In the US Expatriate Tax Planning podcast, Janathan Allen discusses important tax issues from the perspective of a US Expatriate. One of the first and most important thing to know for any US taxpayer is the United States taxes its citizens on all income they earn worldwide. US expatriates who remain US citizens (do not renounce their citizenship) remain US taxpayers. Unfortunately, many US expats (and even US taxpayers in general) believe one does not have to report offshore income to the IRS and California. This simply isn’t See more +

In the US Expatriate Tax Planning podcast, Janathan Allen discusses important tax issues from the perspective of a US Expatriate. One of the first and most important thing to know for any US taxpayer is the United States taxes its citizens on all income they earn worldwide. US expatriates who remain US citizens (do not renounce their citizenship) remain US taxpayers. Unfortunately, many US expats (and even US taxpayers in general) believe one does not have to report offshore income to the IRS and California. This simply isn’t true.

Ms. Allen begins with a discussion about common tax risks. One of those factors includes the responsibility to file the FinCEN Form 114 or FBAR, as well as the IRS Form 8938. The FBAR goes to FinCEN at the department of Justice, while the Form 8938 provides much of the same information to the IRS. The next part of the conversation focuses on the fact that US accounting (GAAP) is actually different than the way Europe and most of the rest of the world recognize “income” and that can really come back to haunt a US Expat. Ms. Allen discusses PFIC investments and even the costs and taxes associated with mutual funds or retirement plans (pensions).

Ms. Allen continues with business-related taxes and IRS Form 5471. She provides the example of a US expat who works in China but lives in Japan, and the types of strategies (entities and where and when income is realized) that can actually increase the US tax burden of a US expatriate, when a little international tax planning and transactional planning might substantially reduce the tax exposures of a US expat.

Ms. Allen discusses the strategy of “time” – when and where income is actually realized – and the advantages of a US C Corporation with a fiscal tax year of 1 April to 31 March, and how that can be utilized to accelerate or decelerate capital gains or losses. If you are a US expat who is interested in reducing tax exposures in the United States with the IRS, this podcast is for you.

Listen to US Expatriate Tax Planning – Part 1 and we hope you enjoy learning more about the important issues associated with the tax issues and challenges facing US expats. See less -