Blog   /   Americans Living Abroad

June 6, 2017 - Phil Hodgen

Canadian Treaty Relief from Double Taxation

Covered expatriates risk being taxed twice: once by the United States on assets they own when when they expatriate, and a second time by their home country when they sell assets or take pension distributions.

The double taxation problem has been largely solved for expatriates who live in Canada, but not (as far as I know) for other residents of countries.

What’s a Double Taxation Problem?

Let’s talk first about what a double-taxation problem is. It occurs because two countries want to tax you, and neither country cares that the other country taxed you.

Two Countries Claim You

If you are a taxpayer in two different countries, both countries will impose their domestic tax laws on you, and insist on the right to force you to pay tax on your income.... continue reading

April 27, 2017 - Phil Hodgen

Redfield v. Commissioner (U.S. Tax Court Memorandum Opinion, 26 April 2017)

This Tax Court Memorandum opinion is currently only available on (extremely overpriced and God-awful UI) Lexis via Tax Notes Today. (How do you take something terrible and make it worse? Lexis Advance is your answer).

I do not see the opinion anywhere on the Tax Court’s website. In order to make it available to everyone, I am posting it here.

The opinion demonstrates the procedural aspects for filing a late Form 2555.

---

DAMON AARON REDFIELD,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
RespondentUNITED STATES TAX COURTFiled April 26, 2017

Damon Aaron Redfield, pro se.

Jeffrey E. Gold and Stephen C.... continue reading

February 6, 2017 - Phil Hodgen

Filing Deadlines for FBARs and Income Tax Returns

We finally have sane filing deadlines for income tax returns and FBARs (FinCen Form 114). But there is still a trap for the unwary.

Income Tax Return Deadline for Tax Returns: April 15

Humans file income tax returns by April 15 .1

Income Tax Return Extended Filing Deadlines

Humans can get extensions of time to file their income tax returns:

• June 15. This is an automatic extension, no paperwork required. It is available for American citizens or green card holders whose tax homes are outside the United States.2
• October 15. This deadline is yours if you ask for it.

... continue reading

January 6, 2017 - Phil Hodgen

Digital Nomads and Eliminating Social Security Tax

American Digital Nomads With U.S. Corporations

This article is for entrepreneurs who, for valid reasons, need to have a U.S. corporation to operate their businesses. Maybe the customers are in the United States. Maybe there is an office full of employees in the United States. Maybe banking and financial transactions are simpler when there is a U.S. corporation.1

The entrepreneur, however, decides to live abroad. Let’s use the phrase “digital nomad” (the current favorite appellation). This person is going to travel from place to place, working for the U.S. business, but staying below the radar in the various foreign countries.... continue reading

December 23, 2016 - Phil Hodgen

The Green Card Holder’s Gift Tax Loophole

Green card holders living abroad can have a weird hybrid (tax) life. They are U.S. residents for income tax, but can be U.S. nonresidents for gift tax purposes.1

This is a useful tax planning tool. We use it for people who wish to abandon green card status because they no longer wish to live in the United States. By making large gifts, they can avoid covered expatriate status for purpose of the exit tax. But any green card holder who is permanently settled abroad can use this to solve cross-border tax problems.

Definitely a U.S. Resident for Income Tax

A person holding a permanent resident visa (aka the green card) is a “resident alien” for income tax purposes.... continue reading