Chula Vista Expat Tax Attorney

Tax returns are a complicated process for individuals living within the United States border, and they only become more complicated for those of us who have taken the leap to living and working abroad. Collecting all the necessary financial information and preparing your tax return in time to meet the deadline while also ensuring compliance with IRS standards as well as the standards of your country of residence is difficult for even the most experienced individual. Filing from abroad is riddled with legal and financial intricacies, all of which can be made easier for expats by working with an experienced professional. The Evolution Tax and Legal team of Chula Vista expat lawyers is here to provide you with the guidance and experience to make this tax season as seamless as possible.

Why Hire Evolution Tax and Legal for Your Expat Taxes?

Our team of dual licensed Attorney-CPAs can work with you to file your expat taxes, offering a unique skill set that combines the knowledge of a tax attorney with the expertise of a CPA. When working with an expatriate tax attorney at our firm, you can expect:

• The expertise of a CPA comes together with the knowledge of an attorney to provide the best international tax accounting, advisory, and legal services.
• A streamlined online process that will help you ensure that whether you are filing taxes in the Chula Vista area or thousands of miles from the U.S., you will have easy access to our team of experts.
• Our team has served clients all over the world: individuals, small businesses, and large businesses. Whatever the intricacies of your unique situation, our team has worked with them before, and we understand the best way to handle them.

Our team brings together CPAs and tax attorneys under one roof, allowing us to provide you with expertise and savings that other firms cannot offer. Our value proposition is to bring the expertise of a Big 4 accounting firm together with the personal care and attention to detail of a small accounting 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 Chula Vista

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

• U.S. Federal Tax Return Preparation: Our team will work with you to prepare the necessary financial and personal information required to file your U.S. federal tax return and ensure compliance with the IRS.
• State Tax Returns: Some individuals in certain situations will be required to file a state tax return while living abroad. Our team will work with you to determine if this will be a necessary part of your filing requirements and, if so, will help you prepare the necessary information to file your state tax return.
• Tax Planning Analysis: Our team will conduct a thorough analysis of your financial information for the tax year and determine if and how we can implement a tax-efficiency plan to save you money on your tax return. We will provide the necessary guidance for implementing the strategy and help determine how you can save money in both the short and long term.
• Federal and State Audit Representation: In addition to tax planning and tax return filing, we represent many individuals and businesses in both federal and state tax audits.
• Non-Filers and Delinquent Filings: If you have failed to file your taxes previously or have filed incorrectly, our team can work with you to streamline the rectifying process and ensure you get back in compliance with IRS tax standards. We will work with you to assess your situation and determine the best course of action to get back into compliance.
• Reviewing Prior Returns: It may occur when self-filing your tax returns that mistakes are made, and these errors may work against the filer when submitting your return. Our team can work with you to conduct a review of your previous tax filings and determine if any errors have been made and how we can help you rectify or avoid them 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, any U.S. citizen or Green Card holder is required to file a federal income tax return, even if they live and work abroad. In some situations, where an individual has certain financial ties to a U.S. state, they will be required to file a state income tax return as well.

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 U.S. has worked with 68 countries worldwide to put treaties in place to help residents and citizens avoid double taxation. The purpose of these treaties is to provide guidelines to citizens and residents of both countries as to which country certain taxes should be paid to. Reviewing the tax treaty for your country of residence with a tax professional will help ensure you understand which taxes are required to be paid to your country of residence and which taxes will be paid to the IRS. These treaties can be riddled with intricacies, which is why working with our team can help make the process less complicated for you and ensure compliance. 

When To File Taxes as an Expat

Expatriate taxes follow a similar timeline to tax filings completed in the United States. The tax year follows the calendar year, starting on January 1 and ending on December 31. Taxes will be filed in the following year. Taxpayers must pay all taxes by April 15, but expatriates get an extension on filing their tax return. Expats must file their tax returns and any additional forms by June 15 in order to comply with the IRS guidelines. 

FBAR Filing

It is highly likely that, as an expatriate living and working abroad, you will hold some amount of money in a foreign bank account. Whether this is an account in your country of residence or an offshore account, you may need to file a form to share this information with the IRS. Any individual who holds more than $10,000 at any point throughout the year in a foreign or offshore account is required to file an FBAR, which is a form that helps the IRS ensure tax compliance with individuals who hold money outside the United States.

The FBAR, or Foreign Bank Account Report, is to be filed alongside the 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 hold more than $50,000 in foreign assets or property at any point throughout the tax year will be required to file Form 8938, the Statement of Specified Foreign Financial Assets. This form is to be filed with the federal income tax return and is required by the IRS to help the government keep track of foreign assets held by U.S. citizens and Green Card holders.

If you do not meet the income tax filing requirement but still hold more than $50,000 in foreign assets, 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 Chula Vista

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 file an extension past June 15.
• Failure to file an FBAR with your tax return: Failure to include the FBAR if you hold more than $10,000 in foreign bank accounts throughout the tax year can result in large penalties or fees, costing you a large sum of money in the long run.
• 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.
• 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.

These mistakes, while they may seem small, can be extremely costly. To optimize your tax payments and avoid making simple mistakes, work 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?

The biggest tax mistake you can make as a U.S. citizen living and working abroad is failing to file taxes at all. 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.

Ensuring compliance with expat taxes is important to avoid these unnecessary penalties. Working with an expat tax attorney can be a seamless and easy way to make sure all necessary filings are done on time and properly.

Schedule a Free Consultation With a Chula Vista Expat Tax Lawyer Today

The Chula Vista expat tax lawyers at Evolution Tax and Legal have the experience and knowledge to ensure total compliance with IRS tax regulations for expats, regardless of their country of residence or unique situation. Contact our team today to begin the process.