If you are a US citizen or resident alien living outside the United States, even though you may not owe any US tax, you generally are required to file US income tax returns, estate tax returns, and gift tax returns. If you have an interest in, or signature or other authority over, non-US financial accounts whose aggregate value exceeded $10,000 at any time during the year, you generally must file an FBAR, regardless of whether you have to file other returns.
The rights of Americans abroad are being attacked - through the Administration's plans to withdraw from the Universal Postal Union in mid October as part of their trade war abroad. If the withdrawal goes forward, postal mail service to the United States will be thrown into disarray and the USPS expects postal service to and from the States to be massively disrupted. More information on the projected withdrawal here.
Beyond the widespread, unprecedented disruption to personal, business and financial affairs that the withdrawal would create, voters abroad would not be able to return their ballots or ballot requests by standard postal mail for weeks or months following the withdrawal.
Just consider - in 2018, 67% of ballots from abroad were returned by postal mail.
This information is from the Democrats Abroad, but it applies to every voter from abroad, whatever your political persuasion.
Call your Senators and your Representative and demand that they pressure the Trump administration to stop this nonsense now.
• Demand they push for the Trump administration to allow the uninterrupted flow of overseas mail to the US
• Remind them that your ability to vote depends on being able to get your overseas ballot back to the US on time, and that goes for everyone voting abroad in every state and district across the country.
• Consider including a personal story of your experience returning your overseas ballot, or other ways you depend on sending and receiving mail to and from the US.
Contact your governor and state legislators and ask them to step up to preserve your right to vote from abroad.
Whether you’re voting for President or town council members, the rules that determine how you can request, receive and return your ballot are decided at the state level. State legislation can make it harder for you to vote from abroad, or it can create a path around the mess that will be made by the Postal Union withdrawal.
1. Use this guide from Vote From Abroad to look up your state’s ballot delivery methods.
2a. If your state requires ballot requests and/or returns be sent by mail (and not email/online submission), contact your governor and state legislators.
• Ask that they push for legislation in 2020 which allows their military and civilians abroad to submit their absentee ballot requests (aka “FPCAs”) and overseas ballots by email or online submission.
2b. If your state allows ballot requests and/or returns to be done online or via email, consider letting your governor and state legislators know how much you appreciate these essential, modern solutions which ensure that you can easily and securely request and return your ballot. In order for these options to be maintained, it’s helpful for them to know why it matters to you!
Protect your right to vote!
• If you aren’t registered to vote yet and will vote in any of these states, register to vote as an overseas voter NOW -- before the UPU withdrawal.
Go to www.votefromabroad.org and click “start” to fill out your voter registration form and overseas absentee ballot request. Then mail it in ASAP.
6 New Jersey
7 New York
9 Rhode Island
10 South Dakota
11 West Virginia
Thank you for your attention - and for your action!
(this information was taken from an email sent by Julia Bryan, Global Chair, Democrats Abroad, 17 Sept. 2019)
U.S. Taxation Issues
IRS Newswire recently issued a bulletin advising U.S. taxpayers filing from overseas of various deadlines and reporting requirements. To read more, go to:https://content.govdelivery.com/accounts/USIRS/bulletins/2496363?reqfrom=share&mc_cid=2c9e572a4f&mc_eid=9bcd865074
Tax Fairness for Americans Abroad Act (TFAA)
The bill (H.R. 7358), introduced on 20 December 2018 by Representative Holding (R-NC), would change the approach to taxing US citizens living and working overseas to a residency-based – some call it territorial – taxation approach. Americans overseas would no longer be taxed on income that is not earned in the United States, bringing the U.S. in line with the global norm for taxation and alleviating problems of double taxation and compliancy costs for millions of Americans overseas. The proposed legislation would work off the Foreign Earned Income Exclusion (FEIE) and would create an exclusion for income earned outside of the United States by qualified non-resident U.S. citizens. Some of the “trickier issues” include how to define personal property and how to tax gains related to foreign property before the taxpayer qualifies as a foreign-based resident. The next steps will be to re-introduce the bill in the 116th Congress and assign a new bill number and to request the Chairman of the House Ways & Means Committee to hold hearings on the bill. The hearings will help to define issues such as whether failing to file a foreign bank and financial account report would disqualify someone from receiving the exclusion for not being fully compliant with the requirements.
Two ACA webcasts to update the community on Rep. Holding’s bill were broadcast on 13 and 14 March, featuring Matt Stross, Tax Counsel for Representative Holding; ACA Legal Counsel Charles Bruce; and several tax professionals. For full audio of both webcasts, go to https://www.americansabroad.org/?mc_cid=c45ae4a41f&mc_eid=9bcd865074#TFAAWebcasts.
By Olga Kocybik (AIWC Düsseldorf) FAWCO
The Child Tax Credit (CTC) is up to $2,000 per child per year with $1,400 refundable portion. That being said, provided no tax is owed to the IRS, the parent(s) would be able to receive a payment of $1,400 per child. The new income thresholds are:
In addition, the refundable portion of the NEW credit cannot be greater than 15% of your earned income which exceeds $2,500. For example, if you earned $11,000, your refundable portion is limited to $1,275 ($11,000 less $2,500 times 15%). Other limitations and reductions of the credit exists but they are unlikely to apply to those living abroad.
Additional rules for expatriates
And as with everything else out there, there are some exceptions and special guidelines as to how the tax rules apply to expatriates:
What if you were eligible for the CTC all these years but have not filed your returns?
You may still make up for the lost opportunity. But keep in mind that the IRS has the three- and two-year statutes of limitations. If you have already filed but wish to change your return, such amended must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later. If NO return was filed, the statute of limitations is 2 years from the time the return was due including extensions. To illustrate, if you have not filed but was eligible to receive the CTC refund for 2016, you have until April 15, 2019 (2 years from the due date of the 2016 return or April 15, 2017) to file the 2016 return and obtain the CTC.
In applying the provisions of this and any other tax article, it is important to understand the impact of applicable tax laws will vary between individual taxpayers.
Please consult your tax adviser to determine how the tax laws discussed may affect your particular US tax situation.
Dates often slip by for those who live outside the US. However, if you are approaching your 65th birthday, it’s the time to consider signing up for Medicare. Although Medicare does not typically cover medical costs incurred while living abroad, there are several things to consider: whether you plan to return to the US, whether you (or your spouse) are working outside of the US and provided health insurance by an employer, and the potential costs of premium penalties for late enrollment.
The sign-up period is no sooner than three months prior to your 65th birthday and the three months after your 65th birthday; in other words you have about a six-month window. For example, if your birthday is May 20, the original enrollment period would be February 20 through August 19. It takes 4 to 6 weeks to process the enrollment application.
If you miss the enrollment period, then you would need to enroll in the General Enrollment Period (GEP) of January 1 - March 31, with coverage becoming effective on July 1 of that year. Some people will be able to enroll at the end of their previous insurance coverage right away, but they need to check with Medicare. Always remember that it will take several weeks minimum to process an application once it is received by Medicare. There may be exceptions in individual cases, but again, check with Medicare directly, so there are no lapses in insurance coverage.
Normally, you can sign up online through the Social Security Administration website, www.ssa.gov, but if you reside overseas, you should phone your closest overseas SSA office and you can be enrolled over the phone. Not all Consular posts have SSA offices. For example, I live in the United Arab Emirates and was registered by phone from a representative in Rome.
For those who have already registered for Social Security benefits, you may have been registered for Medicare Part A benefits. There is no charge for Part A, if you have paid into social security a minimum of 40 quarters.
Part B and other sections of Medicare will likely charge a fee; currently the minimum fee for Part B is $135/month. You may want to have Part B if you ever plan to move back to the US or frequently visit. If you fail to register on time for Part B, you may incur premium penalties and gaps in coverage when you move back to the U.S and apply at a later date.
Please refer to www.ssa.gov, www.ssa.gov/foreign/foreign.htm and www.medicare.gov for information and instructions.
20 May 2019 https://www.fawco.org/us-issues/102-us-issues/citizenship/4113-medicare-is-it-time
US Liaison: Johanna Dishongh firstname.lastname@example.org
April 2019 submitted by Dale Finlayson
Expat filers got an automatic extension to June 15th – but if you owe any tax, you must pay by the April deadline or face a late-payment penalty. And under the new tax legislation (I learned at the FAWCO conference), anyone earning more than $5 – yes, you read that right, FIVE DOLLARS! – during the tax year must file a return. And “earnings” includes bank interest. So in effect, every expat must file. A further extension to October 15th must be submitted by June 15th by filing IRS Form 4868. Once filed, you’ll automatically be granted an extension to October 15th. The deadline for filing the FBAR (Form FinCEN 114 via the BSA e-filing system) is automatically extended to October 15th and no extra forms need to be filed. But keep in mind that interest will continue to accrue on any money you owe the IRS.
ACA advises US citizens living overseas that voter suppression (including purges of the voter rolls) in about half of the states makes registering to vote each year more important than ever before. Preserve your right to vote! State primaries will be starting soon and you can vote from overseas for national office-bearers. Don’t miss out – 2020 will be an important election year!
As the AWCCS is a member of FAWCO, we ask our members to register to vote through their website. The US (formerly Overseas) Vote Foundation is withdrawing support for the link to the FAWCO website (an alternative is being sought), because so few members linked to it register to vote. For the moment, it is still available on the FAWCO website and the more FAWCO members who register via the website, the greater FAWCO’s credibility when lobbying in Washington during the annual Washington Week.
American Citizens Abroad was asked to contribute to the US Government Accountability Office’s (GAO) report on the implementation of the Foreign Account Tax Compliance Act (FATCA) and its effects on US persons living overseas. Important summary conclusions were that close to 75% of taxpayers reporting foreign assets to the IRS also reported them separately to the Treasury – indicating potential unnecessary duplication; and that some Americans living abroad can’t get services from foreign banks that find the law too burdensome.