Globalization and the increase in mobility of the modern workforce have led to interesting changes; it is not uncommon to come across global mobile workers, retirees spending portions of their time abroad every year, or even digital nomads. An increasing number of Americans are now part-time expats. When taxes are due, how will their part-time status affect their expat taxes? And, why is it important to have the most competent American expat tax services when completing your return?
Bob, a consultant living in Philadelphia, PA, is in charge of a lucrative project that requires him to travel to Japan annually. The proximity to his client was convenient, and he became enthralled by Japan’s culture and history; so, Bob soon set up roots in Japan. He purchased a home and resided there for six months every year and spent the remaining months in the US.
Bob approached Greenback wanting to ensure that all facets of his tax situation were considered and that he was getting the best American expat tax services possible, and so we helped prepare him for what he might owe. The accountants at Greenback discussed with Bob residency rules and tax laws in Japan, foreign assets that Bob may have accumulated, and how to maximize Bob’s deductions.
How Can Bob Save Money on His Expat Taxes?
The Foreign Earned Income Exclusion (FEIE) is sometimes not applicable in cases such as Bob’s because, to qualify for the exclusion, expats must meet the requirements of either the physical presence test or the bona fide residence test, but both tests have a minimum for time spent in the host country. For expats in similar situations, we recommend capitalizing on foreign tax credits to help minimize tax liability.
Are You a Part-Time Expat?
If you find yourself residing in different parts of the globe only part of the year, you may need assistance ensuring that you have the best American expat tax services available. Contact our expert accountants today, and they will help you use every exclusion and deduction applicable.