Santa Rosa Expat Tax Attorney

Preparing for your annual tax return can be a challenging task, and the complexity multiplies for U.S. citizens and Green Card holders living and working abroad. Filing taxes from overseas involves navigating intricate legal and financial nuances, often requiring weeks of effort to collect the essential financial data and personal documents. Even experienced individuals find this process daunting, which is why our team of expat tax attorneys is here to offer guidance and support when it’s time to complete your annual tax return.

Why Hire Evolution Tax and Legal for Your Expat Taxes?

Our team of attorney-CPAs, duly licensed, possesses a unique blend of expertise, marrying the knowledge of a tax attorney with the skills of a CPA. When working with an expatriate tax attorney from our firm, you can expect:

• The fusion of CPA proficiency with attorney knowledge to deliver the finest in international tax accounting, advisory, and legal services.
• A streamlined online system ensures accessibility, whether you’re filing taxes in Santa Rosa or from thousands of miles away.
• A wealth of experience working with clients worldwide, ranging from individuals to small and large businesses. We are well-versed in handling diverse and complex tax situations.

Our capacity to provide the services of bothBy bringing together CPAs and tax attorneys under one roof, we offer a unique blend of expertise and cost savings that other firms can’t match. Our value proposition aims to deliver the capabilities of a Big 4 accounting firm coupled with the personal attention and meticulous care of a smaller accounting firm. We prioritize transparency and responsiveness, eagerly welcoming new clients to experience the value that Evolution Tax and Legal provides.

Expat Tax Services We Offer in Santa Rosa

Our team of expatriate tax attorneys provides a wide range of expat tax services, including:

• U.S. Federal Tax Return Preparation: Our Santa Rosa tax attorneys work with you to gather the necessary financial information for your U.S. federal income tax returns, ensuring compliance with IRS tax standards.
• State Tax Returns: For individuals living and working abroad with financial or residential ties to specific U.S. states, we help determine if filing a state tax return is necessary and assist with state tax compliance.
• Reviewing Prior Returns: Our team reviews your previous tax returns to identify errors and provide solutions to rectify and prevent them in the future.
• Tax Planning Analysis: Achieving tax savings while ensuring compliance can be complex. Alongside the review of prior returns, our tax experts conduct a tax planning analysis to maximize savings on your income tax return.
• Federal and State Audit Representation: We offer representation during federal and state tax audits for both individuals and businesses.
• Non-Filers and Delinquent Filings: For those who have failed to file taxes or filed incorrectly, our services help rectify non-filing and delinquent filings, ensuring compliance with IRS tax standards.

How Do Expats File Taxes?

Most countries worldwide tax individuals based on residency, meaning only those living within their borders throughout the tax year are required to pay taxes, irrespective of their citizenship. The United States, however, has a different approach. U.S. citizens must pay taxes each year, regardless of their residency status in another country. Thus, U.S. citizens and Green Card holders residing anywhere in the world are obligated to pay taxes on both earned and passive income throughout the tax year if they meet specific thresholds. This income includes wages, income from investments, rental properties, and retirement plan payments. Reporting of foreign accounts and assets is also mandatory. Expats who maintain financial or personal ties with certain U.S. states may also be required to file a state tax return.

Do Expats Pay Double Taxes?

The United States has established tax treaties with numerous countries worldwide to guide individuals living and working abroad on which country they should pay specific taxes to, thus avoiding double taxation. These treaties vary from country to country, demanding a careful review of the tax treaty relevant to your country of residence. These treaties are laden with legal and financial jargon, often challenging to interpret without expertise in either field. Our team of dual-certified attorney-CPAs possesses the knowledge to comprehend these treaties and provide you with pertinent information for your tax situation. 

When To File Taxes as an Expat

Expatriates enjoy an automatic two-month extension for filing their U.S. income tax return. The deadline for individuals residing in the United States is April 15, and for expats, this extension extends the filing date to June 15. However, taxes owed must still be paid by the original deadline of April 15, with daily penalties for late payments. 

FBAR Filing

It is common for U.S. citizens living and working abroad to open bank accounts in their host country. The U.S. government mandates that this foreign bank account information be reported, ensuring tax compliance for individuals abroad. If you hold over $10,000 in a foreign bank account at any point during the year, filing an FBAR (Foreign Bank Account Report) is mandatory, regardless of your place of residence.

The FBAR must accompany your U.S. federal income tax return each year. Along with the FBAR, you must file FinCEN Form 114. Both forms are due by April 15, along with your income tax return, but an automatic extension extends the deadline to October 15. Failure to file these forms due to taxpayer negligence can result in financial penalties.

FATCA Filing

For individuals holding over $50,000 in foreign assets or property during the tax year, Form 8938, the Statement of Specified Foreign Financial Assets, is required. This form is submitted with your federal income tax return and aids in tracking foreign assets held by U.S. citizens and Green Card holders. If you possess over $50,000 in foreign assets but don’t meet the foreign income filing requirement, consulting a tax attorney is recommended, as failure to file FATCA may incur costly penalties.

FBAR, FATCA & Offshore Disclosure Obligations for Expats

U.S. individuals required to file an annual income tax return also have obligations regarding the disclosure of certain offshore accounts, foreign bank accounts, and foreign-held assets to the IRS. The requirements for filing an FBAR and FATCA vary based on the individual, but generally, if you held over $10,000 in a foreign bank account at any point during the year, you must file an FBAR. The threshold includes the total of all foreign bank accounts you hold. If, at any time during the year, you possess over $50,000 in foreign assets, you must file Form 8938. Adhering to the filing requirements for FBAR and FATCA is crucial, as non-compliance can lead to significant financial penalties.

Common U.S. Expat Filing Mistakes in Santa Rosa

Our experienced team identifies several common expatriate tax filing errors worth noting:

• Omitting Form 2555 or Form 1116 in your filing: Form 2555, the Foreign Earned Income Tax Exclusion Form, is vital for determining the exclusion of foreign income and residency status through bona fide residence or physical presence tests. Form 1116 is necessary for claiming a foreign tax credit. Failure to include these forms can result in unnecessary overpayment of taxes.
• Failing to file an FBAR with your tax return: The FBAR is compulsory for individuals with over $10,000 in foreign bank accounts during the tax year. Neglecting this requirement can lead to substantial penalties.
• Neglecting to claim the child tax credit: Claiming dependents in your tax filings can save you money. Omitting this credit leads to additional taxes instead of potential savings.
• Failing to request an extension past June 15.

To optimize your tax payments and avoid these common pitfalls, partnering with a tax professional to create a tax plan and seamlessly file your return is advisable.

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

For individuals living abroad who fail to file taxes or have delinquent filings, significant financial and legal penalties may apply. The penalties for not filing your income tax return on time vary depending on your situation:

• Failure to File: This is the most severe penalty, resulting in a fine of 5% of the unpaid tax amount, with an additional 5% penalty added for each month of non-compliance. The maximum penalty can reach 25% of the taxes owed plus the full tax amount.
• Failure to Pay: While less expensive than failure to file, this penalty still costs money. It starts at 0.5% and increases by 0.5% monthly. Over time, this penalty can accumulate if the taxpayer doesn’t address their tax compliance.
• Missed Payments: These missed payments accrue interest over time.
• Failure to file FATCA or FBAR: While FBAR and FATCA are information filings without direct payment requirements, failing to file can result in substantial penalties. Failure to file FATCA can lead to a $10,000 fine, and failure to file FBAR can result in penalties of up to $87,000.

It is crucial to ensure compliance and avoid these costly errors by working with an expat tax attorney.

Schedule a Free Consultation With a Santa Rosa Expat Tax Lawyer Today

No matter your location worldwide or your country of residence, our Santa Rosa-based expat tax lawyers are prepared to streamline your tax season. Schedule a free consultation with our team today to gain insights into your tax situation and explore the Evolution Tax and Legal approach.