Passport Updates That May Affect You as a US Expat

Passport Updates That May Affect You as a US Expat
December 30, 2016

As a US expat, your passport is your lifeline. That’s why, with new changes coming for US passports, you should make sure you’re in the know so you can take action where needed. There are also tax implications regarding your US passport – which we’ll discuss below.

Passport Renewal

Ensuring your passport is up-to-date is critical since you’re living abroad as a US expat, and while you may think you’re on top of it, you may not be giving yourself enough time to renew. There is currently a very large backlog of passport applications in queue, which is due in part to a piece of legislation enacted nearly ten years ago. The law established passports as necessary for travel to and from Canada, Mexico and the Caribbean, which prompted millions of Americans to get their passports – meaning most of these are in need of renewal as we approach the ten-year window of time. At the very least, passport renewal takes about six weeks, and with potential delays due to the surge in applications, it could be even longer.

Also, if you have children, note that child passports are only valid for five years (rather than ten, like adult passports) and require more paperwork. If you are planning to move abroad and become a US expat in 2017, make sure you give yourself plenty of time if you must apply for or renew your passport!

New Security Features

A fairly new Federal law, the REAL ID Act, will require updates to all state-level identification for security purposes by adding features like machine-readable chips. Some states are lagging behind on switching over to these more secure forms of ID, which means their licenses may soon be invalid for air travel. This means a US passport will become the lifeline for these individuals as well if they plan to do any air travel while their state gets up to speed with the new Federal requirements. All states must become compliant by 2020 – you can see if your state has complied or if it is still in progress here.

In addition to the new security features of state-level IDs, US passports will also include technology to increase security and decrease opportunities for fraud by adding a data chip with your personal information. 

Passport Revocation

Just over a year ago, a law was passed that allows the US State Department to revoke the passports of those who owe $50,000 or more to the IRS. That may seem like a high amount, but it is actually quite easy for a US expat to rack up debt due to interest and penalties for failure to file or delinquent filing of certain tax forms. As a US expat, your passport truly is the key to your identity and is required for travel, work visas, residency visas, banking transactions and more.

Most of the time, as a US expat, you won’t owe money on your US Tax Return at all due to tax breaks from the Foreign Earned Income Exclusion, Foreign Tax Credit and tax treaty provisions between the US and your host country. Failing to file (or filing incorrect forms), though, can lead to serious penalties and interest, so it’s very important to stay on top of your filing obligations in order to prevent these fines – or worse, the revocation of your passport. Learn more about your US expat tax requirements and ways to save by downloading a US expat tax guide.

Have Questions About Your US Expat Tax Obligations?

One of our expat-expert accountants can help you understand your tax requirements as an American living abroad so you can be sure you are on the right track when it comes to tax compliance. Contact us today!

Every expat should know these 25 things about US expat taxes. Find out for yourself.
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