in both the short and long term. We provide guidance for implementing the strategy effectively.
• Federal and State Audit Representation: In addition to tax planning and return filing, we represent individuals and businesses in both federal and state tax audits, ensuring your interests are protected.
• Non-Filers and Delinquent Filings: If you have failed to file your taxes in the past or made incorrect filings, our team can streamline the rectification process, ensuring you achieve compliance with IRS tax standards. We assess your situation and determine the best course of action to get you back on track.
• Reviewing Prior Returns: Self-filing tax returns can lead to mistakes, potentially affecting your tax situation negatively. Our team can review your previous tax filings to identify errors and help you rectify or avoid them in the future.

How Do Expats File Taxes?

The United States is one of the few countries worldwide that taxes its citizens based on citizenship rather than residence. This means that all U.S. citizens and Green Card holders must file a federal income tax return, even if they live and work abroad. In some cases, individuals with certain financial ties to a U.S. state may also need to file a state income tax return. U.S. citizens are required to pay income taxes on both earned and passive income they accumulate throughout the tax year, as long as they meet specific income thresholds. This includes wages, income from investments, rental properties, retirement plan payments, and reporting foreign account and asset information.

Do Expats Pay Double Taxes?

The U.S. has established treaties with 68 countries worldwide to prevent double taxation for residents and citizens. These treaties offer guidelines to determine which country should receive specific taxes. Reviewing the tax treaty for your country of residence with a tax professional helps ensure you understand your tax obligations to both your country of residence and the IRS. Tax treaties can be complex, making our team’s guidance invaluable for simplifying the process and ensuring compliance. 

When To File Taxes as an Expat

Expatriate taxes follow a timeline similar to tax filings in the United States. The tax year aligns with the calendar year, starting on January 1 and ending on December 31, with tax returns due the following year. While taxpayers must pay their taxes by April 15, expatriates receive an extension for filing their tax returns. Expats must file their tax returns and any additional forms by June 15 to meet IRS guidelines. 

FBAR Filing

As an expatriate living and working abroad, it’s likely you’ll maintain funds in a foreign bank account, either in your country of residence or an offshore account. To report this information to the IRS, individuals holding more than $10,000 in a foreign or offshore account must file an FBAR (Foreign Bank Account Report) alongside their federal income tax return. The FBAR, along with FinCEN Form 114, must be filed by April 15, with an automatic extension available until October 15. Failure to meet the deadline due to negligence may result in financial penalties.

FATCA Filing

Individuals with more than $50,000 in foreign assets or property during the tax year must file Form 8938, the Statement of Specified Foreign Financial Assets. This form, filed with the federal income tax return, helps the IRS monitor foreign assets held by U.S. citizens and Green Card holders. If you don’t meet the income tax filing requirement but still possess more than $50,000 in foreign assets, it’s essential to consult with a tax attorney, as penalties for non-filing can be costly.

FBAR, FATCA & Offshore Disclosure Obligations for Expats

U.S. citizens and Green Card holders with offshore or foreign bank accounts and foreign assets have specific obligations to disclose information to the IRS. While filing requirements vary depending on individual situations, the general rule is that if you have over $10,000 at any point during the tax year in an offshore or foreign bank account, you must file an FBAR. If you have more than $50,000 worth of foreign assets during the year, you must file FATCA. Ensuring compliance with these forms helps avoid the costly penalties associated with non-filing or delinquent filing.

Common U.S. Expat Filing Mistakes in Huntington Beach

Our team has noticed several common errors when reviewing expatriate taxes. These mistakes include:

• Failing to file an extension beyond June 15.
• Neglecting to include the FBAR with your tax return. Not including the FBAR when holding more than $10,000 in foreign bank accounts throughout the tax year can result in substantial penalties.
• Failing to take advantage of the child tax credit. Claiming dependents on your tax filings can lead to substantial savings, and overlooking this can result in unnecessary additional taxes.
• Omitting Form 2555 or Form 1116 in your filing. Form 2555 determines how much of your foreign income should be excluded and your residency status, while Form 1116 allows you to claim a foreign tax credit. Failing to file these forms may lead to higher taxes during tax season.

These mistakes, although seemingly minor, can have significant financial consequences. To optimize your tax payments and prevent common errors, collaborating with a tax professional for tax planning and seamless tax return filing is recommended.

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

The most significant tax mistake for U.S. citizens living and working abroad is failing to file taxes. Delinquent or non-filing of taxes while abroad can lead to substantial penalties and potential legal repercussions. Neglecting to file your income tax return on time can result in three types of penalties, depending on your circumstances:

• Failure to File Penalty: This penalty is the most severe and amounts to 5% of the unpaid taxes, with an additional 5% for each month you delay filing. The maximum penalty is 25% of the owed taxes, plus the full amount of the taxes.
• Failure to Pay Penalty: While less severe, this penalty still results in a 0.5% fee, increasing by 0.5% each month if you don’t take steps to become tax-compliant over time.
• Interest on Missed Payments: If you fail to pay your taxes on time, you will accumulate interest on the amount owed.
• Failing to file the FBAR or FATCA can lead to even more substantial penalties. Neglecting the FBAR can result in a $10,000 fine, while missing the FATCA filing can incur a maximum fine of $87,000.

Ensuring compliance with expat taxes is crucial to avoiding these costly penalties. Working with an expat tax attorney provides a seamless and easy way to ensure timely and accurate filing of all necessary forms.

Schedule a Free Consultation With a Huntington Beach Expat Tax Lawyer Today

Our team of Huntington Beach expat tax lawyers at Evolution Tax and Legal boasts the experience and knowledge to address your international tax needs comprehensively. Contact us today to initiate the process and turn your tax season into a hassle-free experience.