Irvine Expat Tax Attorney

U.S. Citizens and Green Card holders living abroad know that when tax season comes around, they need to be prepared. 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 Irvine expat tax attorneys is here to help you through the process.

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 Irvine or across the world, 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 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 Irvine

Our team of expatriate tax attorneys in Irvine can provide services to handle any and all of your international tax needs, including:

• U.S. Federal Tax Returns: Our team will work with you to gather and prepare any necessary financial information in order to file your U.S. federal income tax returns within the deadline.
• U.S. State Tax Returns: Some individuals living and working abroad may have certain financial ties that will require them to pay state income taxes. Our team will evaluate your financial situation to determine whether this will be necessary, and if it is, we will work with you to file the state income tax in the necessary state or states.
• Tax Planning Optimization: An analysis of your tax returns to determine an optimization strategy to save money can be a complicated and a timely process for an individual to do on their own. Working with our team means discovering the best optimization strategies for you: We will analyze your tax situation, determine what type of long-term and short-term savings we can offer you, and help implement this strategy.
• Audit Representation: It is possible that an individual or business may face an audit process, and our team is here to represent you in such cases. We offer representation for both Federal and State audit processes.
• Delinquent Filings: If you are not currently in compliance with IRS tax standards due to failure to file or delinquent filings, our team can work with you to rectify this situation. We will determine the easiest way to get back into tax compliance and help you through the steps of the process, working to avoid any penalties or fines along the way.
• Reviewing Prior Returns: If you’ve been independently filing for years, chances are there may be some mistakes or missed optimization opportunities. Our team will work with you to review previous tax returns to determine if any mistakes need to be rectified and how you can better optimize savings in the future.

How Do Expats File Taxes?

Most countries tax based on residency, meaning only individuals who reside in the country throughout the tax year will be required to pay taxes, regardless of their citizenship status. The United States is one of a few countries worldwide where taxes are based on citizenship, not residency. As such, U.S. citizens and Green Card holders residing anywhere in the world will be required to pay taxes on both earned and passive income accrued throughout the tax year if they meet a certain threshold. This income requirement includes any wages earned, regardless of where they were earned, any income earned through investments, rental properties, and retirement plan payments. U.S. citizens may also be required to report information from foreign accounts and assets if they meet a certain reporting threshold. Individuals who have certain financial ties to U.S. states may also be required to file a state income tax return.

Do Expats Pay Double Taxes?

The United States has put tax treaties into place with 68 countries worldwide in an effort to protect citizens and residents from double taxation. These treaties vary from country to country, but they serve as guidelines and requirements for citizens to reference when determining which country will receive certain tax payments. These tax treaties often contain a wealth of information, but they are not easy to decipher due to the advanced legal and financial jargon they contain. Working with an expat tax attorney to work through the tax treaty for your country of residence will be one of the easiest ways to ensure you are avoiding double taxation and optimizing your tax strategy while ensuring compliance with the IRS and your country of residence.

When To File Taxes as an Expat

The payment deadline for expat tax payments follows the same deadline as U.S. persons living in the United States, and all payments will be due on April 15, commonly known as tax day. Individuals who pay their taxes after this deadline will incur a financial penalty for each day that the taxes are late. For filing purposes, expats receive an automatic two month extension. All tax returns will be due on June 15 for expats.

FBAR Filing

Individuals living abroad will likely, at some point, open up a foreign bank account in their country of residence. The U.S. government requires that this foreign bank account information be shared with the government in order 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, or Foreign Bank Account Report. 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. These forms will be due by April 15, but, similar to the expat tax return extension, they will receive an even longer extension. The final deadline, with an extension, means these tax forms must be returned by October 15. If the deadline is missed due to taxpayer negligence, financial penalties could be incurred.

FATCA Filing

Individuals living abroad may also begin to acquire assets, such as vehicles, homes, or other goods worth a large amount of money. For such individuals, if they meet a certain financial threshold, there is an additional form that must be filed. Anyone who holds more than $50,000 worth of foreign assets or property throughout the tax year must file Form 8938, the Statement of Specified Foreign Financial Assets. This form 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. Failure to file any of these forms can be costly, so it is worth speaking to a tax professional to ensure you are filing all necessary forms and including all required information.

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. These foreign held asset requirements include any financial accounts or assets that are held in any country outside of the U.S., regardless of whether it is your country of residence. 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 or in any combination of foreign bank accounts, you will be required to file the FBAR. If, at any point throughout the year, you held more than $50,000 worth of foreign assets or property, you are required to file Form 8938.

Common U.S. Expat Filing Mistakes in Irvine

Over the years of working with expatriate tax filings, we’ve noticed common mistakes that individuals will make when independently filing their taxes. While these mistakes may seem small, they can cost taxpayers a lot of money over time. Our team works with expats to rectify these mistakes and develop strategies to avoid them in the future, ensuring compliance and tax optimization strategies. Some of the most common 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 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.
• Failure to file an extension past June 15.

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 Irvine Expat Tax Lawyer Today

Handling international taxes can be complicated and intricate, even for the most seasoned taxpayer. Working with an expat tax attorney can be an easy way for you to ensure taxes are filed properly and avoid paying any unnecessary fines or additional payments without an optimized tax strategy. Schedule a free consultation with an Irvine expat tax lawyer today to learn more about how the Evolution team can make your taxes as an expat seamless and easy.