Did you receive
income from a foreign source in 2015? Are you a U.S. citizen or resident who
worked abroad last year? If you answered ‘yes’ to either of those questions,
here are eight tips to keep in mind about foreign income:
1. Report
Worldwide Income. By law, U.S. citizens and residents must report
their worldwide income. This includes income from foreign trusts and foreign
bank and securities accounts.
2. File
Required Tax Forms. You may need to file Schedule
B, Interest and Ordinary Dividends, with your U.S. tax
return. You may also need to file Form
8938, Statement of Specified
Foreign Financial Assets. In some cases, you may need to file FinCEN Form 114,
Report of Foreign Bank and Financial Accounts. Visit IRS.gov for more
information.
3. Review
the Foreign Earned Income Exclusion. If you live and work
abroad, you may be able to claim the foreign
earned income exclusion. If you
qualify, you won’t pay tax on up to $100,800 of your wages and other foreign
earned income in 2015. See Form
2555, Foreign Earned Income, or Form
2555-EZ, Foreign Earned Income
Exclusion, for more details.
4. Don’t
Overlook Credits and Deductions. You may be able to take a tax
credit or a deduction for income taxes paid to a foreign country. These benefits can reduce
your taxes if both countries tax the same income.
5. Additional
Child Tax Credit. You cannot claim the additional child tax credit if
you file Form 2555, Foreign Earned Income, or 2555-EZ, Foreign Earned Income
Exclusion.
6. Use
IRS Free File. Almost everyone can prepare and e-file their federal
tax returns for free, using IRS Free File. If you make $62,000 or less, you can
use brand-name tax software. If you earn more, you can use Free File Fillable
Forms, an electronic version of IRS paper forms. Some Free File software
products and fillable forms also support foreign addresses. Free File is
available only through IRS.gov.
7. Tax
Filing Extension is Available. If you live outside the U.S. and
can’t file your tax return by the April 18 due date, you may qualify for an
automatic two-month extension until June 15. This extension also applies to
those serving in the U.S. military abroad. You will need to attach a statement
to your tax return explaining why you qualify for the extension.
8. Get
IRS Tax Help. Check the international
services site for the types of
help the IRS provides, including how to contact your local office
internationally. All IRS tax tools and products are available at IRS.gov.
For more on this
topic refer to Publication
54, Tax Guide for U.S. Citizens and Resident Aliens
Abroad. You can get all IRS tax products on IRS.gov/forms.
Each and every
taxpayer has a set of fundamental rights they should be aware of when dealing
with the IRS. These are your Taxpayer
Bill of Rights. Explore your
rights and our obligations to protect them on IRS.gov.
Additional IRS Resources:
- Taxation
of U.S. Resident Aliens
- Publication
514, Foreign Tax Credit for Individuals
- International Taxpayers
No comments:
Post a Comment