Greenback Expat Tax Offers Explanation of Common IRS Forms

Greenback Expat Tax Services, a leading tax preparation service for US expats, is offering a basic explanation of the US tax forms needed by expats in advance of the June 17th deadline.

Read the full press release, originally published on PR Web, below:

Form 1040

Form 1040 is the US Individual Income Tax Return. The most important consideration with Form 1040 is that all income must be reported regardless of where it is earned, what currency it is earned in or whether it was taxed locally. More in depth information about Form 1040 can be found on the Greenback Expat Tax Services website.

Form 2555

Form 2555 is for reporting Foreign Earned Income Exclusion (FEIE). Qualified expats are able to exclude up to $95,100 of foreign earned income from US tax obligations for the 2012 tax year. For more specific information about the requirements of Form 2555 can be found on the Greenback Expat Tax Services website.

Form 1116

Form 1116 is the Foreign Tax Credit allows expats who pay taxes to their host country to reduce their US tax obligation. With the Foreign Tax Credit, US tax liability is reduced dollar for dollar by the amount tax paid to the host country. More information about filing the Form 1116 can be found in this Greenback Expat Tax Services article.

Form 8938

Form 8938 is the Statement of Specified Foreign Financial Assets. As a result of the Foreign Account Compliance Tax Act (FACTA) US expats who meet the requirements of the Physical Presence Test of the Bona Fide Residence Test must submit this form if they meet the account thresholds. Specific information about the requirements for Form 8938 can be provided by Greenback Expat Tax Services.

FBAR

The Report of Foreign Bank and Financial Accounts (FBAR) requires anyone with $10,000 or more in a foreign bank or financial account to report that income to the Treasury Department. The FBAR is filed separately from other expat documents and has a deadline of June 30.

“US taxes for expats are more complex than a standard US tax return because expats can qualify for a number of exclusions and/or credits that people living in the US do not qualify for,” said Greenback President David McKeegan. He continued, “This can save US expats thousand or hundreds of thousands of dollars in US taxes.  Additionally, the IRS has a number of programs US expats can use to catch up on late tax returns such as the IRS Streamlined Process or the Offshore Voluntary Disclosure Initiative.”