Laguna Beach Expat Tax Attorney

Gathering all the necessary financial information to prepare for your yearly tax return is a complicated process, and it is only made more complex for U.S. citizens and Green Card holders who live and work abroad. Filing abroad is known to be complicated and riddled with legal and financial intricacies, and many individuals will spend weeks working on gathering all the necessary financial information and personal documents so they can file their tax return and ensure compliance with IRS requirements. This process is difficult for even experienced individuals to complete on their own, which is why our team of expat tax attorneys is here to provide background on the process and assist you when the time comes to complete your yearly tax return.

Why Hire Evolution Tax and Legal for Your Expat Taxes?

Our team of duly-licensed attorney-CPAs has a unique skill set that combines the knowledge of a tax attorney with the expertise of a CPA, and we can utilize this knowledge and experience to make your tax filing process a breeze. When working with an expatriate tax attorney at our firm, you can expect:

• The expertise of a CPA is combined 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 Laguna Beach 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 Laguna Beach

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

• U.S. Federal Tax Return Preparation: The Laguna Beach 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.
• 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.
• Tax Planning Analysis: Optimizing your tax returns to achieve savings can be complicated. Along with reviewing your prior returns, 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.
• Federal and State Audit Representation: Our team offers federal and state audit representation for both individuals and businesses facing an audit process.
• 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.

How Do Expats File Taxes?

Most countries around the world tax based on residency, which means only individuals who live within the country’s borders throughout the tax year will be required to pay taxes regardless of their citizenship. The United States taxes differently: if you are a U.S. citizen, you will be required to pay taxes each year, regardless of your residency status in another country. 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. Expats who have certain financial or personal ties to specific states within the U.S. may also have to file a state tax return.

Do Expats Pay Double Taxes?

The United States has worked to put tax treaties in place with dozens of 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. These treaties are riddled with legal and financial jargon, and without a background in either, they can be difficult to decipher and confusing to understand. Our team of dual-certified attorney-CPAs has the background to understand these treaties and provide you with the information that is relevant to your tax situation.

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

It is to be expected that U.S. citizens who live and work in another country will eventually open up a bank account within their country of residence. The U.S. government requires that this 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. 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. This $10,000 will be the sum of any and all foreign bank accounts you may hold. 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 Laguna Beach

There are a few common mistakes that our team notices when reviewing expatriate taxes that are worth taking note of. These mistakes may seem small, but they are often costly. The most common of which 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 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 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

To ensure you are optimizing your tax payments and avoiding these simple mistakes, you can 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?

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 a Laguna Beach Expat Tax Lawyer Today

Regardless of your country of residence or location around the world, our team of expat tax lawyers in Laguna Beach is prepared to make your tax season as seamless as possible. Schedule a free consultation with our team today to gain insight on your tax situation and learn more about the Evolution Tax and Legal process.