Year-end Tax Tips for U.S. Taxpayers Living Abroad

With 2017 com­ing to a close, U.S. tax­pay­ers liv­ing abroad should make sure they are well-posi­tioned to ben­e­fit from cur­rent and pro­posed reg­u­la­to­ry changes, says Oakville-based U.S. tax attor­ney Alex Man­a­suev. “As we near year-end it’s good to con­nect with your U.S. tax advi­sor and eval­u­ate where you stand,” Man­a­suev, prin­ci­pal of U.S. Tax IQ, tells Advo​cateDai​ly​.com. “Stay on top of devel­op­ments to make sure that you don’t miss any­thing.” Man­a­suev and U.S. tax accoun­tant Bran­don Vucen, a fel­low U.S. Tax IQ prin­ci­pal, offer some tips and con­sid­er­a­tions for indi­vid­u­als and busi­ness­es sub­ject to Amer­i­can tax­es in light of recent reg­u­la­to­ry changes and pro­posed 2018 reforms. Key fil­ing dead­lines:

• Amer­i­can cit­i­zens or green card hold­ers liv­ing abroad who earn more than $10,400 (all dol­lars U.S.) a year must file a U.S. tax return (note that a low­er thresh­old applies for self-employed tax­pay­ers). Unlike most Amer­i­can tax­pay­ers who have an April 17, 2018, fil­ing dead­line, they can file by June 15 unless they have wage income sub­ject to with­hold­ing in the Unit­ed States. Peo­ple exempt from fil­ing a tax return may still have to file a Report of For­eign Bank and Finan­cial Accounts (FBAR) or oth­er for­eign report­ing form.

• The new dead­line for fil­ing FBAR reports is April 17, instead of the pre­vi­ous June 30 due date. There is an auto­mat­ic exten­sion to Oct. 15. Fail­ure to file a time­ly report could result in a min­i­mum penal­ty of $10,000 per for­eign finan­cial account that was not dis­closed.
• Cor­po­ra­tions are now required to file their income tax returns by April 17, which can be extend­ed to Octo­ber 15.
• Part­ner­ships and S cor­po­ra­tions, how­ev­er, should file by March 15, instead of the pre­vi­ous mid-April dead­line. How­ev­er, the due date can be extend­ed.

Key tax devel­op­ments:

• Under recent changes, U.S. domes­tic cor­po­ra­tions formed to hold, indi­rect­ly or direct­ly, spec­i­fied for­eign finan­cial assets that meet cer­tain thresh­olds must file Form 8938, (State­ment of Spec­i­fied For­eign Finan­cial Assets), also known as a FATCA form. Pre­vi­ous­ly, only indi­vid­u­als need­ed to file the form. Fail­ure to file on time could result in a $10,000 penal­ty.

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