FAQs in category: General Information

Question 1

What Is a Foreign (Non-US) Financial Account?

Accepted Answer

A foreign financial account is any account located outside the United States that holds financial assets. According to the US Treasury Department, these accounts must be reported if their total combined value exceeds $10,000 USD at any point during the calendar year, even for just one day.

Types of Foreign Financial Accounts Include:

Bank accounts (checking, savings, time deposits)
Investment or brokerage accounts
Foreign mutual funds
Securities or derivatives accounts
Debit card and prepaid credit card accounts
Foreign retirement or pension accounts (including certain employer-sponsored plans)
Accounts held jointly with family or others
Accounts where you have a signature or other authority, even if the account isn’t in your name

Read more about FBAR filing requirements

What You Should Do When Filing With Greenback

When completing your Greenback Tax Companion questionnaire, be sure to:

List all foreign accounts you had over the years, even if an account was only open briefly
Include the total number of accounts across all years
Provide details for any account where you had ownership, joint ownership, or signatory authority

This ensures we can file your FBAR (FinCEN Form 114) accurately and keep you fully compliant with US reporting rules.

If you haven’t registered yet, just click the “Get Started” button in the top right corner of your screen to jump right in!

Question 2

What Is a Dependent?

Accepted Answer

A dependent is someone for whom you provide more than half of their financial support during the tax year. Claiming a dependent on your tax return may make you eligible for valuable tax benefits, such as the Child Tax Credit or the Credit for Other Dependents.

To qualify as a dependent, the person must generally meet the following criteria:

Be related to you (such as a child, sibling, or parent) or live with you for the entire year
Be a US citizen, a US resident alien, or a resident of Canada or Mexico
Not be claimed as a dependent on someone else’s tax return
Meet certain income limits, depending on your relationship to them and their age

If you’re unsure whether someone qualifies as your dependent, enter their information in the Greenback Tax Companion questionnaire, and your accountant will help you determine their eligibility.

Just click the “Get Started” button in the top right corner of your screen to jump right in!

Question 3

Why Do You Ask if I Have Any Continuing Ties or Plans to Return to a State?

Accepted Answer

When preparing your US tax return, we must determine if you are still considered a resident for state tax purposes.

Some states have strict rules that may require you to continue filing a state tax return even after moving abroad. You may be considered a resident if you:

Maintain significant ties to the state, such as owning property, maintaining a driver’s license, voter registration, or bank accounts there
Own a vehicle registered in the state
List a state address as your primary residence for official or legal purposes
Plan for your absence to be temporary, to return in the future

Even if you’re physically living abroad, certain states—including California, New Mexico, South Carolina, and Virginia—are known for aggressively pursuing expats for state taxes based on ongoing connections.

If you think you might have ties to your former state or plans to return, your Greenback accountant will carefully review your situation and advise whether a state tax return is required.

For more detailed information about how state taxes work for expats, visit our State Taxes Guide.

Get started today and let us help you ensure your federal and state tax obligations are handled correctly, or just click the “Get Started” button in the top right corner of your screen to jump right in!

Question 4

How Do I Know if My Visa Limits My Right to Work?

Accepted Answer

Some countries issue visas that grant full work rights, limited work rights, or no work rights at all.
The terms of your visa will determine whether you are legally allowed to work, and if so, under what conditions.

To find out if your visa limits your right to work:

Review your visa documentation carefully. Work permissions are often listed directly on the visa or in your approval notice.
Check with the immigration authority or official government website of your host country for the most accurate, up-to-date information.
Contact your local embassy or consulate if you need clarification on your work rights under your current visa.

Since work rights can vary widely by visa type and country, it’s important to verify your status before accepting employment abroad.

Question 5

What Should I Do if I Don’t Have a Social Security Number (SSN)?

Accepted Answer

If you don’t have a Social Security Number (SSN), you’ll need to apply for one before you can submit your US tax return.

The IRS requires a valid SSN to file all US tax returns, including expat tax returns. Without it, we cannot complete or submit your return on your behalf.

Here’s what to do:

Apply for a Social Security Number through the Social Security Administration (SSA).
- If you are outside the US, you may need to apply through your local US embassy or consulate.
- For children born abroad to US citizens, you can apply for a Consular Report of Birth Abroad (CRBA) and an SSN at the same time.
Start the application process early. It can take several weeks—or even longer—for your application to be processed, especially if applying from overseas.
Once you receive your SSN, you’ll be ready to proceed with your expat tax filing.

For more detailed information about Social Security and expat taxes, visit our US Expat Taxes and Social Security guide.

If you don’t have a Social Security Number yet, please start the application process here.

Question 6

W-9 vs. W-8: What Are They, and What’s the Difference?

Accepted Answer

Understanding the differences between the W-9 and W-8 forms for tax purposes is crucial for both US taxpayers and non-resident aliens.

These forms, issued by the Internal Revenue Service (IRS), serve distinct purposes in the US tax system. The W-9 form is used primarily by US individuals and entities to provide their Taxpayer Identification Number (TIN), while the W-8 series forms are designed for foreign individuals and entities to certify their non-US status and claim any applicable tax treaty benefits.

This guide will help you navigate the requirements, purposes, and key differences between these important tax forms.

Understanding IRS Forms: W-8 vs. W-9 The W-8 Series Tax Forms for Non-US Citizens and Entities

The W-8 forms are used to certify that the filer is not a US citizen or resident. There are several variations of the W-8 series forms, each serving different purposes for non-resident aliens and foreign entities with US-sourced income.

Types of W-8 Forms

Form W-8BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (individuals)
Form W-8BEN-E: Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (entities)
Form W-8ECI: Certificate of Foreign Person’s Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States
Form W-8EXP: Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding
Form W-8IMY: Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain US Branches for United States Tax Withholding

Who should use the W-8: Non-US citizens, foreign individuals, partnerships, foreign entities, and self-employed individuals
Key information included: Country of residence, type of income, tax treaty benefits, tax identification number (TIN), and withholding rate
Purpose: Ensures compliance with US tax laws and proper tax withholding by the withholding agent

The W-9 Form for Reporting your TIN

The W-9 form is used to report your Taxpayer Identification Number (TIN), which can be a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN).

This form is primarily used by US citizens, residents, and entities to provide their correct TIN to the Internal Revenue Service (IRS). It is commonly requested by banks, financial institutions, and employers for US tax reporting purposes.

Who should use the W-9: Independent contractors, freelancers, US individuals, and businesses receiving income
Key information provided: Tax ID number, business name, social security number, employer identification number (EIN)
Reporting requirements: Ensures correct tax residency and compliance with FATCA

Key Differences Between W-9 and W-8 Forms

Usage: W-9 is for US taxpayers to provide their TIN; W-8 forms are for non-US individuals and entities to certify their foreign status and claim tax treaty benefits.
Purpose: W-9 helps US payers report income correctly to the IRS; W-8 helps non-residents avoid or reduce US tax on certain types of income under a tax treaty.
Compliance: Both forms are essential for compliance with US tax withholding and reporting requirements, but they apply to different groups based on residency and citizenship.

When to Use Each Form

W-9 Form: Use this when starting a job as an independent contractor, opening a bank account, or in any situation where you need to provide your TIN to a US entity.
W-8 Forms: Use this when receiving income from US sources as a non-resident alien or foreign entity to ensure the correct application of tax treaty benefits and proper tax withholding.

Important Considerations

First payment: Ensure the correct form is submitted before receiving any payments to avoid unnecessary tax withholding.
Tax return: Both forms play a role in the preparation of your annual tax return.
Withholding agent: The entity making the payment must withhold the correct amount of tax based on the provided form.

For more detailed information on each form and its specific use, visit the IRS website or consult with a tax professional.

Question 7

How do I apply for an Individual Taxpayer Identification Number (ITIN)?

Accepted Answer

There are a few ways to for you to get an ITIN:

OPTION 1

You can file Form W-7, Application for IRS Individual Taxpayer Identification Number, with your Federal income tax return.
If following this method, we will be responsible for preparing only the Form W7 and including it with that Federal return. You will have to mail in the Federal return and include all the original documentation needed for the ITIN processing (proof of identity and foreign status, etc).
It is $150 for us to complete the W7.

OPTION 2

Utilize one of our  Certified Acceptance Agents (CAA).
The main benefit of using an acceptance agent is you do not have to send in your original documents (passport, etc) to the IRS. Instead, our CAAs will video-call with you and verify your identity via video chat. You will also have to mail your items (passport) to them so that they can double check your identity. Even though you are still sending items in the mail, you will get them back within a week or two with this route rather than several months with option 1.
It is $295 for an ITIN using the acceptance agent. If a family all needs ITIN numbers, there is a discount when we do several, so additional ITIN numbers are just $150.

Please contact Customer Support and let them know which option you would like to move forward with.

Question 8

Who is the primary taxpayer?

Accepted Answer

The primary taxpayer is the taxpayer listed first on your tax return. This is not always the one who has the higher income or pays the most tax. The IRS prefers consistency when naming the primary taxpayer from year to year.

When setting up a Greenback Tax Companion account, the account holder is the primary taxpayer.