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 AdvocateDaily.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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