Ontario Expat Tax Attorney

Tax season can be a source of considerable stress for many, and this stress can be amplified for U.S. citizens and Green Card holders living outside the United States. Navigating the complexities of filing taxes from abroad is known to be challenging, often requiring weeks of meticulous preparation to meet IRS and foreign country tax requirements. Handling this process independently can be daunting, which is where our team of expat tax attorneys at Evolution Tax and Legal steps in to provide assistance.

Why Hire Evolution Tax and Legal for Your Expat Taxes?

Our unique team of attorney-CPAs at Evolution possesses a dual-licensed skill set, enabling them to address tax intricacies with both the precision of accountants and the legal acumen of lawyers. When collaborating with one of our expatriate tax attorneys, you can anticipate:

• The fusion of CPA expertise with legal knowledge to offer top-notch international tax accounting, advisory, and legal services.
• Streamlined online system that ensures easy access to our expert team, regardless of your location for tax filing.
• A group of experts well-versed in various tax scenarios, serving individuals and businesses worldwide, regardless of size, comprehends the complexities involved.

By bringing together the expertise of a Big 4 accounting firm and the personalized attention of a smaller firm, we offer unmatched value, transparency, and responsiveness. We are eager to welcome new clients and illustrate the benefits of choosing Evolution Tax and Legal.

Expat Tax Services We Offer in Ontario, CA

Our team of expatriate tax attorneys in Ontario is well-equipped to cater to all your international tax requirements, including:

• U.S. Federal Tax Returns: Collaborating with you to gather and prepare the necessary financial data for the filing of your U.S. federal income tax returns.
• U.S. State Tax Returns: Evaluating your financial situation to determine if state income tax filing is necessary for individuals with specific financial ties to a U.S. state.
• Tax Planning Optimization: Identifying the best tax optimization strategies, both short-term and long-term, by analyzing your tax situation and implementing a tailored strategy.
• Audit Representation: Providing representation for federal and state audit processes in the event of an audit.
• Delinquent Filings: Assisting those not in compliance with IRS tax standards due to missed filings in rectifying the situation and guiding them back to tax compliance.
• Reviewing Prior Returns: Collaborating to review past tax returns for errors or missed savings opportunities and suggesting improvements for future optimization.

How Do Expats File Taxes?

The United States is one of the few countries worldwide that taxes based on citizenship rather than residency. Consequently, American citizens and Green Card holders living and working abroad must pay taxes on their income if they meet certain income thresholds. This taxable foreign income includes earned income like wages and passive income derived from investments, interest, and retirement plan payments. Reporting foreign accounts and assets is also mandatory, while specific financial ties to a U.S. state may necessitate filing a state income tax return.

Do Expats Pay Double Taxes?

Tax treaties have been established between the United States and 68 countries globally, outlining tax obligations for expats to avoid double taxation. These treaties are country-specific, and compliance with both U.S. tax standards and the tax requirements of the expat’s country of residence is crucial. Collaborating with a tax professional helps you navigate these treaties and ensure you steer clear of double taxation. 

When To File Taxes as an Expat

Expats are granted an automatic two-month extension for filing their U.S. income tax return. The filing deadline for individuals residing in the U.S. is April 15, while expats have until June 15 to file. However, taxes owed must be paid by April 15 to avoid penalties accruing daily for late payments. 

FBAR Filing

Many U.S. expats maintain foreign financial assets while abroad. The U.S. government mandates the reporting of foreign bank account information to ensure tax compliance. If you hold more than $10,000 in a foreign bank account at any point during the year, you must file an FBAR, or Foreign Bank Account Report, along with FinCEN Form 114. The deadline for these forms is April 15, with an extension to October 15.

Failure to file FBAR can lead to substantial financial penalties.

FATCA Filing

Individuals with over $50,000 in foreign assets or property during the tax year must file Form 8938, the Statement of Specified Foreign Financial Assets. This form is included with the federal income tax return and helps the government track foreign assets held by U.S. citizens and Green Card holders. Failing to file FATCA or FBAR can result in costly penalties, making compliance essential.

FBAR, FATCA & Offshore Disclosure Obligations for Expats

U.S. individuals required to file an income tax return also have obligations regarding offshore accounts, foreign bank accounts, and foreign-held assets. The requirements for filing an FBAR and FATCA depend on individual circumstances, with a common threshold of $10,000 for FBAR and $50,000 for FATCA. Non-compliance can result in substantial financial penalties, highlighting the importance of adhering to these obligations.

Common U.S. Expat Filing Mistakes in Ontario, CA

Several recurring errors in expatriate tax filings should be noted:

• Missing the extension past June 15.
• Neglecting to file an FBAR for accounts exceeding $10,000.
• Overlooking the child tax credit, resulting in unnecessary tax expenses.
• Omitting Form 2555 or Form 1116, essential for optimizing foreign income exclusion and claiming a foreign tax credit.

These seemingly minor mistakes can prove costly. Collaborating with a tax professional is the key to preventing these errors and ensuring efficient tax filing.

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

The most significant mistake expats can make is failing to file taxes at all. The IRS imposes severe penalties for individuals living abroad who neglect to file or have delinquent filings. These penalties include hefty fines and potential legal action.

Failure to file taxes on time results in three types of penalties, varying by the situation:

• Failure to File: incurring a fine of 5% of the unpaid taxes, with an additional 5% monthly penalty for each month of non-filing, up to a maximum of 25%.
• Failure to Pay: A less severe penalty of 0.5%, accruing monthly until the taxes are paid in full.
• Missed Payments: Accumulating interest over time.
• Failure to file FATCA or FBAR carries even more substantial penalties: a $10,000 fine for FATCA and potential penalties of up to $87,000 for FBAR non-compliance.

These penalties can be financially burdensome and unnecessary. To ensure compliance and avoid costly mistakes, consult with an expat tax attorney in Ontario.

Schedule a Free Consultation With an Ontario Expat Tax Lawyer Today

Each year, even experienced expat taxpayers must grapple with the complexities of filing from abroad. However, this process need not be overwhelming, especially with the assistance of an expat tax lawyer. This professional guidance ensures smooth filing and offers strategies for tax savings and optimization. Schedule a free consultation with our Ontario, CA expat tax lawyers at Evolution Tax and Legal to discover how we can simplify the process for you.