The Internal Revenue Service reminds U.S. taxpayers living
abroad, as well as other international taxpayers, that IRS.gov
provides the best starting place for getting answers to their important tax
questions. This filing season, six new YouTube videos on common issues that
international taxpayers face are also available.
The International
Taxpayers page on IRS.gov is packed with information designed to help
taxpayers living abroad, resident aliens, nonresident aliens, residents of U.S.
territories and foreign students. The web site also features a directory
that includes overseas tax preparers.
“These resources provide critical information to assist
taxpayers with many different needs,” said IRS Commissioner John
Koskinen. “Tax issues can be even more challenging for international
taxpayers, and IRS.gov provides important details they need to understand their
obligations.”
International taxpayers will find the online IRS
Tax Map and the International
Tax Topic Index to be valuable sources of answers for their tax questions.
These online tools assemble or group IRS forms, publications and web pages by
subject and provide users with a single entry point to find tax information.
In 2015, the IRS also created videos to assist international
taxpayers with some of their most common questions. The videos cover the
following international taxpayer topics:
- Filing Requirements
- Foreign Earned Income Exclusion
- Individual Taxpayer Identification Number (ITIN)
- Filing Status if Married to a Nonresident Alien
- Foreign Tax Credit
- Introduction to the International Taxpayers Web Page
By law, Americans living abroad, as well as many non-U.S.
citizens, must file a U.S. income tax return. In addition, key tax benefits,
such as the foreign earned income exclusion, are only available to those who
file a U.S. return. These online resources and videos are designed to help
affected taxpayers understand how these rules apply to them.
Federal law requires U.S. citizens and resident aliens to
report worldwide income, including income from foreign trusts and foreign bank
and securities accounts. In most cases, affected taxpayers need to complete and
attach Schedule B to their tax return. Part III of Schedule
B asks about the existence of foreign accounts, such as bank and securities
accounts, and usually requires U.S. citizens to report the country in which
each account is located.
Taxpayers with an interest in, or signature or other
authority over, foreign financial accounts whose aggregate value exceeded
$10,000 at any time during 2015 must file with the Treasury Department a
Financial Crimes Enforcement Network (FinCEN) Form
114, Report of Foreign Bank and Financial Accounts (FBAR). It is due to the
Treasury Department by June 30, 2016, must be filed electronically and is only
available online through the BSA
E-Filing System website. For details regarding the FBAR requirements, see Report
of Foreign Bank and Financial Accounts (FBAR).
U.S. taxpayers with foreign accounts should also understand
their reporting
requirements under the Foreign Account Tax Compliance Act (FATCA).
Third-party information reporting from foreign financial institutions or
through intergovernmental agreements began in 2015.
In addition, under FATCA, certain U.S. taxpayers holding
financial assets outside the United States must report those assets to the IRS
on Form
8938, Statement of Specified Foreign Financial Assets. Generally,
U.S. citizens, resident aliens and certain non-resident aliens must report
specified foreign financial assets on this form if the aggregate value of those
assets exceeds certain thresholds. Reporting thresholds vary based on whether a
taxpayer files a joint income tax return or lives abroad. See the instructions
for Form 8938 for more information.
To help avoid delays with tax refunds, taxpayers living
abroad should visit the Helpful
Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad
page.
The IRS has also added two new international tax topics to
Tax Trails, the agency’s interactive online tool that helps taxpayers get
answers to their general tax questions. The two topics involve filing
requirements and filing
status of a U.S. citizen or resident alien married to a nonresident alien.
More information on the tax rules that apply to U.S.
citizens and resident aliens living abroad can be found in, Publication
54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, available on
IRS.gov.
