The IRS Bona Fide Residence Test an Foreign Housing Exclusion

The IRS Bona Fide Residence Test an Foreign Housing Exclusion

Qualifying for the Bona fide residence test and foreign housing exclusion https://ift.tt/34bCGFR In an earlier video, I discussed the benefits of the foreign income exclusion. Now in order to qualify for that and the foreign housing exclusion, you must satisfy something known as the IRS Bona Fide residence test. Hi I’m Anthony Parent of IRSMedic and in this video I will show how the bona fide residence test is satisfied and I will also be talking about the foreign housing exclusion so that your IRS tax bill will be as low as allowed by law. There are a number of factors that the IRS uses to determine if you have a bona fide residence in another country so that you are eligible to claim the Foreign Earned Income Exclusion. According to the IRS:   “You meet the bona fide residence test if you are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.”   They go on to say: “Questions of bona fide residence are determined on a case-by-case basis, taking into account such factors as your intention or the purpose of your trip and the nature and length of your stay abroad. You must show the Internal Revenue Service (IRS) that you have been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. The IRS decides whether you qualify as a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555, Foreign Earned Income. “   Facts that the IRS will use to determine if you are a bona fide resident include:   The reason for you staying abroad.  The intended length of your stay. Whether your stay was uninterrupted. Whether your stay lasted an entire tax year. Whether you are subject to the income tax laws of the foreign country. If you have a domicile in the U.S.  So do you see - how much gray area there is? This should be a simple rule - but nothing is ever quite simple with the IRS - this is why taxpayers and tax professionals have a hard time keeping up with the complicated rules, that always seem to change. To something even more complicated.   Understanding the Foreign Housing Credit   The Foreign Earned Income Exclusion is not the only benefit you can get from living in another country. The IRS also allows you to deduct part of your housing costs while overseas. You can typically exclude anything in excess of 16 percent of the total amount of the Foreign Earned Income Exclusion that you have claimed.   Parnet & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 info@irsmedic.com https://youtu.be/_zJv2jL-13o IRS Medic

*** SPECIAL UPDATE 2019 IRSMedic Master Tax Guide is up ****

*** SPECIAL UPDATE 2019 IRSMedic Master Tax Guide is up ****

Follow this link to the IRSMedic 2019 Master Tax Guide https://ift.tt/2KLA8Xi We have it all the essentials covered - you’ll find information on - Federal income tax tables, rates and brackets - State income taxes - Payroll taxes - Taxes on your pay stub - Information on Sales and use taxes - Dividend taxes - Taxes on interest earned - Gift taxes - Estate taxes - Inheritance taxes - Capital gains taxes - Taxes on trusts - Business pass through taxes including the new Qualified Business Income (QBI) deduction - Corporation taxes You know I really think that’s a lot of taxes. Don’t you? Now we cover the basics, like the different ways to file your taxes, the increased standard deduction amounts, and stealthy payroll taxes that you may not be aware are costing you so much. Follow the link and if there are topics you wish to us to cover, please leave them in the comments below. Be sure to subscribe, we continuously update with essential IRS news. This is Anthony Parent of IRSMedic, enjoy our guide as much as you can, and thanks for watching. https://youtu.be/IUM6_dNXF7s IRS Medic

The Foreign Earned Income Exclusion (FEIE): How does it work? Can it help you?

The Foreign Earned Income Exclusion (FEIE): How does it work? Can it help you?

https://ift.tt/1RfwK1f What is the Foreign income exclusion? How does it work? If you spend time living, studying, or working abroad, the Foreign Income Exclusion can greatly lower your tax bill. In this video, we explain how this exclusion works and to what type of income it applies All of your world wide income is taxable   Typically, U.S. citizens and residents are taxed on their worldwide income, wherever it is earned. However, if you meet certain requirements, you can exclude a certain amount of your foreign earnings from your income when you submit your tax return. The amounts you may be able to exclude are  one hundred four thousand dollars for the 2018 tax year, and one hundred five thousand and nine hundred dollars in 2019. This amount increases every year in line with inflation. To claim these exclusions, you need to show that you have been resident and earned money in countries outside the U.S.   What is Included and Excluded in Foreign Earned Income?   Here are some of the rules behind Foreign Earned Income Exclusion   It can only be applied to active income that you earn for performing a job, from wages or salary, or as money you paid yourself while self-employed. This can even apply to money paid to you by a US-based employer, providing you were outside of the country for a specific length of time. The exclusion does not apply to other types of income like retirement income, investment income, real estate income, social security benefits, and others. Certain other types of income don’t apply including income earned as employee of the U.S. government, or payments received after the end of the tax year.   Now a few warnings You may still have to file an income tax return. In order to claim the foreign income exclusion you have to file. If you have not filed, you may a very large penalty exposure on your hands as many foreign informational returns must be completely along with the tax return. Penalties can be automatically assessed - at $10,000 per year. We have seen the IRS begin doing this the last three years. Additionally, FBAR penalties may be an entirely separate but difficult issue. If you think you might have a problem, follow the link to irsmedic for expert advice. Your income is excluded from US tax- But chances are you are paying high taxes to the country in which you are living or working. So it’s like like you are getting away with not paying taxes. Now, Foreign tax credits work entirely differently. Additionally, to qualify for the Foreign In come exclusion, you need to satisfy something called the bona fide residence test to claim the foreign income exclusion. Be sure to subscribe to our channel as we will be coving both topics - foreign tax credits and the bona fide residence test in future videos. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269 - 6699 info@irsmedic.com https://youtu.be/-CiJ4394Ab0 IRS Medic

*** SPECIAL FATCA UPDATE *** Are Americans just IRS penalties waiting to happen?

*** SPECIAL FATCA UPDATE *** Are Americans just IRS penalties waiting to happen?

For immediate help with an international tax/FBAR/FATCA problem click to: https://ift.tt/1RfwK1f Joining international tax attorney Anthony E. Parent is John Richardson of citizenshipsolutions.ca and Keith Redmond of American Expatriates 2.0 - find him at https://ift.tt/2algxeE The three discuss the Canadian Foreign Account Tax Compliance Act (FATCA) litigation and what it means along with the next steps toward the Supreme Court of Canada, and the remarkable ease at which Canada seems perfectly fine surrendering its sovereignty to the whims of the IRS. Someone the Canadian Charter of Rights and Freedoms protects the Canadian government more than its people of Canada. Keith Redmond discussed the FATCA litigation in France on behalf of Accidental Americans. There two the French courts denied any real releif, but the upside is the case will be head by the EU courts - meaning that if succesful the ruling could benefit all Americans in Europe from the FATCA disaster. The three also discuss the merits of getting a social security number while simultaneously claiming one is not subject to US taxation. The three conclude by dismissing the internetexperts who claim there is a one-size solution for all. Attorney Parent discusses the situations in whcih a US person REALLY should comply and enter into a streamlined disclosure program, as opposed to gambling and hoping the IRS never catches up. More updates to come so be sure to subscribe. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269 6699 info@irsmedic.com https://youtu.be/qgrkX768GDE IRS Medic

FBAR filing requirements for children and dependents

FBAR filing requirements for children and dependents

https://ift.tt/33hI1Ls Do you need to file and FBAR FinCEN/Form 114 for you child? The report of Foreign Bank accounts, also known as the FBAR was a tool invented by congress in 1970 to make it difficult for criminal masterminds around the world to use the international banking system to facilitate their criminal mastermind plans. And because of that, any US person regardless of age or mental abilities must file an FBAR should their foreign bank accounts exceed $10,000 in the aggregate. Again, believe it or not this requirement extends to someone who is disabled or is a child - even a baby. Hi this is Anthony Parent of IRSMedic and in this video I will be talking about FBAR reporting obligations for dependents and what happens when a mistake is made. FBAR penalties The FBAR is form every US person is required to file or could face horrific penalties —starting at $10,000 and going up to 50% of account value. The reason why the penalties are so horrific is that the law was designed to dismantle the most violent, thuggish criminal syndicates. Now as as it turns out, FBAR penalties haven’t been assessed so much against terrorists and human and drug traffickers, but rather every day people who didn’t know they had to report a foreign pension on an FBAR form. What is an United States “person” The law imposes FBAR requirements against any “United States person” which is defined as United States citizens - including minor children -; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability entities. Every child is responsible for filing an FBAR Further the law states a child is responsible for filing his or her own FBAR report.  If a child cannot file his or her own FBAR for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign his or her FBAR, a parent or guardian must electronically sign the child's FBAR. So Would the IRS penalize a child for not filing FBAR? Absolutely. There exists a myth that because IRS employees are human they will act humanely. No doubt, many of them are conflicted about their job. But the fact is the humanity has been forced out of them because the job requires it. We have seen IRS employees attempt to assess FBAR penalties in woefully inappropriate settings - again and again. What if you made a mistake FBAR mistakes are incredibly common. And consider this, we have IRS employees as clients who messed up their FBARs. If you made a mistake there are often cost effective ways to deal with it, but you need to be careful. Trying to figure out this on your own could lead to a really bad result - we’ve seen people make a bigger messes trying to straighten things out on their own or by getting bad advice. Follow the link to IRSMedic for expert help with you or your child’s FBAR. If you have questions please leave them in the comments blow. If you found this video helpful please like and share it with your friends. Be sure to subscribe to stay on top of international tax topics you probably wish you didn’t need to. This is Anthony Parent of IRSMedic and thanks for watching. https://youtu.be/paK6rgc08dU IRS Medic

Understanding the IRS collection process -the most common questions answered

Understanding the IRS collection process -the most common questions answered

https://ift.tt/1RfwK1f The IRS is the world’s most powerful, complicated collection agency in the world. So when you have an unpaid tax problem, it’s hard to get answers that can actually help you. Hi, I’m Anthony Parent, tax attorney and founder of IRSMedic. In this video I will answer some of the most common questions people ask about the IRS collection process. Will the IRS call me? If you are expecting a call back yes. But if not, don’t expect anyone to call you. One reason is that if a revenue officer is assigned to your case, you will be contacted in person. One exception is the private IRS debt collectors - they do call unannounced. The problem is there’s many people posing as the IRS, claiming they will arrest you is you don’t pay them immediately. The IRS doesn’t work like that, although it may feel as they can. Will the IRS waive penalties and late fees? It depends. Some penalties can be waived as a matter of right with the First Time Penalty Abatement procedures. Others can be waived if the IRS believes there was a good reason. But you have to ask for it properly. Will the IRS forgive tax debt or settle for less? Yes. The IRS understands you can’t get blood from a stone and will work with taxpayers to get something rather than nothing. Also, there are special hardship programs. Additionally, for taxpayers who do file their tax returns, Chapter 7 bankruptcy can sometimes completely eliminate the tax debt. Look bankruptcy is not a lot of fun, and unfortunately, that bankruptcy will show up on your credit report - so we like to work directly with the IRS, often with an offer in compromise to settle back taxes for our clients. An offer in compromise is something that does not show up on a credit report. Additionally, if a tax lien was filed, the lien will be removed once the terms of the offer in compromise are fulfilled. That’s pretty nice. Will the IRS fix errors? Sometimes. But it can be incredibly difficult to get the IRS to follow their own rules. This is a reason why regular normal people who’ve never had to hire a tax firm or tax attorney before often find themselves in terrible need. The IRS rules are so complicated, the IRS has a difficult time following them themselves. And consider, we even have IRS employees as clients. So what does that tell you? Will the IRS take my house? My car? My business? Maybe. But honestly, it is something that can be avoided. I get it, the IRS is something most of us don’t want to deal with. It can take some real courage to face facts. But you will really likely be able to find a solution you can live with. Taxpayers who take steps to make it hard for the IRS to collect from them by hiding assets, transferring to a friend, often get the worst treatment - including criminal charges. So don’t do that. The IRS is not fun, but it can be managed. And it can get a lot easier if you’re able to hire a tax firm that you like. Will the IRS take my refund? Often the IRS will intercept a federal or state refund for back tax payments. It is possible to get the money back if you can prove you don’t owe it, however time limitations apply so it’s best to act quickly. Will the IRS take payments? Yes. The key is to make sure you don’t sign up for something you can’t afford. Just don’t agree to anything to get the IRS off your back. Getting a professional opinion about what you can and should repay is key and really might be money well spent. Can the IRS arrest you or put you in jail? If someone calls claiming they are from the IRS and that that they are going to arrest you, that is likely a scam. If special agents with gold badges show up at your house to arrest you, that is probably real. Can the IRS seize my 401k? Yes. No court order is required to do so Can the IRS garnish my wages? Yes. No court order is required to do so. Can the IRS freeze a bank account? Yes. No court order is required. Are you starting to see how powerful the IRS is? Can the IRS take inheritance for back taxes? Yes. That is why it is important to settle with the IRS before you come into money. The best time to negotiate with the IRS is when things are the worst for you financially. Don’t wait until you are back on your feet to make a deal, as your deal may be less than optimal. What other questions do you have about the IRS collection process? Please leave them in the comments below. Be sure to subscribe to our channel to stay on top of IRS news you probably wish you didn’t have to. And if you are looking for a firm to help you, follow the link to irsmedic.com This in Anthony Parent of IRSMedic, thanks for watching. https://youtu.be/L75TuOBtT20 IRS Medic

July 2019 International Tax Update #FATCA #TFFAAA

July 2019 International Tax Update #FATCA #TFFAAA

Global Advocate for the American Overseas and Tax Attorney John Richardson join Anthony E. Parent to discuss the following important updates for any US expat concerned about tax compliance, tax reform, The Foreign Account Tax Compliance Act (FATCA), and the proposed Tax Fairness for Americans Abroad Act (TFFAAA) In this video we discuss: 1. Overall status of the TFFAAA bill: The bill is intact. The plan it to reintroduce it, with a Democrat sponsor. The good news is mot Democrat organization that represent Americans overseas are no on board with the bill. 2. GILTI/transition tax/TTFI updates: Enhanced Section 911 exclusions - the TFFAAA does not end citizenship based taxation, however it does greatly limit it and that is a great start. 3. The US Treasury got creative to limit GILTI taxes so that there is essential no GILTI due if taxpayers lives in country where tax rate is above 18.1%. 4. Form 3520-AForm 3520: tapxayers are leanrign the perils of over filing. Attorneys Richardson and Parent discuss why overfiling is a real bad idea. 5. Litigation updates: We discuss the Accidental Americans in France and other litigation and pushback in Europe along with updates from Canada. For help withyour international tax problem contact https://ift.tt/1RfwK1f Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 https://youtu.be/AOyM_9gCaVw IRS Medic