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We will thoroughly and conscientiously study your personal situation, and tailor our advice to your specific needs.
The far-reaching U.S. tax code has world-wide tax implications for U.S. Citizens and Residents and all others doing business in the United States. With the popularity of the U.S. real estate market with foreign investors, more non-U.S. citizens are experiencing tax reporting requirements. Even aliens who have sold U.S. based assets are subject to U.S. taxation. We can assist with all personal tax issues such as foreign-earned income (Form 2555), foreign tax credits (Form 1116), sales of U.S. assets, responding to notices from the I.R.S., tax abatement, real estate reporting forms & Department of Treasury reporting requirements. Contact our office for more information.
Estimated Tax Calculations
The United States Tax Code is a pay-as-you-earn system. U.S. Taxes are due in four quarters as you earn the money. Don’t make the mistake of not making estimated payments. Your foreign-based employer is not required or able to make withholding deductions from your foreign-earned pay. For this reason, you may be subject to interest and penalties, not to mention a hefty tax bill at filing time. Additionally vexing is the fact that Singapore’s tax system is run in arrears, meaning that no taxes are deducted as you are compensated throughout the year. Instead, the taxes are paid in the subsequent year in the form of a tax clearance or upon your departure from Singapore. As this can require careful budgeting, we can run estimates for you and establish a payment schedule to help you mitigate the burden of next year’s tax liability. Contact our office for more information.
Expatriation of Green Card or U.S. Citizenship
The decision to renounce one’s U.S. citizenship or relinquish one’s green card can be difficult for some individuals. Additionally, the process to officially abandon one’s permanent residency status or U.S. passport can be long, complex, and costly, especially if it is not carefully planned. The process is two-fold as there is an immigration and a tax component that must be fully addressed in order to achieve tax expatriation. Our office has experience in working with basic and complex tax expatriations and can provide expert guidance and filing support in this area. In some complex high net worth situations our office may recommend an international tax and trust attorney to assist in the planning phases of your expatriation. Contact our office for more information.
On March 18, 2010, the final version of “FATCA” (Foreign Account Tax Compliance Act of 2009: Form 8938) became law as a part of the HIRE Act. Much of FATCA’s regulations are directed towards requiring foreign banks to disclose information to the U.S. authorities, but the impact on the American expatriate community (while arguably not FATCA’s intended targets) is significant. FATCA increases the penalties and extends the statute of limitations for those with underreported foreign passive income and imposes an additional reporting requirement of foreign financial assets. Those with such “specified foreign financial assets” must report, as part of the tax return, information on the accounts if the aggregate balance equals or exceeds a certain thresholds. Our professionals can guide you through your reporting requirements. Contact our office for more information.
Foreign Bank Account Reporting
FBAR stands for Foreign Bank Account Report. It must be filed by “U.S. persons” if the person has an interest in, or signatory authority over a foreign financial account, and the aggregate value of those accounts exceeds $10,000 at any time during the calendar year. An FBAR is authorized pursuant to Title 31 of the Bank Secrecy Act, which is not part of the Internal Revenue Code. The FBAR is due on June 30th. Since it is not filed under the Internal Revenue Code it must be RECEIVED by the IRS on or before June 30th. As a reminded, foreign pension accounts and provident funds also must be reported and to complicate matters, the rules are different than the rules for the FATCA reporting.
There are both civil and criminal penalties for failure to file. The criminal tax penalties can result in a fine of not more than $ 250,000, or five years in prison, or both. In addition to criminal penalties there are civil penalties – particularly a three tier system for these civil FBAR penalties. For willful violations occurring after October 22, 2004, the maximum civil penalty is the greater of $100,000, or 50 percent of the balance of the account at the time of the violation. Furthermore, for each year the FBAR is not filed the penalty can be imposed again. Therefore it is quite possible for the maximum FBAR penalty to be several times the balance in offshore accounts. Additionally, this form must now be filed electronically.
Contact our office to expertly guide you through this difficult reporting process to provide you with peace of mind.
Foreign and Domestic Real Estate Reporting
U.S. persons investing in Foreign Real Estate may enjoy the same benefits as domestic ownership, however, there are specialized rules that apply to depreciation and currency gains that can create unique reporting. Additionally, non-Americans investing in U.S. real estate may assume certain U.S. tax obligations. At a minimum, they will be creating a federal – and potentially a state – tax reporting obligation annually if the property is rented or upon the disposal by or death of the owner.
Depending on how you decide to structure your investment, it may be helpful if your professional is also familiar with Singaporean entity structures.
If you are not careful, the rental income from your real estate investment may be considered FDAP income and/or subject to FATCA withholding. FDAP stands for Fixed, Determinable, Annual, Periodic income which means that 30% of the rent is automatically withheld as tax. FATCA stands for the Foreign Account Tax Compliance Act and has a similar impact to FDAP in this situation.
AETS has the professional expertise to guide you in your reporting requirements. Contact our office for more information.
Foreign Entity Reporting
Thinking of Setting up Your Own Business in Singapore?
Know the tax implications before you start. It is so easy to set up your own Sole Proprietorship, Partnership, or Corporation in Singapore and a flood of companies are ready to collect your fees and start your dream, but before you sign on any dotted lines, you should consult with a U.S. tax expert to see what types of filing requirements and income reporting you will be subject to. As a general rule, you should avoid setting up a trust to “shelter” income distribution even if the company offering to assist you recommends it as an income-deferring tool. Proceed with caution and get the facts.
Failure to file the proper informational returns carries very stiff penalties. The HIRE Act significantly changed this playing field with a statutory override of the normal statute of limitations. The change is sweeping. The IRS not only has an indefinite period to examine and assess taxes on items relating to the missing Form 5471, they can now make any adjustments to the entire tax return with no expiration until the required Form 5471 is filed. This is akin to filing a 1040 with no signature. It simply isn’t really filed. Our professional staff can handle your corporate compliance. Please contact us to set up a consultation.
Reporting foreign based life insurance policies is a very complex area requiring your tax professional to review your policy carefully to comply with U.S. tax regulations. Our professional staff has experience in handling this type of analysis and reporting. Contact our office for more information.
The year you move into or out of a tax jurisdiction or between tax jurisdictions can create a daunting tax situation, one that your previous accountant may not be able to competently handle. New regulations require a tax preparer to withdraw from preparing a return if they are not competent to handle a situation. Run of the mill U.S.-based preparers are not familiar with the substantial presence test or physical presence test – two very different but important concepts.
Our tax professionals specialize in the reporting of foreign (non-U.S.) earned income and investments, as well as the reporting requirements of non-U.S. persons vis-a-vis U.S.-based holdings. Planning ahead is essential to remain fully complaint and to avoid stressful situations. Contact our office for a “first year” overseas analysis in order to set up your budget for withholdings. Additionally, if you are non-U.S. person contemplating moving to the U.S. or acquiring U.S. permanent resident status (aka “green card”) contact our office for an appointment to review your situation.
An IRS audit can be an intimidating and complex process. If you or your business face an IRS audit, you can count on our years of experience in dealing with tax matters and IRS audit procedures to ensure that you are properly represented when dealing with the IRS and other tax authorities. Contact our office for more information.
ITIN (Acceptance Agent)
Effective January 2013, the IRS implemented new procedures that affect the Individual Tax payer Identification Number (ITIN) application process. The IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for a SSN who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty needs an ITIN.
Other examples of individuals who need an ITIN include:
- A nonresident alien required to file a U.S. tax return
- A U.S. resident alien (based on days present in the United States) filing a U.S. tax return
- A dependent or spouse of a U.S. citizen/resident alien (with certain restrictions)
- A dependent or spouse of a nonresident alien visa holder
Our office is a Certified Acceptance Agent and can assist in obtaining an ITIN directly from the IRS. Contact our office for more information or to schedule an ITIN interview.
Offshore Voluntary Disclosure Reporting
Over the years, the IRS has offered a variety of programs for individuals with unreported foreign accounts and income. Our office professionals have extensive experience with the various disclosure programs- commonly referred to as OVDP- and have guided dozens of taxpayers through these complex programs to successful outcomes. Our office has a good working relationship with a variety of top international tax attorneys located around the globe and will provide a referral if necessary. We will also work with existing legal counsel under a Kovel letter if you have already started the process. If you believe you may have unreported foreign assets/accounts or income please contact our office for a stress-free consultation.
Singapore is a lower tax jurisdiction than the United States and returns must be filed for each working adult (no joint filings). While generally straightforward, there are some nuances to Singaporean tax reporting that can benefit individuals in the right circumstances. For example, Singapore taxes are paid in arrears, and Singaporean employers do not generally withhold. You must file your return online, but you will not be billed until 3-6 months later. This bill is called your Notice of Assessment (NOA) and it will be one year ahead of the U.S. tax reporting year. (For example YA14 relates to income earned in 2013).
As a one-stop tax office, we can provide assistance with your Singaporean tax reporting and ensure that you receive your full relief and any available foreign tax credits on your U.S. return. Contact our office for more information.
Through a new IRS program, some qualifying taxpayers may be able to come into compliance under a less onerous scheme than the full disclosure process (OVDP). There are two versions of streamlined reporting depending on the residency of the taxpayer (domestic or international). Regardless of the program, our office can offer professional assistance to review your facts and circumstances to see if you would qualify for this program and when necessary, coordinate with your tax lawyer to complete the filings to bring you into compliance. If you believe you may have unreported foreign assets/accounts or income please contact our office for a stress-free consultation.
U.S. Tax Preparation & Planning
Effective tax preparation and planning can help you to minimize your future tax liability. We can help you proactively manage both your personal and your business tax issues, including understanding how upcoming business opportunities impact your tax status and vice versa. Not all tax planning opportunities are readily apparent. By having us on your team, you are more likely to benefit from those opportunities. We understand how the latest federal, state and local tax legislation and other developments affect you and your business and we are constantly identifying new ways to reduce federal, state or local tax liabilities. Contact our office for more information.