US Taxes for Expatriates

US Taxes for Expatriates

Especially for those with foreign spouses


Filing and Requirements

IRS: Form 1040 + 2555 + 8965 + 8938

  • 1040 – Basic Return
  • 2555 – Foreign Earned Income Exclusion – Exclude up to $100,800 (2015) of income from US taxes
  • 8965 – Health Coverage Exemptions – Exemption from mandatory health care if covered under foreign program
  • 8938 – Specified Foreign Financial Assets – Report all assets with an aggregate maximum over $50,000 (living in the US), $200,000 (living abroad, amount at end of tax year), $300,000 (living abroad, amount at any time of the year) – Sources: 1, 2, 3, 4

Convert rates using the US Treasury tool.

FinCEN: FBAR Form 114

  • Report all assets with an aggregate maximum over $10,000
  • Form – may require Adobe Acrobat Reader
  • Instructions

Contact the IRS

Filing Online for Free

Sites where filing is free and comprehensive:

  • FreeFileFillableFormsIRS, hard to use, comprehensive, flexible input rules, prone to errors
  • H&R Block – Easy to use, repetitive, strict input rules, somewhat comprehensive
  • TaxAct – Easy to use, repetitive, slow, limited

Tip: use a free option to check your work, then use the IRS app to file.

Filing Rules for Foreign Spouses

From the IRS:

If you are any of the following, you must file a return:

  • A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during the year. However, if your only U.S. source income is wages in an amount less than the personal exemption amount (see Publication 501, Exemptions, Standard Deduction, and Filing Information), you are not required to file.
  • A nonresident alien individual who is not engaged in a trade or business in the United States and has U.S. income on which the tax liability was not satisfied by the withholding of tax at the source.
  • A representative or agent responsible for filing the return of an individual described in (1) or (2),
  • A fiduciary for a nonresident alien estate or trust, or
  • A resident or domestic fiduciary, or other person, charged with the care of the person or property of a nonresident individual may be required to file an income tax return for that individual and pay the tax (Refer to Treas. Reg. 1.6012-3(b)).

Generally, no US income means no filing requirement. Source 1, 2, 3.

Filing as Married Filing Separately

Choose this status if your spouse does not need to file or if you are not claiming any spousal exemptions (smaller standard deduction).

From the IRS:

You can file Form 1040. If your taxable income is less than $100,000, you may be able to file Form 1040A. Select this filing status by checking the box on line 3 of either form. Enter your spouse’s full name and SSN or ITIN in the spaces provided.

ITIN or SSN

From the IRS:

If your spouse doesn’t have and isn’t required to have an SSN or ITIN, enter “NRA” in the space for your spouse’s SSN. Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax.

If your spouse is a nonresident alien and you file a joint or separate return, your spouse must have either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). To get an SSN for your spouse, apply at a social security office or U.S. consulate. You must complete Form SS-5. You must also provide original or certified copies of documents to verify your spouse’s age, identity, and citizenship. If your spouse is not eligible to get an SSN, he or she can file Form W-7 with the IRS to apply for an ITIN. Refer to Taxpayer Identification Numbers (TIN) for more information.

Source 1, 2, 3, 4, 5, 6.

Other Information and Links

  • 2015 Taxes
  • International Filing 1, 2

See more: TGMJapan

 

 

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