Tax Services For Ex Pats & Dual Nationals

Tax Services For Ex Pats & Dual Nationals

Taxation of expats, dual nationals and green card holders (collectively, international persons), can be confusing, frustrating and costly — but it doesn’t have to be.At MillarLaw, we have been representing international clients for decades, including those holding EB-5 visas and those contemplating the EB-5 programs. When handling your tax issue, our first goal is to take the stress out of compliance.


“Every day, we see proposals in Congress, massive and minor legislative proposals, and they go nowhere or get implemented only in part,” said Sanford I. Millar, a commissioner on the Taxation Law Advisory Commission of the State Bar of California. “The big question is: Where is this one going to go?”

Millar said that multinationals will respond to Camp’s proposal with caution when deciding whether to move intellectual property overseas.

“The cost-benefit analysis is only slightly affected by reasons of potential changes,” he told Law360. “These are proposals that, in our view, have little opportunity to be implemented in the current session of Congress.”

— Sanford I. Millar, Law 360

What You Need To Know

The most important this to know is this: All U.S. expatriates have a legal duty to file U.S. tax returns reporting their worldwide income. However, some exclusions may apply. Read on for more important tips:

Income does NOT include money from rental properties, dividends or interest.

Exclusions: If you live abroad for a full calendar year, or for 330 days out of a 12-month period, you can exclude $91,500 from your U.S. tax return. If your spouse also lives abroad, you can exclude another $91,500 of your spouse’s income. However, you must file Form 1040 to take advantage of this exclusion. You can also deduct foreign housing expenses that exceed the standard amount.

Foreign Tax Credits: If you’ve paid foreign tax on earned income, you can offset those tax payments through the claiming of foreign tax credits. The effect these tax credits have on your U.S. tax liability depends on the tax rate of the foreign country you are residing in. Countries with higher tax rates may produce enough tax credits to completely offset your U.S. taxes, while countries with lower tax rates — or no taxes — may not have as great of an effect on your U.S. tax.

International Tax Treaties: The U.S. has tax treaties with more than 60 foreign countries. These treaties are beneficial to U.S. taxpayers and help reduce or eliminate the possibility of double taxation by the U.S. and a foreign nation.

Statute Of Limitations: If you live in a foreign country and file your U.S. tax return on time, the IRS can only audit you for three years. Once this three-year period ends, the IRA can no longer examine past returns. Even if you do not owe taxes, it may be in your interest to file a return to take advantage of this shortened statute of limitations.

Offshore Employees: If you work for a U.S. corporation abroad, your employer should withhold Social Security and Medicare taxes from your earnings. However, if the country you are living in has a Social Security Totalization Treaty with the U.S., you may elect to participate in that country’s social insurance program and not have U.S. Social Security and Medicare taxes withheld. If you are an employee of a foreign company, you do not have to pay U.S. Social Security tax.

Self-Employed Individuals: If you are self-employed, you must pay U.S. income tax, and your employer and employee share of U.S. Social Security and Medicare tax. You must also file a Schedule C with your tax return. Your deadline for filing is April 15; if you seek an extension you will still be charged interest and an underpayment penalty.

Get Tax Advice Now

If you are an expat or dual citizen, contact our firm. We will advise you of your tax rights and responsibilities and help you create a plan to mitigate your international tax liability. Call us today at 310-556-3007. Located in Los Angeles, California, we represent expats and dual citizens around the world.