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Zaher Fallahi, Tax Attorney and CPA; Taxation of US Citizens and Green Card Holders Living Overseas

posted Mar 2, 2015, 10:20 PM by Zaher Fallahi

If you are a U.S. citizen or US green card holder, the tax law regarding filing income tax return, estate tax return, gift tax return and making your estimated taxes are generally the same regardless of where on the planet you reside. And you are taxed at your worldwide income.

 

When to File Your Returns

You are allowed an extra  two-month (June 15 instead of April 15) time to file your tax returns if you are a U.S. citizen or US green card holder and living abroad, or are overseas in the military on duty, on the regular due date of your return.  Penalties for paying any tax late are assessed from June 15. However, even if you are allowed an extension, you will have to pay interest on any tax not paid by April 15th. If you qualify for the two-month automatic extension and cannot file the returns for June 15, you can fill out the form 4868 before the June 15th deadline, which gives you through October 15th to file your tax returns. 

 

Where to File

Generally, U.S. citizens or US Green Card Holders living abroad, mail their tax return to:

Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, USA

 

Estimated tax payments should be mailed with form 1040-ES to:

Internal Revenue Service, P.O. Box 1300, Charlotte, NC 28201-1300, USA

 

Taxpayer Identification Number

Each taxpayer who files or is claimed as a dependent on a U.S. tax return needs a social security number (SSN) or individual taxpayer identification number (ITIN). Use the form SS-5 to obtain a SSN, and file W-7 along with appropriate documentation to obtain ITIN.

Exchange Rates

You must express the amounts you report on your U.S. tax return in U.S. dollars. If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U.S. dollars. Taxpayers generally use the yearly average exchange rate to report foreign-earned income that was received regularly throughout the year. However, if you had foreign transactions on specific days, you may also use the exchange rates for those days. Yearly average exchange rates for some countries can be found at Yearly Average Currency Exchange Rates.

 

Foreign Earned Income Exclusion

US citizens or green card holders, who meet certain requirements, may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction.  If you are a U.S. citizen or a US green card holder and live overseas, you are taxed on your global income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.  You may also be entitled to exclude the value of lodging and meals provided to you by your employer. For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, foreign earned income does not include any amounts paid by the US or any of its agencies to its employees.  This may not include if you work for a US employer overseas.  

 

How to Get Tax Help

The IRS Office in Philadelphia provides international tax assistance. This office is open Monday through Friday from 6:00 a.m. to 11:00 p.m. EST and can be contacted by: Phone: 1 (267) 941-1000 (not toll-free) FAX: 1 (267) 941-1055 Email: Email the IRS (e-mail is for general tax questions; NOT questions regarding your tax account), Mail: Internal Revenue Service, Philadelphia, Pa 19255-0725

 

Overseas

The IRS has customer service personnel available to provide tax assistance in the following Embassies and Consulates abroad:

U.S. Consulate, Internal Revenue Service, Frankfurt, Giessener Str., 30, 60435 Frankfurt am Main, Germany

Walk-in assistance by appointment only, Tuesdays 9:00 a.m.-12:30 p.m., all (49) (69) 7535-3811 to request an appointment. Phone Service, Tel: [49] (69) 7535-3823, 9:00 a.m.-12:30 p.m. and 1:30 p.m.-3:30 p.m.

U.S. Embassy, Internal Revenue Service, London, 24/31 Grosvenor Square, London W1K 6AH, England. Walk-in assistance, Tuesday through Thursday, 9:00 a.m. - 1:00 p.m. and 2:00 p.m. - 4:00 p.m.  Phone Service, Tel: [44] (207) 894-0477, Monday 9 a.m. to 4 p.m., Tuesday through Thursday 9 a.m. to 12:00 noon. Fax: [44] (207) 495-4224

 

U.S. Embassy, Internal Revenue Service, 2 Avenue Gabriel, 75382 Paris Cedex 08, France. Walk-in assistance, Monday through Friday, 9:00 a.m.- 12:00 noon.  Phone Service, Tel. [33] (1) 4312-2555, Monday - Friday 9:00 a.m. - 12:00 noon and 1:30 p.m. - 3:30 p.m., Fax: +33-1-4312-2303, Email: irs.paris@irs.gov

U.S. Embassy, Beijing, NOTE: The IRS office in Beijing, China, closed on November 30, 2014. Refer to "How to Get Tax Help" above for assistance. 

Zaher Fallahi, Tax CPA , assists clients including Americans living abroad with  tax preparation, tax planning, IRS representation, disclosing undeclared foreign bank accounts (offshore voluntary disclosure program, OVDP), report of foreign bank & financial accounts (FBAR, Foreign Account Tax Compliance Act (FATCA), Telephones:  (310) 719-1040 (Los Angeles), ( 714) 546-4272 (Orange County) or e-mail:  taxattorney@zfcpa.com

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