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Expat Taxes filing and offshore assets reporting requirements

03rd August 2009
By USIndiaTax in Taxes
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Income from Abroad is Taxable
If you are an American working and living outside your country, then there are few things you should know about Expat taxes.

Many United States Expats and resident aliens receive income from foreign sources. If you are a U.S. Expat or resident alien, you must report income from all sources within and outside of the U.S. This is true whether or not you receive a Form W-2 Wage and Tax Statement, a Form 1099 (Information Return) or the foreign equivalents. Consequently, the Expat should report their worldwide income on their U.S. tax return.

Additionally, if you are a U.S. Expat or resident alien, the rules for filing income, estate and gift tax returns and for paying estimated tax are generally the same whether you are living in the U.S. or abroad.

Hiding Income Offshore
Not reporting income from foreign sources may be a crime. IRS wants to ensure that U.S. Expats and residents are accurately reporting their income and paying the correct tax.

In addition to reporting your worldwide income, Expats also need to report on their U.S. tax return whether you have any foreign bank or investment accounts. The Bank Secrecy Act requires you to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if:
• You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and
• The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
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