IRS Provides Relief for U.S. Expats Reports Bambridge Accountants New York

Press Release (ePRNews.com) - NEW YORK - May 11, 2020 - Recognizing the impact of Covid-19, the IRS has provided relief for U.S. expats claiming the foreign earned income exclusion report Bambridge Accountants New York.

–       The IRS and Department of Treasury have provided a waiver of the time requirements to claim the foreign earned income exclusion

–       If the U.S. citizen would have qualified for the foreign exclusion, but failed to do so as they were required to leave the foreign country on or after February 1, 2020, but on or before July 15, 2020

U.S. citizens and Green Card holders living overseas are still required to file U.S. tax returns each year reporting their worldwide income.

The foreign earned income exclusion allows U.S. expats living outside the U.S. to exclude up to $107,600 of foreign salaries, wages, bonuses and self-employed income each year. The income is still reported on the federal tax return and claiming the foreign earned income exclusion stops the U.S. tax on that income.

To qualify, U.S. expats need to have their tax home outside the U.S. and meet the bona fide residence test or the physical presence test.

The bona fide residence test requires that the U.S. citizen is a bona fide resident of a foreign country (or countries) for an entire tax year (January 1 to December 31).

For the physical presence test, the U.S. citizen needs to be physically present in a foreign country (or countries) for at least 330 full days during any period of 12 months in a row.

If due to coronavirus the U.S. citizen was required to leave the foreign country and their tax home is still outside the U.S. then the time requirements under the bona fide residence and physical presence tests may be waived.

The IRS has released full details in Revenue Procedure 2020-27

The foreign earned income exclusion is claimed using form 2555 – this is filed with the federal tax return (form 1040) due by July 15, 2020.

If the U.S. expat still has U.S. tax to pay on their foreign income, then they can also use foreign tax credits by filing form 1116 with their main tax return.

Contact Alistair Bambridge, alistair@bambridgeaccountants.com, +1 646 956 5566.

Bambridge Accountants New York is a New York-based firm specializing in U.S. expat tax, U.K expats, actors, other creatives in the U.S. and U.K.

www.bambridgeaccountants.com

Source : Bambridge Accountants New York Follow on Google News
Business Info :
Bambridge Accountants New York
442 Broadway
New York, NY 10013
CATEGORIES : Taxation and Tariffs
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