Daily LifeExpat Tax Info from Barron Harper

By Barron Harper
www.taxbarron.com

Also by Barron Harper:
Report of Foreign Bank and Financial Accounts II
Congress Legislates Accuracy Penalty
Qualifying for Foreign Earned Income Exclusion and Economic Stimulus
Report of Foreign Bank and Financial Accounts

2010 Expat Tax Filing Requirements

Many expatriates could be anticipating this year’s approaching tax season with some trepidation. Enough they say when confronted with filing a France tax return because as residents they must report and pay taxes on their world-wide income. Non-residents enjoy some respite since they only report French-sourced income. But any US citizen or deemed US resident is obliged, regardless of foreign residence, to report his or her world-wide income annually to the Internal Revenue Service. Failure to do so can result in increasingly severe penalties.

There are exceptions to this filing/reporting requirement. If your income is below an income threshold based on your filing status, then no problem stateside. These thresholds are:

Single: $9,350

Over 65: $10,750

Head of Household: $12,000

Over 65: $13,400

Qualifying widow(er): $15,050

Over 65: $16,150

Married filing jointly: $18,700

1 spouse over 65: $19,800

Both spouses over 65: $20,900

Married filing separately: $3,650

In cases where you are earning foreign income that is excluded up to $91,400 in 2009, such excluded earnings still count toward the threshold. So if your only source of excludable foreign earnings is $80,000, you would still be over the threshold’s filing requirement. And should you still fail to report these foreign earnings to IRS, the Service can, in an audit, deny you that $91,400 foreign earned income exclusion and assess taxes, penalties and interest.

The deadline for paying 2009 taxes is 15 April whereas the deadline for filing your 2009 tax return is 15 June 2010. An extension can be filed to delay the filing due date to 15 October, but not the paying due date.

Any expatriated American citizen or resident who has not filed a tax return for some years can comply by filing the most recent three years returns. IRS in increasing its powers of audit, has been rigorously targeting Americans abroad.

In addition to filing the basic income tax return Form 1040 and related schedules, Americans who are invested in foreign corporations, foreign partnerships and foreign trusts are required to file related information returns for these entities.

In the main, Americans filing and paying taxes in France will usually not owe US taxes. The tedium is in the US filing requirements.

Barron Harper is a member of the National Association of Public Accountants (www.natptax.com) and EBBF (www.ebbf.org). For further information, see www.taxbarron.com.

Related Link:
Expat Tax Services

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