Filing Due Dates:
Overseas tax filers have an automatic extension until June 15th for individual income tax returns and it’s possible to extend the deadline to October 15th if necessary. However, if tax is due it must be paid by April 15th in order to avoid interest charges. It’s also possible to make a prepayment by April 15th and file the tax return later. In some cases it may also be possible to receive a filing extension until December 15th.
The Report of Foreign Bank and Financial Accounts (FBAR) must be e-filed by June 30th and no extension is available. There can be severe penalties assessed for late filing so it’s very important that this form is filed on time.
Who must file a U.S. tax return?
American citizens and green card holders are taxed on their worldwide income, regardless of where they live or where their income is derived. Whether or not an American taxpayer actually needs to file depends on their level of income and filing status, such as single, married filing jointly, head of household and etc. For tax year 201, the income threshold is $3,950 if you are Married Filing Separately, $10,150 for a Single filer, $13,050 for a taxpayer who files as Head of Household and increases to $20,300 for Married Filing Jointly. These amounts also increase for taxpayers who are 65 or older.
What is the Report of Foreign Bank Accounts (FBAR)?
Americans and green card holders who have foreign (non-U.S.) bank or financial accounts with an aggregate value of $10,000 or more at any time during the year must file an FBAR to declare their ownership over the accounts. Generally, all bank accounts, securities accounts and 3rd Pillar accounts must be declared. These accounts must be declared even if you own them jointly or only have signatory authority over them. The rules are complex and penalties for non-compliance are severe, beginning at $10,000 per year.
What if my income level is less than the Foreign Earned Income Exclusion?
Even if your income from employment is below the exclusion amount of $99,200 for 2014, you must still file a tax return if your total earnings are greater than the income thresholds above. It is also important to keep in mind that the exclusion applies only to earned income. This means that income from pensions and social security, for example, does not qualify for the exclusion.
ARE THERE ANY REPERCUSSIONS IF I DON’T FILE TAX RETURNS?
One of the conditions of your visa is to follow U.S. laws. Payment of U.S. income tax due is required by law. If you owe taxes and don’t file, the IRS can assess penalty and interest. There may also be immigration consequences if you fail to file taxes; applicants for permanent residency (green cards) are often asked to show proof of tax filing for their previous years in the U.S.
IF I WORKED IN THE U.S. IN 2014 BUT HAVE SINCE RETURNED TO MY HOME COUNTRY, DO I STILL HAVE TO FILE TAXES IN THE UNITED STATES?
Yes, all individuals who were present in the United States in 2015 must file a tax return for that year.
WHAT IS A FORM W-2? I LOST OR NEVER GOT MY W-2. CAN I GET ANOTHER ONE?
A Form W-2 is used to report U.S. federal or state wages and taxes. You will receive a Form W-2 only if you received compensation during 2015 from your employer.
IF I DON’T HAVE A SOCIAL SECURITY NUMBER (SSN) OR INDIVIDUAL TAX IDENTIFICATION NUMBER (ITIN), HOW DO I FILE MY TAX FORMS?
Social Security Number (SSN) – Social Security Numbers are only available to people who are legally employed in the U.S. If you are currently employed, you must have a social security number. If you do not have one, you should apply for one immediately. You must have a Social Security Number before you can file your tax forms.
IF I DON’T HAVE AN INDIVIDUAL TAX IDENTIFICATION NUMBER (ITIN), HOW DO I FILE MY TAX FORMS?
Individual Taxpayer Identification Number (ITIN) – An ITIN is issued to individuals who don’t qualify for a Social Security Number because they are not employed but who need a number for tax-filing purposes. If you DO NOT have an individual taxpayer identification number (ITIN), then NW Tax Prep will create a Form W-7 Application for an IRS Individual Taxpayer Identification Number along with your other tax filing forms.
Who needs to apply for an Individual Taxpayer Identification Number (ITIN)?
- You need an ITIN if you are not eligible to get a social security number, but must provide a taxpayer identification number on a U.S. tax return. Examples include the following:
- A nonresident alien individual eligible to get the benefit of reduced withholding under an income tax treaty (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).
- A nonresident alien individual not eligible for an SSN, who is required to file a U.S. tax return or who is filing a U.S. tax return only to claim a refund.
- A nonresident alien individual not eligible for an SSN who elects to file a joint U.S. tax return with a spouse who is a U.S. citizen or resident alien.
- An alien spouse who is claimed as an exemption on a U.S. tax return, but who is not eligible to get an SSN.
- An alien individual who is eligible to be claimed as a dependent on a U.S. tax return, but who is not eligible to get an SSN. To determine if an alien individual is eligible to be claimed as a dependent on a U.S. tax return (see Publication 501,Exemptions, Standard Deduction, and Filing information, and Publication 519,S. Tax Guide for Aliens).
- An ITIN does not provide authorization to work in the United States or provide eligibility for Social Security benefits or the Earned Income Tax Credit.
When and how do I apply for an Individual Taxpayer Identification Number (ITIN)?
You need an ITIN as soon as you are ready to file your federal income tax return, since you need to attach the return to your application. To apply for an ITIN, complete Form W-7, Application for IRS Individual Taxpayer Identification Number.
I am a nonresident alien living in a foreign country and I will receive U.S. source royalty income. Do I need to obtain an ITIN?
U.S. source royalty income paid to a nonresident alien generally is subject to a 30% U.S. federal income tax. If you are claiming a reduced rate of U.S. federal income tax on U.S. source royalty income under a tax treaty, you should obtain an ITIN and provide it to the withholding agent on a Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. The Form W-8BEN is not filed with the IRS. Also, per the Exceptions Tables in the Instructions for Form W-7, specifically Exception 1(d), Third Party Withholding on Passive Income, individuals who are receiving royalty
distributions during the current tax year, and are required to provide an ITIN to the withholding agent for the purposes of tax withholding and/or reporting requirements, must submit a signed letter or document from the withholding agent verifying that an ITIN is required to make distributions during the current tax year that are subject to IRS information reporting or federal tax withholding. For a sample signed letter, see Sample Letter from Withholding Agent in Publication 1915, Understanding your IRS Individual Taxpayer Identification Number (ITIN).
I’m a U.S. citizen living and working outside of the United States for many Years. Do I still need to file a U.S. tax return?
Yes, if you are a U.S. citizen or resident alien living outside the United States, your worldwide income is subject to U.S. income tax reporting irrespective of where you reside. However, you may qualify for certain foreign earned income exclusions and/or foreign income tax credits. What this means for most employed people is that, while still required to file a tax return, in most cases there is no tax to pay to the U.S., due to the tax-exempt status of your foreign earning under the Foreign Earned Income Exclusion.
What is the due date of a U.S. income tax return?
The due date for filing a federal individual income tax return is generally April 15th of each year. Your return is considered filed timely if the envelope is properly addressed and postmarked no later than April 15th. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. If you cannot file by the due date of your return, you can request an extension of time to file. To receive an automatic six-month extension of time to file your return, please file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by the due date of your return However, if you are a U.S. citizen or resident alien who is either: 1) living outside of the United States and Puerto Rico and your main place of business or post of duty is outside of the United States and Puerto Rico; or 2) in military or naval services on duty outside of the United States and Puerto Rico on the due date of your return, you are allowed an automatic two-month extension until June 15th to file your return and pay any tax due. If you use this automatic two-month extension, you must attach a statement to your return explaining which of the two situations qualify you for the extension.
If my foreign earned income is below the foreign earned income exclusion Threshold amount, am I still required to file a U.S. individual income tax return?
Yes, since the foreign earned income exclusion is voluntary, you must file a tax return to claim the foreign earned income exclusion. It does not matter if your foreign earnings are below the foreign earned income exclusion threshold. There are specific requirements that you must satisfy to be eligible to claim the foreign earned income exclusion.
What Is My “U.S. Tax Status” and Why Is It Important?
“U.S. Tax Status” is used to determine which tax system applies to an individual – and thus, which tax returns are applicable and how that tax return must be completed. An individual’s U.S. tax status is different from one’s immigration status; however, many of the terms used for immigration issues are similar to those used for tax purposes. For U.S. tax purposes, there are four U.S. Tax Statuses: U.S. Citizen, Permanent Resident Alien, Resident Alien for Tax purposes, and Nonresident Alien for Tax purposes.
What is the Difference between a Resident Alien and a Nonresident Alien?
A Resident Alien for Tax purposes is treated in the same manner as a U.S. citizen when filing a tax return and paying taxes. A Nonresident Alien for Tax purposes has a completely different method of having tax withheld, completing tax forms and tax documents, and is eligible for very few and limited deductions and allowances when paying taxes. A Resident Alien for Tax purposes must report ALL income from ALL sources, regardless of whether from the U.S. or foreign payers, whereas, a Nonresident Alien for Tax purposes must only report and pay tax on money that he or she receives from U.S. sources.
How Long Will I Be a Nonresident Alien?
The time period for which you are a Nonresident Alien for Tax purposes depends on the results of what is called the “Substantial Presence Test.” In general, individuals present in the U.S. under an F, J, M, or Q STUDENT immigration status will be a Nonresident Alien for the first FIVE calendar years they are present in the U.S.; individuals present in the U.S. under a J or Q NON‐STUDENT immigration status will be a Nonresident Alien for the first TWO calendar years they are present in the U.S. There are many exceptions to the general rule so further questions must consider the facts and circumstances of the particular individual are current and past visits to the U.S.
I Didn’t Receive Any Money – Do I Have To File a Tax Return?
The requirement to file a federal tax return is based on receiving income from U.S. sources – not on receiving “money.” Income can include, but is not limited to: wages, salary, free housing, travel to/from a conference, scholarship, stipend, per diem, prize, award, gambling winnings – income does not have to be paid to you as a check or cash. Generally, if you did not receive any income from U.S. Sources, you are not required to file a U.S. tax return; however, if you are a Nonresident Alien who is present in the U.S. under an F, J, M or Q immigration status, you are required to file Form 8843, regardless of whether or not you have received any income.
My Friends All Filed Their Tax Returns “Online” – Why Can’t I Do That? When Is Form 1040NR or 1040NR‐EZ Due?
Individuals who are U.S. Citizens, Permanent Resident Aliens, or Resident Alien for Tax purposes are eligible to electronically file their tax returns; however, ALL Nonresident Aliens must print, sign and mail the tax return to the IRS. If your “friend” is a Nonresident Alien and he or she filed his or her tax return online, you should be a good friend and alert him or her that it sounds as if an incorrect tax return was filed. Filing an incorrect tax return is a very serious issue and will result in a penalty and possible elimination of all tax deductions, allowances and/or treaty exemptions.
Do I Have to File A Tax Return For My State?
Please remember that in the U.S., there are federal tax issues, state, tax issues, and local tax issues (in addition to many other types of tax such as FICA, sales, property, etc.). Whether or not you must file a STATE tax return will depend on the tax rules of the state in which you lived and/or worked. Also note that not all states have a tax return filing requirement. In the U.S., there are 50 states and the District of Columbia – only 43 of the states and District of Columbia have state tax filing requirements.
How Long Will It Take to Get My Refund?
If you request a tax refund via direct deposit, it generally takes approximately 6‐12 weeks to receive your tax refund. If you request a tax refund via a check, it generally takes approximately 12‐18 weeks to receive your tax refund.
What Should I Do If I Don’t Get My Tax Refund?
If you requested that you receive your tax refund via direct deposit, be sure to check your bank statement or online account to ensure that you have not in fact received the refund. If you do not receive your tax refund within six weeks of submitting your tax return, go to the IRS website section entitled “Where’s My Refund” (https://sa2.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp) to check the status of your tax refund. You will need to enter the following information from your tax return:
- SSN or ITIN
- Filing Status (Indicate “Single”)
- The amount of your tax refund (only the dollars, not the cents)
I Received a Letter from the IRS Saying That My Tax Return is Incorrect – What Should I Do?
The letter from the IRS will provide information about what is the issue that they believe to be incorrect. You should contact the us. We will review the IRS letter and compare the issue(s) identified in the letter with the tax return completed in New Wave Tax Consulting. In many cases, the IRS makes a mistake so do not presume that the IRS is correct we will assist you in getting the issue corrected.