Who must file Tax Returns?

All US Citizens & GC holders must file tax returns annually if above minimum filing thresholds.

You must report your worldwide income. If spouse is not a GC holder/US citizen - you do not need to report their income.

Minimum Filing Thresholds
Filing Status	Age	Minimum Income Requirement
Single	Under 65 65 or older	$12,200 $13,850
Married Filing Separately	Any age	$5
Head of Household	Under 65 65 or older	$18,350 $20,000
Married Filing Jointly	Under 65 (both spouses) 65 or older (one spouse) 65 or older (both spouses)	$24,400 $25,700 $27,000
Qualifying Widow(er) with Dependent Children	Under 65 65 or older	$24,400 $25,700
Self-Employment	Any	$400

FBAR

'Foreign Bank Account Report' (FBAR) – aka FinCEN 114
Not a declaration of tax, but an informational return
Required if your aggregate non-US financial accounts total over $10K USD at any point during the year:
- Examples:
  Checking account, savings account, non-US brokerage account, non-US mutual fund, non-US life insurance with cash value
- If you have 3k each in 4 bank accounts, the aggregate value is $12k – you must file.
Very high penalties if not filed
- Maximum penalty for failure to file FBAR is either $100K or 50% of taxpayer assets – whichever is larger

Take all of your non-US checking, savings, investment, and pension accounts* & find the highest one day value for each & add them up. If the total is above $10k - you must file FBAR.

FATCA

FATCA - Foreign Account Tax Compliance Act
Informational report, but part of tax return - Form 8938
Required to file:
- Single - $200k at the end of the year, or $300k at any point during the year
- Married Filing Jointly - $400k at the end of the year, or $600k at any point during the year
Very high penalties if not filed
- $10k fine, and up to $50k if continued failure to file

Similar to FBAR, but higher thresholds, and submitted to the IRS as part of the tax return. For more info - see FBAR-8938 Comparison Table

W-9 - Bank Asks about US Tax Compliance Status

'FATCA Letter' - Bank asks you to certify tax compliance status by completing w-9 or w-8
- Part of FATCA compliance - if your bank believes you are 'US person', they must share your information with US tax authorities to remain compliant with regulators.
- Failure to respond in a timely manner may result in the bank closing your account.
If compliant, simply complete the form and send it back.
If delinquent - be aware that the bank will transmit your information to the IRS - it is recommended to get tax complaint ASAP.
- Streamlined Procedure recommended to get into compliance

Will I owe Tax?

Now the good news. If you are abroad, the first $100k of wages is tax free in the US
- Foreign Earned Income Exclusion (FEIE)
  - Physical presence test - spend at least 330 full calendar days during a period of 12 consecutive months outside the US
  - Bona-Fide Residency - Establish 'residency' in a foreign country. Requires full calendar year abroad to start.
  - Self-Employment qualifies for FEIE, but self employment tax requires additional exclusion. If filed properly - for Ireland - you are only liable for self-employment taxes to Ireland, not the US.
Foreign Tax Credit - income tax paid to another country will reduce or offset your US tax obligations
Foreign Housing Exclusion - exclude cost of rent and utilities from taxable earnings on top of the first $100K
- Each city has a different limit (i.e - Dublin is more expensive than Bucharest)

How Far Back Do I Need to File?

In 2014, the IRS introduced 'Streamlined Foreign Offshore Procedure' - Amnesty from Penalties
- 3 years tax returns, 6 years FBAR. Currently 2016-2018. All years in question must be 'delinquent'.
- No 'failure to file' penalties. No 'failure to pay tax' penalties.
- Most importantly - amnesty from FBAR penalties
- No 'deadline'“ but risk is that the IRS may change or discontinue this program

SITUATIONAL ANALYSIS

Jane (US Citizen) earns €50k (55k USD) as a teacher in Dublin. Jane also earns €10k as a private tutor.
Jane`s husband, Mike, an Irishman, also earns €50k (55k USD) as a paramedic.
They have a joint bank account at AIB which has €12k (13k USD)
Jane does not need to declare Mike`s income on her return.
Jane will not owe tax to the US, but she must file a return annually, and file FBAR annually.
Jane does not need to file FATCA (form 8938)

Other Tidbits

INHERITANCE/GIFTS

Not taxable.

However – if received from a Non-US person and over $100k USD , recipient must file form 3520. If US person, no filing requirement for the recipient

CAPITAL GAINS

Taxable in the year when they are realized. Tax rate depends on type and length of investment.

Use of proceeds does not impact the taxability of the sale.

INCLUSION OF FOREIGN SPOUSE?

You do not have to report your non-US spouse’s income on your tax return. There are situations where it may be more beneficial – but it is not required.

IRS DOCUMENT REQUIREMENT?

Non-US forms do not need to be sent to the IRS.

However, you should retain records in case of audit.

APRIL 15

Due date to file calendar year 2018 tax returns (if you live in the US)

Interest on tax due (if any) begins to accrue, even if you have an extension until June or October.

FBAR due Apr 15. Automatic extension granted until Oct 15.

JUNE 15

US expats receive an automatic extension to file their US taxes to June 15. As noted above – tax due, if any, must be paid by April 15. Last day to file an extension to delay filing until Oct 15.

OCT 15

Filing date for those who have processed an extension

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