U.S. Citizens and Resident Aliens Living Abroad
due date April 15 for your Income Tax Return

We are glad that Gracy Hart (for more information you can have a look at the end of this article) is working with us so that we can help you with your USA Income Tax Return and your Dutch Income Tax Return.
If you want more information feel free to contact Esther Rommel: e.rommel@fiscaliber.nl or +31 6 41 02 49 14.
If you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live. However, you may qualify for certain foreign earned income exclusions and/or foreign income tax credits.

You have to file a U.S. income tax return while working and living abroad unless you abandon your green card holder status by filing Form I-407, with the U.S. Citizen & Immigration Service, or you renounce your U.S. citizenship.

The due date for filing a federal individual income tax return generally is April 15 of each year if your tax year ends December 31st. The tax return can be mailed or electronically filed. However, if you are a U.S. citizen or resident alien, who is either: (1) living outside of the United States and Puerto Rico and your main place of business or post of duty is outside of the United States and Puerto Rico; or (2) in military or naval services on duty outside of the United States and Puerto Rico on the due date of your return, you are allowed an automatic 2-month extension until June 15 to file your return and pay any tax due.

If you have a balance due to the IRS, we can electronically file your tax return and have a direct debit made from a bank account in the US. If you do not have a U.S. bank account, ask if your financial institution has a U.S. affiliate that can help you make same-day wire transfers. In addition, in order to help track Americans who are not reporting their foreign income, IRS and the US Treasury have recently instituted a number of informational forms that must be filed.

1. Form TDF 90-221 also known as FBAR. This is a relatively simple form that is used to collect basic information on foreign financial account controlled by a US citizen. The form is sent to the Treasury Department and is not filed with your tax return. As it is only an informational form, it will not have impact on your tax liability. Financial account definition includes: a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts. As of July 2013, this form is supposed to be filed electronically as FinCENForm 114.

2. FBAR must be received by the Department of the Treasury by June 30th. There is no extension for filing this form. The FBAR is filed separately from your tax return. It should be filed electronically on the FinCEN website.

3. FBAR Penalties. The penalties for non-filing of the FBAR are extremely harsh. They range from an automatic penalty of $10,000 to 50% of the balance of the account. It gets worse - if the IRS investigator can prove that you willfully withheld the information from the government criminal charges can be filed.

4. Form 8938 will be required starting fiscal year 2011. Form 8938 (FATCA) must be attached as an annex to your 1040. The reporting requirements of foreign financial assets are more extensive and more complicated than those for the FBAR. The threshold of foreign assets owned depend on where one is domiciled and whether one is filing married filing jointly or otherwise.

Gracy Hart
Gracy Hart is a Certified Public Accountant with over 28 years of experience in both public accounting and private industry. She fully understands the dynamics of accounting services and how each business is affected differently. She has extensive experience providing these services to family-owned and closely held businesses and is well versed in the common problems encountered by a wide range of organizations. In addition, she is properly trained to offer timely completion and a thorough understanding of all financial and tax-reporting requirements facing businesses. She is also skilled at identifying opportunities to minimize or defer income taxes to maximize the bottom line and assist business owners in achieving their goals. With this experience, she can truly be the most trusted advisor and bring exceptional value to our clients.

Esther Rommel