Expat Tax Guides

Filing amended tax return

How do I correct my tax return with an amendment?

Published on January 13, 2025
by Clark Stott
Reviewed by: Aya Takriti

Clark Stott has been with Expat Tax Online since 2015. Being a dual national based in the UK, Clark has unique experience helping US citizens (and Accidental Americans) become tax compliant via the Streamlined Tax Amnesty program. Clark likes to help Americans in the UK keep their tax situations as simple as possible to avoid harsh IRS treatment.

What is an amended tax return, and when should I file one?

An amended tax return is a way to fix mistakes or make changes to a tax return you’ve already filed. You should file Form 1040-X if you realize you left something out, reported incorrect income, or need to update your filing status.

For example, you might have forgotten to include a tax credit or deduction that could lower the amount of taxes you owe.

To file an amended return, you’ll need to use IRS Form 1040-X, which is specifically designed for making corrections. This form lets you explain what you’re changing and include any extra documents that might be needed.

Can I file an amended return electronically, or does it need to be mailed?

In many cases, you can file an amended return electronically if you’re working with a tax professional that is e-File Authorized. This option is available if your original tax return was also filed electronically and it’s for one of the last three tax years. If your original return was mailed in, or if the tax year is older than three years, you’ll need to mail the amended return to the IRS.

If you’re e-filing, make sure the tax software you’re using supports amended returns. If mailing, double-check the address listed in the instructions for Form 1040-X to avoid delays.

What is the deadline for filing an amended tax return?

You generally have three years from the date you filed your original tax return to file an amendment. If you pay taxes later, you have two years from the date of payment—whichever gives you more time. For example, if you filed your taxes on April 15, 2022, you have until April 15, 2025, to file an amendment.

There are some exceptions to this rule, such as if you’re claiming certain tax benefits like a net operating loss. If you’re unsure about your specific situation, it’s a good idea to check with a tax professional or the IRS for guidance.

Why use the IRS Streamlined Tax Amnesty Program?

It’s for American citizens that didn’t know they had to file US tax returns each year, and have therefore fallen behind. Some more than 30 years! With the IRS Streamlined Procedure, say goodbye to overdue tax returns, late fees, and penalties.

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Embarking on an international journey shouldn’t mean navigating the complex world of US taxation alone. If you’re living and working abroad, our friendly, supportive Expat Tax Online Help Facebook group is here to assist. We’ve designed a community that serves as a comprehensive guide and resource platform tailored for US expats.

Join Now, Free Forever

How do I track the status of my amended return?

You can find out what’s happening with your amended return using the “Where’s My Amended Return?” tool on the IRS website. It shows updates for the current tax year and the three years before that.

To use it, you’ll need your Social Security number, date of birth, and ZIP code.

Processing an amended return usually takes about 16 weeks, but it can take longer during busy times or if the IRS needs more information from you.

What is the process of filing an amended return?

Gather your documents: Collect all necessary paperwork, such as W-2s, 1099 forms, and your original tax return. If you’re correcting deductions, have forms like Schedule A for itemized deductions or records of capital gains and losses ready.
Fill out Form 1040-X: This form is used to explain the changes to your tax return. For example, you might need to update your tax liability, add income, or include missed deductions. Attach any new or corrected documents.
Check state tax requirements: If your federal return changes affect your state taxes, you may also need to file an amended state return. Each state has its own rules, so check with your state’s tax office.
Submit your amended return: Depending on your circumstances, you can e-file or mail the 1040-X to the IRS. If mailing, make sure it goes to the correct address listed in the instructions.
Pay any taxes owed: If your amendment shows you owe more taxes, pay the amount as soon as possible to avoid penalties and interest. You can use IRS payment methods like direct pay or electronic funds transfer.
Seek professional help if needed: If your tax situation is complex or involves multiple years, a tax professional can ensure you file correctly.

Can I amend my return more than once?

Yes, you can make changes to a tax return more than once if needed. However, it’s better to try to get everything right in one amendment to avoid confusion.

Each time you amend a return, you need to complete a new Form 1040-X and include any necessary documents. This can slow down the process and increase the chance of mistakes.

Before you amend your return, carefully review both your original filing and the changes you plan to make. If you’re not sure about something, consider asking a tax professional for help.

Can I amend my return to claim missed credits or deductions?

Absolutely. If you forgot to claim tax credits or deductions, you can file an amended return to get them. Some common ones people miss include:

Earned Income Tax Credit (EITC): A credit for people with lower to moderate incomes.
Child Tax Credit (CTC): A credit for parents or guardians of qualifying children.
Education-related credits: Such as the American Opportunity Credit or Lifetime Learning Credit for college expenses.

Amending your return to claim these can reduce your tax bill or increase your refund. Just make sure to include any proof or documents the IRS might need.

How does amending a joint return affect both spouses?

If you’re fixing a tax return you filed jointly with your spouse, the changes apply to both of you. Both spouses need to sign the amended return to show they agree with the corrections.

If one spouse doesn’t agree with the changes, things can get tricky. In that case, it’s a good idea to get help from a tax professional to figure out the best steps to take and make sure you’re following IRS rules.

What happens if the IRS denies my amended return?

If the IRS denies your amended return, it’s often because of missing information, incomplete documents, or filing after the deadline. You’ll get a notice explaining the reason for the rejection.

To resolve this, provide the missing information or documents requested. If you believe the denial is a mistake, you can appeal the decision by following the instructions in the notice or contacting the IRS.

Can I amend my state tax return at the same time as my federal return?

Yes, you can.

If your federal amendment affects your state taxes, you’ll likely need to amend your state return too. Each state has its own process, so check with your state’s tax agency for the right form and instructions.

It’s a good idea to amend both returns around the same time to ensure everything matches and avoid discrepancies.

Can amending my return trigger an IRS audit?

Filing an amended return doesn’t automatically trigger an audit, but the IRS will review the changes. If your amendment significantly changes your income, deductions, or credits, it might get extra attention.

To reduce the risk of an audit, make sure your amended return is accurate, complete, and supported by proper documents. If you’re unsure, a tax professional can help.

How do I handle amending returns for multiple years at once?

If you need to amend returns for multiple years, you must file a separate Form 1040-X for each year. Clearly label each form with the tax year it applies to, and attach the necessary documents for that year.

When mailing multiple amended returns, send each one in a separate envelope to avoid confusion.

Spread the word. Please share… 👉

Filing a deceased person’s tax return

Published on January 10, 2025
by Sparsh Ganeriwala

Sparsh Ganeriwala, an IRS Enrolled Agent with over 12 years of expat tax experience, specializes in filing US taxes for Americans living in Canada, US/Foreign Trusts, and GILTI Tax.

Who is responsible for handling taxes after someone passes away?

When someone passes away, the person responsible is usually a court-appointed representative, executor, or someone officially named to handle the estate. If there isn’t an executor, a surviving spouse or a family member may take on this task.

The person responsible for filing must report all income the deceased earned before their death and make sure any taxes owed are paid. It’s a legal responsibility to handle these tax matters, and it ensures the estate is properly managed without penalties from the IRS.

What forms are required when filing for a deceased person?

You’ll need a few specific forms to file taxes for someone who has passed away:

Form 1040 (US Individual Income Tax Return): This is the regular tax return, but it reports income earned up until the date of death.
Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer): If the deceased is owed a refund, the person claiming it must complete this form.

Sometimes, an estate tax return is also needed:

Form 706 (United States Estate Tax Return): You only need this if the estate is very large—more than US$13,990,000 in 2025.

How is income reported after someone passes away?

When someone passes away, their income is split into two parts:

Income earned before their death: This includes paychecks, Social Security benefits, or retirement payments they received while alive. This information is reported on their final tax return, usually filed using Form 1040.
Income earned after their death: Any money earned by their property or investments (like rent from a house or interest from a bank account) is treated separately. This is reported on an Estate Income Tax Return (Form 1041) by the person handling the estate.

Why use the IRS Streamlined Tax Amnesty Program?

It’s for American citizens that didn’t know they had to file U.S. tax returns each year, and have therefore fallen behind. Some more than 30 years! With the IRS Streamlined Procedure, say goodbye to overdue tax returns, late fees, and penalties.

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

Are there tax benefits or exemptions for filing on behalf of a deceased person?

Yes, there are certain benefits:

Deductions and Credits: If the deceased had tax breaks like medical deductions or child tax credits, these can still be claimed on their final tax return.
Filing Jointly: If the deceased was married, the surviving spouse can file jointly for the year of their passing. Filing jointly can mean a bigger refund or paying less tax compared to filing separately.

What happens if taxes are owed or a refund is due?

If taxes are owed: The person managing the estate (executor or personal representative) must use estate funds to pay any unpaid taxes before the remaining money or assets are given to beneficiaries.
If a refund is due: The IRS requires the person claiming the refund to submit Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer). This might be a surviving spouse or the executor.

When are taxes for a deceased person due?

Taxes for someone who has passed away are due by April 15 of the year after their death. If the person died before the tax deadline for the previous year, taxes for that year are also due.

What filing status should you use?

The filing status for the final tax return depends on the person’s situation before they passed away.

Married Filing Jointly: If the person was married, their spouse can file a joint return for the year of death. This status often results in lower taxes and a larger standard deduction.
Qualifying Surviving Spouse: If the spouse has a dependent child and doesn’t remarry, they can use this status for two years after the year of death. It keeps the same benefits as filing jointly.
Married Filing Separately: If filing separately makes more sense, the surviving spouse can choose this option instead.
Head of Household: If the deceased was unmarried but had dependents, this status might apply, offering a higher deduction than filing as single.
Single: If the person was unmarried with no dependents, their return is filed as single.

In general, here are the forms you’ll need:

Form 1040 or 1040-SR for their final tax return.
Form 1310 to claim any refund owed.
Form 4868 if you need more time to file.

Can a deceased person’s medical expenses be deducted on their final return?

Yes, medical bills that were paid before the person passed away can often be written off on their final tax return. If the bills were paid after their death, they might need to be included on the estate tax return instead. It’s a good idea to check the IRS rules or talk to a tax professional for guidance.

Do I need a death certificate to file their tax return?

You usually don’t need a death certificate to file a tax return. However, you might need it if you’re claiming a refund or if the IRS asks for extra proof. If you’re managing the taxes for someone who has passed away, keep the death certificate handy just in case.

What happens if the deceased person owned a business?

If the person who passed away owned a business, the executor (the person managing the estate) will need to handle the business taxes. This includes filing any regular business tax returns, paying outstanding taxes, and possibly filing an Estate Tax Return (Form 706) if the estate is large.

The executor might also need to get a special tax ID called an Employer Identification Number (EIN) to manage the estate’s financial matters related to the business.

Does the IRS need to be notified of a person’s death directly?

You don’t need to tell the IRS about the death yourself. The Social Security Administration usually takes care of notifying the IRS. When filing the final tax return, the executor or representative includes the necessary forms, like Form 1310 if there’s a refund involved. This serves as the official notice to the IRS.

Other things to keep in mind

Executor’s Role: If an executor is named, they’re in charge of handling all tax matters.
Standard Deduction: The deduction depends on the filing status you select.
Deadlines: The final tax return is due on the usual tax deadline, April 15 of the following year.
Extensions: If more time is needed, the person filing the return can request an extension by submitting Form 4868 before the deadline. This provides an extra six months to file.

Spread the word. Please share… 👉

Is Retirement Income Taxable?

Retirement Income, Taxable?

Published on January 07, 2025
by Ma. Franchisca Conde

Franchisca, an IRS Enrolled Agent and CPA with 14 years of expat tax experience, specializes in US tax preparation, tax planning, and tax advice for US citizens and Green Card holders living and working abroad.

Is retirement income taxable?

Yes, retirement income is taxable in many cases, depending on the type of income and your total earnings.

Common sources of retirement income like Social Security benefits, pensions, IRA distributions, and 401(k) withdrawals are subject to federal income taxes, and in some cases, state taxes.

However, how much you owe depends on factors like your total income, filing status, and the tax treatment of your retirement accounts.

How does income impact Medicare Premiums in retirement?

Your income in retirement can affect how much you pay for Medicare premiums, specifically for Parts B (Medical Insurance) and D (Drug Coverage). If your modified adjusted gross income (MAGI) exceeds certain thresholds, you may have to pay an Income-Related Monthly Adjustment Amount (IRMAA), which is an additional charge on top of the standard premium.

For 2024, IRMAA starts applying if your MAGI is over US$97,000 for single filers or US$194,000 for married couples filing jointly.

How can I manage taxes in retirement?

Managing taxes in retirement means figuring out the best way to withdraw money from your accounts to keep your tax bill as low as possible.

Different types of retirement income are taxed in different ways. For example, money you take out of traditional IRAs and 401(k)s is fully taxed, while withdrawals from Roth IRAs are tax-free if you follow the rules.

Here are some tips to manage your taxes:

Spread Out Withdrawals: Try not to take out too much money in one year. This can help you stay in a lower tax bracket.
Plan Social Security Benefits: If you delay starting Social Security, it can reduce your taxable income now and give you bigger monthly checks later.
Be Smart About Investments: Some investments are better in taxable accounts, while others work better in retirement accounts.

If you’re unsure, a tax expert can help you figure out the best strategy for your specific situation.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

Are state taxes different for retirement income?

Yes, state taxes on retirement income can vary a lot depending on where you live. Some states, like Florida, Texas, and Nevada, don’t have state income taxes at all, which means your retirement income isn’t taxed at the state level.

Other states may tax your pension, Social Security, or withdrawals from retirement accounts, but some offer exemptions or discounts for retirees.

What should I know about tax withholding and estimated payments?

In retirement, you still need to pay taxes, but the way you handle them might be different. Some of your income, like Social Security, pensions, or withdrawals from retirement accounts, can have taxes automatically taken out.

This is called tax withholding, and it helps you avoid having a big tax bill at the end of the year.

If you’re earning money that isn’t automatically taxed—like income from investments or freelance work—you might need to send estimated tax payments to the IRS every three months.

These payments cover what you owe so you don’t get hit with penalties.

To make sure you’re paying the right amount, you can adjust tax withholding by filling out IRS Form W-4P for pensions or Form W-4V for Social Security.

Are social security benefits taxable?

Yes, Social Security benefits might be taxable, but it depends on how much income you have from other sources. The IRS looks at something called “provisional income,” which is the total of:

Half of your Social Security benefits
Other income like retirement account withdrawals, pensions, or investments

Here’s how it works:

If your total income is less than US$25,000 for singles or US$32,000 for couples, your benefits won’t be taxed.
If it’s US$25,000–$34,000 for singles or US$32,000–$44,000 for couples, up to 50% of your benefits can be taxed.
If it’s over US$34,000 for singles or US$44,000 for couples, up to 85% of your benefits could be taxed.

How are IRAs and 401(k)s taxed in retirement?

When you take money out of an IRA or 401(k) in retirement, you’ll usually have to pay taxes, but the rules depend on the type of account you have:

Traditional IRAs and 401(k)s: Withdrawals are taxed as regular income, just like a paycheck. For example, if you take out US$10,000, it’s added to your taxable income for the year. If you’re under 59½, there’s an extra 10% penalty unless you meet certain exceptions, like using the funds for qualifying medical expenses or education.
Roth IRAs and Roth 401(k)s: Withdrawals are typically tax-free as long as you’re at least 59½ and have had the account for at least five years. That’s because you already paid taxes on the money you put in.

What taxes apply to pension and annuity income?

Most of the income you get from pensions or annuities is taxable. If your employer paid into the plan, the entire amount you receive will be taxed as regular income.

If you put in your own after-tax money, part of your payments might not be taxed. The IRS has a formula to figure out how much of your payments are taxable versus tax-free.

Some states also tax pension and annuity income, so you might owe additional taxes depending on where you live.

To make things easier, you can set up tax withholding from your pension or annuity payments, similar to when taxes are taken out of your paycheck. This can help you avoid having to make extra payments or deal with penalties later.

Spread the word. Please share… 👉

Premium Tax Credit

What is the Premium Tax Credit?

Published on December 17, 2024
by Aya Takriti, EA

Aya Takriti, an IRS Enrolled Agent with 11 years of expat tax experience, specializes in US tax preparation, tax planning and tax advice for US citizens and Green Card holders living and working in the Middle East. Aya speaks fluent Arabic and English and the odd word of German and Spanish if you catch her on a good day.

Does the Premium Tax Credit help with health insurance costs?

Yes, it can.

The Premium Tax Credit (PTC) helps lower the cost of health insurance for people who buy their plan through the Health Insurance Marketplace. It works by reducing how much you pay for monthly premiums.

You can get this help upfront to immediately lower your insurance bill (called an Advance Premium Tax Credit, or APTC), or you can claim the credit when you file your taxes.

This program is aimed at making health insurance more affordable, especially for individuals and families with lower to middle incomes.

Who qualifies for the Premium Tax Credit?

To qualify for the Premium Tax Credit, you need to meet a few requirements:

Income:
- Your household income must be within a specific range, usually between 100% and 400% of the Federal Poverty Level (FPL) based on your family size. In states that expanded Medicaid, this may start above 138% of the FPL.
Health Insurance Plan:
- You must buy your health insurance through the Health Insurance Marketplace. If you have insurance through an employer or a private company, you won’t qualify.
Other Insurance Options:
- If your employer offers affordable insurance, you generally can’t use the Premium Tax Credit.
Tax Filing:
- If you’re married, you usually have to file a joint tax return to get the credit. There are a few exceptions, like for people in difficult situations such as domestic abuse.

How is the Premium Tax Credit calculated?

The amount of credit you get depends on your household income, family size, and the cost of insurance in your area.

Your Income: The PTC is based on how much money your household earns compared to the Federal Poverty Level (FPL).
Income Scale: The lower your income, the more financial help you’ll get. If your income is near the top limit (about 400% of the FPL), your credit will be smaller.
Plan Cost: The credit is linked to the price of a specific insurance plan in your area called the “benchmark plan.” If you pick a plan that costs more, you’ll pay the difference out of pocket.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

What happens if my income changes during the year?

If your income goes up or down during the year, it can change the amount of Premium Tax Credit you’re eligible for.

If Your Income Increases: You might owe money back to the IRS when you file your taxes, as the credit you received may have been too high.
If Your Income Decreases: You might qualify for a larger credit, which could result in a refund at tax time.

To avoid surprises, it’s important to let the Health Insurance Marketplace know if your income changes. This way, they can adjust your credit throughout the year to match your new income level.

Can I claim the Premium Tax Credit if I file jointly or separately?

If you’re married and file your taxes jointly with your spouse, you can qualify for the Premium Tax Credit (PTC) as long as you meet the income and other requirements.

But if you’re married and file your taxes separately, you typically won’t be able to claim this credit.

There is one exception. If you are in a situation involving domestic abuse or abandonment, the IRS allows you to file as “Married Filing Separately” and still claim the PTC.

However, if this applies to you, we recommend getting help from a tax expert to make sure you qualify.

What are the limitations of the Premium Tax Credit?

If you received more PTC than you were supposed to, you might need to pay some of it back when you file your taxes. The good news is there are limits on how much you have to repay based on your income.

Here’s an idea of what you might need to pay back:

If your income is below 200% of the federal poverty line: You’ll only pay back up to US$325 for individuals or US$650 for families.
If your income is between 200% and 300%: The limit increases to US$800 for individuals or US$1,600 for families.
If your income is above 400% of the poverty line: You have to repay the full amount of extra credit with no limit.

2024 Federal Poverty Guidelines for the 48 Contiguous States

Individual: US$15,060
Family of 2: US$20,440
Family of 3: US$25,820
Family of 4: US$31,200

For larger households, add US$5,380 for each additional person.

Examples:

Individual with Income at 250% of FPL: If you’re single with an income of about US$37,650 (250% of US$15,060), the most you’d repay is US$800.
Family of 3 with Income at 350% of FPL: A family of three earning around US$90,370 (350% of US$25,820) would repay the full excess credit, as their income exceeds 400% of the FPL.

Can I claim the Premium Tax Credit retroactively?

Yes, you can still claim the Premium Tax Credit (PTC) after the year ends if you didn’t apply for it when you got your health insurance through the Marketplace. This is done when you file your tax return for the year.

To claim it, you’ll need to include Form 8962, Premium Tax Credit with your return. Even if you didn’t get advance payments during the year, you can still claim the credit if you qualify.

Can a non-tax filer still benefit from the premium tax credit?

No, if you don’t file a federal tax return, you can’t qualify for the Premium Tax Credit. Filing a tax return is necessary, even if you don’t usually need to because your income is low.

This is because the IRS uses your tax return to confirm your eligibility for the credit. Without it, you won’t be able to claim the credit or keep any advance payments you may have received for your health insurance.

How do I report the Premium Tax Credit on my tax return?

To report the Premium Tax Credit on your tax return, you’ll need a document called Form 1095-A, which you get from the Health Insurance Marketplace. This form includes details like how much you paid for your insurance and any advance credit payments you received during the year.

With the information from Form 1095-A, you’ll fill out Form 8962, which calculates how much PTC you’re eligible for. If you received too much advance credit, you might have to pay back some of it.

If you didn’t get enough, you can claim the rest when filing your taxes. Once Form 8962 is completed, attach it to your regular tax return (Form 1040).

Make sure to enter everything correctly to avoid delays or issues with the IRS. It’s a good idea to double-check your work or get help if needed.

Spread the word. Please share… 👉

Tax Deadline 2024

What Is The Tax Deadline For 2024-2025?

Published on December 12, 2024
by Clark Stott

For the 2024 tax year (which covers income earned in 2024), the deadline to file your federal income tax return is Tuesday, April 15, 2025. This is the final date to submit your return or request an extension.

If you need additional time, filing an extension gives you until Wednesday, October 15, 2025, to file. However, keep in mind that any taxes owed must still be paid by April 15, 2025, to avoid penalties and interest charges.

Are there any changes to the tax deadline this year?

No, the standard filing deadline remains April 15, 2025. However, some groups may have different deadlines:

US Expats: If you live abroad, you get an automatic two-month extension to June 17, 2025 (since June 15 falls on a Sunday).
Disaster Relief Extensions: Those impacted by federally declared disasters may qualify for additional time to file and pay. The IRS provides updates on specific areas eligible for extensions.
State Filing Deadlines: Check with your state’s tax agency, as state deadlines don’t always match the federal deadline.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

What happens if I miss the tax deadline?

If you miss the deadline to file your taxes, the IRS will charge penalties and interest on any taxes you owe.

Late Filing Penalty

If you don’t file your tax return on time, the IRS charges a Failure-to-File Penalty. This is 5% of the unpaid taxes for each month (or part of a month) that you’re late, up to a maximum of 25% of the amount you owe.

For example:

If you owe US$1,000 and file two months late, your penalty would be US$100 (10%).

If you wait six months or longer, the penalty could max out at US$250 (25%).

Late Payment Penalty

If you file your return but don’t pay the taxes you owe by the deadline, the IRS adds a Failure-to-Pay Penalty. This is 0.5% of the unpaid taxes for each month (or part of a month) they remain unpaid, up to a maximum of 25%.

Daily Interest Charges

The IRS also charges interest on unpaid taxes, which starts building up the day after the tax deadline. The interest rate changes every three months and is based on the federal short-term rate plus 3%. This means the longer you wait, the more interest you’ll owe.

If you don’t file your return and don’t pay your taxes, the penalties can pile up fast. In the first month, the combined penalty is 5.5% of the unpaid taxes (5% for filing late and 0.5% for paying late). These charges grow each month until you’ve filed and paid what you owe.

If you missed the deadline, don’t wait. File your return and pay as much as you can as soon as possible. Even partial payments can reduce the penalty for late payments and limit the interest.

If you have a valid reason, like a personal emergency or financial hardship, you can ask the IRS to waive penalties.

Are there any tax credits and deductions I can use?

Yes, there are options to lower your taxes using credits and deductions for the 2025 tax filing season. These programs either reduce your tax bill or increase your refund if you qualify.

Tax Credits (Money Back or Reduced Tax):

Earned Income Tax Credit (EITC): Helps low- to moderate-income workers, especially parents with children. The exact amount depends on your income and the number of dependents.
Child Tax Credit (CTC): You can claim up to US$2,000 per qualifying child under 17.
American Opportunity Tax Credit (AOTC): Covers education expenses like tuition, offering up to US$2,500 per eligible student.
Premium Tax Credit (PTC): Helps cover health insurance costs if purchased through the Health Insurance Marketplace.

Tax Deductions (Reduce Income You’re Taxed On):

Standard Deduction: A fixed amount you can subtract from your taxable income. For 2025, the amounts are:
- US$15,000 for single filers.
- US$30,000 for married couples filing jointly.
- US$22,500 for heads of household.
Charitable Donations: If you itemize deductions, you can subtract contributions made to qualifying charities.
Student Loan Interest Deduction: You can deduct up to US$2,500 of student loan interest paid, if you meet the income requirements.

Special Benefits for Americans Abroad:

Foreign Earned Income Exclusion (FEIE): For 2025, you can exclude up to US$130,000 of foreign-earned income if you live and work abroad.
Foreign Tax Credit (FTC): Reduces your US taxes by the amount you paid to a foreign government, preventing double taxation.

These credits and deductions can significantly lower your tax bill, but they each have specific qualifications. Be sure to review the rules or consult with a tax expert to claim everything you’re eligible for!

How can I request an extension for my tax return?

If you need more time to file your taxes, you can ask for a six-month extension by submitting Form 4868, which is an application for more time to file.

You can do this online using IRS Free File or tax software.

It’s important to know that an extension gives you more time to send in your return, but not more time to pay your taxes.

Any taxes you owe still have to be paid by April 15, 2025. If you don’t pay by this date, you’ll face penalties and interest.

What if I live abroad—do I get more time to file?

If you live outside the US, you automatically get an extra two months to file your taxes, so your deadline becomes June 17, 2025. But remember, if you owe taxes, you still need to pay by April 15, 2025, to avoid penalties and interest.

If two months isn’t enough time, you can ask for a further extension by filing Form 4868, which pushes your filing deadline to October 15, 2025. For expats who qualify for the Foreign Earned Income Exclusion, you might also file Form 2350 to request even more time.

Can I file electronically up to the deadline?

Yes, you can file your tax return electronically up until the deadline.
The IRS e-file system is open until April 15, 2025, for the 2024 tax year.

Filing electronically is one of the fastest and most secure ways to submit your taxes. It also ensures quicker processing, especially if you’re expecting a refund.

If you’re requesting an extension, this can also be done electronically using Form 4868.

If you’re expecting a tax refund, filing electronically significantly speeds up the process. The IRS typically issues refunds within 21 days for e-filed returns, especially if you choose direct deposit for your refund. Paper-filed returns, on the other hand, can take 6-8 weeks or longer to process, delaying your refund.

E-filing systems also help you track the status of your refund through the IRS’s “Where’s My Refund?” tool. This provides updates on when your return is processed, approved, and when you can expect your refund.

IRS Free File

If your adjusted gross income (AGI) is US$73,000 or less, you can use the IRS Free File program. This service provides free tax preparation and filing through approved software providers. It’s ideal for individuals and families with simple tax situations who want to save on filing costs.

Streamlined Filing Compliance Procecdure

If you’re an American living abroad and haven’t filed your taxes in a while, you might qualify for the Streamlined Filing Compliance Procedures. This program lets you catch up on past tax returns without penalties, as long as you meet certain requirements. It’s especially helpful for expats who didn’t realize they needed to file US taxes.

Should I get a tax professional’s help?

Yes, getting help from a tax professional can make filing your taxes a lot easier, especially if your situation is complicated or you’re unsure about the rules. A good tax professional knows how to apply the tax laws, ensures your forms are filled out correctly, and helps you claim all the tax deductions and credits you qualify for.

This can help you avoid mistakes, penalties, or missing out on money you could get back.

Expats might need extra help since filing taxes is even more complicated. You might have to deal with rules like the Foreign Earned Income Exclusion (FEIE), claiming the Foreign Tax Credit (FTC) for taxes you paid in another country, or reporting foreign bank accounts using forms like the FBAR.

You can try to use tools if you’re not ready to hire a tax professional right away, like the IRS’s Tax Withholding Estimator or free online tax calculators. They can give you a rough idea of how much you might owe or get as a refund.

How do I find the right tax professional?

When you’re ready to hire someone, make sure they’re qualified. Here’s what to look for:

CPA (Certified Public Accountant): CPAs are trained to handle detailed and complex tax situations.
Enrolled Agent (EA): EAs are IRS-licensed tax experts who specialize in preparing tax returns.
Tax Attorney: If your taxes involve legal issues, a tax attorney may be a good choice.

To confirm their credentials, you can check the IRS’s Directory of Federal Tax Return Preparers. Always be cautious of anyone who promises big refunds or charges fees based on your refund amount—it’s a red flag.

What do I do about estimated quarterly taxes?

If you’re self-employed, an independent contractor, or earning income that doesn’t withhold taxes (such as from foreign sources), you may need to pay estimated quarterly taxes to the IRS. These are payments made four times a year to cover your federal income tax, Social Security, and Medicare obligations.

A tax professional can help you calculate how much you owe each quarter, ensuring you avoid penalties for underpayment. They can also guide you on adjusting these payments if your income changes throughout the year.

If you prefer doing your taxes yourself, the IRS website is a valuable resource. You can:

Download all necessary forms, like Form 2555 (for FEIE) or Form 1116 (for FTC).
Use the IRS Form 1040-es to calculate your tax liability.
Access step-by-step instructions for filing different forms.
Use online tools like the IRS Interactive Tax Assistant to answer basic questions.

Does the IRS offer help if I’m unable to pay my taxes on time?

Yes, the IRS provides options if you’re unable to pay your taxes by the deadline. You can set up a payment plan through the IRS, either as a short-term or long-term installment agreement, using Form 9465.

Another option is to request a temporary delay in payment if you’re experiencing financial hardship.

While these arrangements can help, keep in mind that interest and penalties may still apply until your balance is fully paid.

Are there separate deadlines for business owners or corporations?

Yes, business owners and corporations often have different tax deadlines than individuals. For example, C corporations typically need to file by April 15, 2025, for calendar-year businesses, while S corporations and partnerships must file by March 17, 2025.

If a business needs extra time, they can request an extension. For corporations, this can extend the deadline to October 15, 2025, for C corporations, or September 15, 2025, for S corporations and partnerships.

It’s important to keep these dates in mind and ensure all related forms, such as Forms 1120 or 1065, are submitted on time to avoid penalties.

How do I avoid getting scammed?:

Check the Tax Preparer’s Credentials
– Only work with qualified tax preparers who have a Preparer Tax Identification Number (PTIN). You can confirm their credentials using the IRS’s Directory of Federal Tax Return Preparers at irs.gov.
Watch Out for Big Promises
– Be cautious if someone promises you a large tax refund or encourages you to claim deductions or credits that don’t apply to you. These offers can be red flags for scams or fraud.
Protect Your Personal Information
– Keep your private details safe, like your Social Security Number, bank account information, and tax records. Only share these details with trusted professionals or secure platforms.
Use Secure Methods for Sharing Documents
– If you’re sending files online, make sure the system is secure and uses encryption to protect your data. Avoid using public Wi-Fi for anything related to your taxes.
Know How the IRS Communicates
– The IRS will never email, text, or contact you on social media to request personal or financial information. If you get a message claiming to be from the IRS, it’s probably a scam.
Report Scams
– If something doesn’t feel right, report it to the IRS. You can use the IRS Tax Fraud Reporting Form (Form 3949-A) or email phishing attempts to phishing@irs.gov. For other scams, you can call the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.

By staying alert and following these tips, you can avoid falling victim to tax scams. Trust your instincts—if something seems off, take action to protect yourself.

Spread the word. Please share… 👉

Form 8867

Published on November 26, 2024
by Clark Stott

When does my tax preparer have to include Form 8867 and does it protect me?

Form 8867, the IRS’s “Paid Preparer’s Due Diligence Checklist,” is a checklist that tax preparers use to make sure they have followed the necessary steps when helping clients claim certain tax credits.

Note: Tax preparers are professionals who assist in completing and filing tax returns, ensuring compliance with tax laws, while clients are the individuals or entities who seek these services to fulfill their tax obligations accurately.

This checklist is required by the IRS whenever a tax preparer is helping someone claim credits like the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), or the American Opportunity Tax Credit (AOTC). These credits can provide tax refunds that are larger than what a person has paid in, so the IRS requires extra verification to ensure the credits are being claimed properly.

Form 8867 basically shows that the preparer has reviewed the client’s eligibility thoroughly to avoid any errors or issues that might lead to an IRS audit.

For clients, this form is a safeguard to help avoid mistakes that could delay refunds or lead to penalties. For preparers, it’s a way to show due diligence, meaning they’ve followed the correct steps to ensure accuracy. If a tax preparer skips this form when required, they could face a penalty of $580 per missed form. This checklist helps both the taxpayer and the preparer feel confident that the return follows IRS rules for these valuable credits.

When is a tax preparer required to use Form 8867?

Tax preparers are required to use Form 8867 when a tax return includes claims for certain credits, specifically the EITC, CTC, ACTC, AOTC, or if the return uses the Head of Household status. This form includes steps for checking details like income levels, dependents’ eligibility, and residency.

For example, if a taxpayer is claiming the Child Tax Credit, the preparer would use the checklist to confirm that the dependent children meet the age and residency requirements.

If a tax preparer doesn’t file Form 8867 correctly, the penalty usually falls on the preparer, not on the client. The IRS may fine them because they are responsible for checking eligibility details.

However, if the IRS later finds that the client received credits they didn’t qualify for, the IRS can adjust the client’s tax return. In that case, the client may have to repay the credit amount, with added interest or penalties, even though they wouldn’t be penalized directly for the preparer’s failure to submit Form 8867.

So, while the penalty applies to the tax preparer, the client could still be affected if there’s an error in the credit claimed.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

How often do tax preparers need to submit Form 8867?

They need to complete and file Form 8867 once a year for each eligible tax return as a way to confirm they’ve done the required checks and asked the necessary questions for the client’s claimed credits.

What types of documentation should a tax preparer keep as proof of due diligence?

To show they’ve done their due diligence, tax preparers need to keep certain records. This includes Form 8867 itself, copies of any documents the client provided to prove their eligibility for credits—like income records, child residency proof, or school records (for education credits).

Preparers should also keep notes of any discussions or questions they asked to make sure the client was eligible for the credits. These records need to be kept for at least three years, in case the IRS ever requests proof that the preparer verified the credits correctly.

Can Form 8867 be filed electronically, or is a paper submission required?

Form 8867 can be either filed electronically or on paper, depending on how you’re filing the tax return itself. If a tax return is being e-filed, Form 8867 can be attached electronically and submitted directly to the IRS as part of that online filing.

Many people prefer e-filing since it’s faster and helps reduce errors. If a tax return is being filed on paper, then Form 8867 should be printed out and physically attached to the return before mailing it to the IRS.

Both e-filing and paper-filing ensure that tax preparers can meet IRS requirements for certain tax credits, like the Earned Income Tax Credit (EITC) or Child Tax Credit, by showing they’ve taken the necessary steps to verify eligibility. It’s also important for tax preparers to keep a record of Form 8867 along with related documents in case the IRS requests proof of due diligence. This record-keeping can be done electronically or in paper form, whatever is most convenient.

Are there any exceptions to the Form 8867 requirement?

Yes, there are situations where tax preparers don’t need to file Form 8867.

If a tax return doesn’t include any of the credits that require Form 8867—such as the Earned Income Tax Credit, Child Tax Credit, or American Opportunity Tax Credit—the form isn’t needed. Similarly, if a tax preparer only works on returns without these credits, they won’t have to use Form 8867 at all.

Spread the word. Please share… 👉

IRS Form 8919

Published on November 20, 2024
by Aya Takriti, EA

My employer misclassified me as an independent contractor instead of an employee. What should I do?

You’d need to file Form 8919 if you think your employer wrongly classified you as an independent contractor when you believe you’re an employee. Some employers may make this mistake, sometimes to avoid paying taxes that are typically withheld for employees.

Filing Form 8919 allows you to pay Social Security and Medicare taxes on your earnings, which helps build your Social Security record for future benefits like retirement or disability.

Situations where this might apply include cases where your employer issues you a 1099-NEC form (used for contractors) rather than a W-2 (for employees) or if they aren’t withholding payroll taxes from your pay.

Who should use Form 8919?

One example is if you received a W-2 and a 1099-MISC from your employer in the same tax year.

The IRS has specific guidelines for who qualifies as an employee, mainly based on how much control the employer has over how the work is done. Generally, employees have set hours, specific methods of work assigned, and are closely managed, whereas independent contractors usually decide how, when, and where they work.

If you suspect you should be an employee, you may also have to file IRS Form SS-8 to have the IRS officially decide on your work status. Form 8919 lets you make sure that you’re covered under Social Security for any income that should have been taxed as employee earnings.

What is the ‘Reason Code’ on Form 8919?

On Form 8919, the “Reason Code” is a specific code that tells the IRS why you believe you were incorrectly classified as an independent contractor instead of an employee. Each code represents a different reason.

For example, if the IRS previously ruled you were an employee or if your employer gave you a W-2 in a previous year but is now treating you as a contractor, there is a reason code for each of these situations.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

How does Form 8919 affect my tax filing?

When you fill out Form 8919, it affects your taxes by allowing you to report Social Security and Medicare taxes as if you were an employee, even if your employer classified you otherwise. This way, the correct tax amounts get added to your Social Security record, which helps ensure you don’t miss out on future benefits.

On your tax return, Form 8919 shows the Social Security and Medicare taxes calculated on your earnings. You file it along with your regular tax return (Form 1040) and add it to the “Other Taxes” section.

What are the consequences of not filing Form 8919 when required?

First, the IRS may impose penalties and interest on any unpaid Social Security and Medicare taxes. This happens because, by not filing, you effectively underpay these required taxes.

The IRS can assess additional fines for failing to report accurately, and these penalties increase over time with interest if they remain unpaid.

Beyond penalties, not filing can also impact your future Social Security benefits. Social Security credits are earned through contributions to the Social Security system, which usually come from wages where taxes are properly withheld.

When these aren’t recorded correctly because of a missing Form 8919, it can reduce your Social Security earnings record, possibly lowering your benefits in the future.

Is Form 8919 required if my employer paid some taxes?

Form 8919 may still be necessary even if your employer has paid some taxes.

Sometimes, an employer might report only a portion of your earnings or misclassify you as a contractor. This means they could have paid some taxes, but not all of what’s required under employee status.

Form 8919 helps correct these records so that both Social Security and Medicare taxes are properly allocated on all qualifying earnings.

Does Form 8919 affect future employment?

Filing Form 8919 usually doesn’t have a direct impact on your current or future employment opportunities. This form is specifically for cases where you believe you’ve been incorrectly classified as an independent contractor rather than an employee, and it helps you correct your Social Security and Medicare tax records.

The IRS may contact your employer to verify the information, but they won’t get involved in employment matters or disputes between you and the employer.

If you’re worried about how this might affect your relationship with your employer, you could talk to a tax professional. They can give you guidance specific to your situation and help you understand any potential issues that may arise.

Where can I get help with Form 8919?

If you need help filling out Form 8919, there are several resources available. The IRS website provides detailed instructions for this form, and you can call the IRS directly if you have specific questions about filling it out.

Another option is to speak with a tax professional, like a CPA or an enrolled agent, who can guide you through the form and help you determine if filing it is the best step.

If you’re not sure about your employment status or how to approach your taxes, an expert can help with any questions.

Spread the word. Please share… 👉

IRS Form 8865

What is required for reporting a foreign partnership on Form 8865?

Published on November 13, 2024
by Grace Lorraine Angeles

Grace Lorraine, an IRS Enrolled Agent and CPA with 14 years of expat tax experience, specializes in US tax preparation, tax planning, and tax advice for US citizens and Green Card holders living and working abroad.

If you are a US person (a citizen or resident) with a stake in a partnership based outside the US, the IRS may require you to complete Form 8865 to ensure all related income, expenses, and transactions are reported.

Form 8865 is used by US taxpayers to report their ownership in foreign partnerships.

Completing this form means detailing the financial activity of the partnership that relates to you, like income or distributions you received.

Who needs to file Form 8865?

In general, if you’re a US person (citizen, resident, or certain business entities) with ownership or certain transactions with a foreign partnership, you may need to file Form 8865.
This requirement generally applies if you own 10% or more of the foreign partnership or meet specific transaction thresholds with the partnership.

The form has four filing categories, each with its own criteria:

Category 1: You have control of the foreign partnership, generally if you own 50% or more. Check our Controlled Foreign Company (CFC) article here.
Category 2: You own at least 10% in a foreign partnership that’s primarily controlled by US persons.
Category 3: You contribute certain assets to the foreign partnership.
Category 4: You engage in specific reportable transactions with the foreign partnership, such as buying or selling a significant interest.

Filing Form 8865 may be necessary if:

You directly own a substantial percentage of a foreign partnership.
You’ve gained control over a foreign partnership through investment.
You’ve had certain types of transactions with the foreign partnership, like transferring property.

What are the penalties for not filing Form 8865?

Penalties for Failing to File: The IRS may charge a US$10,000 penalty if Form 8865 isn’t submitted by the deadline. If you still don’t file after getting an IRS notice, additional penalties may apply—up to US$50,000 in total if the form is continuously late.
Penalties for Missing or Incorrect Information: Submitting Form 8865 with incomplete or incorrect details can also lead to additional fines. If any asset details are inaccurate or missing, the IRS might add a penalty equal to 10% of the total asset value.
Impact on Other Foreign Reporting Requirements: If Form 8865 isn’t filed when required, it can affect other tax areas. Missing this form can delay or prevent access to foreign tax credits, deductions, or other benefits.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

How does Form 8865 differ from other foreign reporting forms?

Form 8865 is for reporting ownership in foreign partnerships, whereas Form 5471 covers foreign corporations, and Form 8938 reports various foreign financial assets.

Each form has its own requirements and applies to specific types of foreign investments or assets.

Sometimes, multiple foreign reporting forms may be necessary. For example, if you have shares in both a foreign corporation and a foreign partnership, you might need to file both Form 5471 and Form 8865. If you hold foreign assets above a certain threshold, Form 8938 could also be required alongside Form 8865.

Many confuse these forms, as they all relate to foreign assets and income. Each form, however, is designed for a particular type of foreign entity or investment, so it’s important to know which ones apply to your situation.

If you think you’ll be confused, it’s best to leave all of this work to a tax professional. They can ensure that the correct forms are submitted accordingly and on time.

How do I determine my ownership percentage?

The percentage is usually based on how much of the partnership you control or have contributed to financially. The IRS looks at both direct ownership, where you own part of the partnership outright, and indirect ownership, where you may control shares through another entity, like a trust or business you have a stake in.

For example, if you directly own 30% and indirectly own another 10% through a business, your total ownership would be 40%.

Is Form 8865 required every year?

Yes, you’ll need to file Form 8865 every year you meet the requirements.

The form is required each year you meet the ownership or activity thresholds in the partnership, such as holding a certain ownership percentage or having certain transactions with the partnership.

However, if your ownership level changes and no longer meets the filing requirements, you won’t have to file that year.

But if your status changes back to meeting the criteria, you’ll need to start filing again. This annual filing helps the IRS keep accurate records on U.S. taxpayers involved in foreign partnerships.

Can Form 8865 be filed electronically?

You can submit Form 8865 electronically if you’re filing your federal tax return online. Form 8865 is typically attached to your regular tax return, so when you e-file your return, Form 8865 is included with it.

What records should I keep after filing Form 8865?

After submitting Form 8865, it’s important to hold on to copies of your filled-out form, your full tax return, and any documents tied to the foreign partnership.

Useful records include partnership agreements, proof of ownership, any financial statements, and notes on contributions or distributions. These documents might be needed later if the IRS has questions or for future filings.

The IRS suggests keeping tax records for at least seven years, but for forms involving foreign investments like this one, it can be helpful to keep them longer.

Spread the word. Please share… 👉

DS-4080

Published on November 07, 2024
by Clark Stott

I want to renounce my US citizenship. What form should I use?

The official IRS form is DS-4080, known as the Oath of Renunciation of the Nationality of the United States. It is a document used in the formal process of renouncing US citizenship.

This form records the individual’s official intent to give up their citizenship status. The filing of DS-4080 is done through a US Embassy or Consulate as part of an in-person appointment, which finalizes the renunciation process.

Are there other documents in conjunction with DS-4080?

Yes, there are. Other related forms may also be required, such as:

Form DS-4079: Determines possible loss of nationality.
Form DS-4081: Covers acknowledgment of the consequences of renouncing U.S. citizenship.
Form DS-4082: Declaration of intent to renounce.

These forms ensure that the applicant fully understands the rights and responsibilities they are giving up. After taking the oath, the Department of State processes these documents and issues a Certificate of Loss of Nationality (CLN).

Are there cost and processing fees?

Yes, there are. According to current regulations, the Department of State charges a renunciation fee, which typically ranges around US$2,350. However, processing times can vary, but the certificate confirming renunciation (CLN) usually takes several months to be issued.

Exit Tax. What is that?

The Exit Tax is a US tax that applies to some people who decide to give up their US citizenship or Green Card. This tax mainly affects individuals who have a high net worth or a high income.

If your total assets (everything you own) are worth US$2 million or more, or if your average yearly income tax owed over the last five years was around US$201,000 or higher, the IRS considers you a “covered expatriate.”

As a covered expatriate, you may owe Exit Tax on the money you would have made if you sold all your assets the day before you gave up your citizenship or Green Card. The IRS allows a certain amount of “gain” to be tax-free, but anything above that amount may be taxed, even if you didn’t actually sell anything.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

What is the required documentation used for Form DS-4080?

Proof of Identity and Nationality:
- Valid US passport or proof of US citizenship (such as a birth certificate).
- Proof of any other nationality or citizenship you hold, like a passport from another country.
Supporting Documents:
- Completed Form DS-4079 (Request for Determination of Possible Loss of United States Citizenship), which helps the consulate understand your reasons for renunciation.
- Form 8854 (Initial and Annual Expatriation Statement) if applicable, which certifies that you have complied with US tax obligations in the five years prior to renunciation.
Additional Form:
- Any additional paperwork relevant to tax compliance (such as Form W-8CE if deferring specific tax payments) may also apply.

It’s recommended to get a tax professional’s support, as they may have specific guidelines or will inform you of additional documentation based on individual circumstances.

How does renouncing US citizenship impact social security and retirement benefits?

If you renounce US citizenship, you can still receive Social Security, but the process may be more complex. Whether you continue to receive these benefits depends on whether the US has a totalization agreement with your new country.

Medicare generally isn’t available outside the U.S., so you’ll need other health coverage.

Distributions from US retirement accounts like 401(k)s or IRAs may face higher taxes or withholdings after renunciation, so it’s better to plan ahead to avoid surprises.

How will renouncing affect my ability to visit the US in the future?

After renouncing, you lose the automatic right to enter the US and may need a visa to visit. Some former citizens might qualify for visa-free travel if their new country is part of the Visa Waiver Program, but others will need to apply for a visa to reenter.

Can I reverse my decision after taking the oath?

Once you’ve taken the Oath of Renunciation, the decision is typically permanent.

If you want to regain US citizenship, you’d have to reapply, which can be a lengthy and difficult process.

Do I need a second nationality before renouncing?

Yes, you need another nationality before renouncing your US citizenship to avoid becoming “stateless,” which means not having any citizenship.

Without citizenship, you won’t have the legal protections a country provides, and it would be very hard to travel, get a passport, or access basic rights like healthcare, employment, and legal residency.

What happens to my US bank accounts after renunciation?

Renouncing your US citizenship doesn’t automatically close your US bank accounts, but it can impact your access to certain banking services. Most US banks let non-citizens keep accounts, though some may require extra paperwork, such as proof of residency in another country.

Certain banks might restrict services for non-citizens or apply different fees, especially if you live abroad. It’s best to check with your bank about its policies to understand how renunciation might affect your account access and service options.

Will renouncing my citizenship affect my family or just me?

No. Renouncing your US citizenship is an individual decision and only affects your status, not your family’s. Each family member would need to renounce separately if they also want to give up their US citizenship.

Spread the word. Please share… 👉

IRS Form 1099 Types

What Are All The IRS Form 1099 Types?

Published on October 22, 2024
by Clark Stott

Someone canceled my debt. How do I tell the IRS?

If a lender forgives or cancels debt of US$600 or more, the IRS usually considers this forgiven amount as income that needs to be reported on your taxes.

The lender will send you Form 1099-C, which reports how much debt was forgiven. You need to include this form when filing your tax return to let the IRS know about the canceled debt.

Why am I hearing about different kinds of Form 1099?

The IRS uses Form 1099 to track various kinds of income that aren’t tied to a regular job, like freelance work or interest from a bank account. Because people earn money in different ways, there are several versions of the form to cover each type of income.

You might hear about different 1099 forms because each one serves a specific purpose—whether you earned interest, got paid as a contractor, or had a debt canceled, there’s a form for that.

Why use the IRS Streamlined Tax Amnesty Program?

Get a Quote

Learn More

Book your free consultation

"*" indicates required fields

Name*
First Last
Email*

Phone number, including country code
What's the best time to call?*
What would you like to talk to us about?*
Message
CAPTCHA

Connect with over 10,000+ expats today!

Join Now, Free Forever

Connect with over 10,000+ expats today!

Join our lively Facebook group to engage in discussions, share insights, and connect with US expats around the world.

Join Now, Free Forever

When do you need to file a Form 1099-INT?

Form 1099-INT is for reporting interest income from things like savings accounts or investments. If you earn more than US$10 in interest from your bank or other financial institutions, they will send you this form.

It shows how much interest you made, and you’ll need to report that amount when you file your taxes. Interest income is taxed just like regular income, so it’s important to include it when doing your tax return.

What is reported on Form 1099-K?

Form 1099-K is used to report payment transactions handled by third-party networks, such as PayPal, Stripe, or Venmo. These forms are sent to individuals or businesses that receive payments through these platforms.

If you have more than 200 transactions and the total payments exceed US$20,000, you will receive a 1099-K. This applies to freelancers, gig workers, or anyone receiving payments through third-party platforms.

How is Form 1099-MISC used today?

Form 1099-MISC is used to report different kinds of income that don’t fall under wages or salaries. It’s most commonly used to report payments like rent, legal settlements, and prizes if you received US$600 or more in a year.

If you receive royalties of US$10 or more, they’ll also be reported on this form.

Form 1099-MISC used to cover payments to independent contractors, but this is now done through Form 1099-NEC. So, if you receive income outside of a regular job that doesn’t fit into another category, you’ll likely receive a 1099-MISC form.

What are all the IRS Form 1099 Types?

Form 1099 Type	Purpose
1099-A	Acquisition or Abandonment of Secured Property
1099-B	Proceeds from Broker and Barter Exchange Transactions
1099-C	Cancellation of Debt
1099-CAP	Changes in Corporate Control and Capital Structure
1099-DIV	Dividends and Distributions
1099-G	Certain Government Payments (e.g., unemployment compensation)
1099-H	Health Coverage Tax Credit (HCTC) Advance Payments
1099-INT	Interest Income
1099-K	Payment Card and Third Party Network Transactions
1099-LS	Reportable Life Insurance Sale
1099-LTC	Long-Term Care and Accelerated Death Benefits
1099-MISC	Miscellaneous Income
1099-NEC	Nonemployee Compensation
1099-OID	Original Issue Discount
1099-PATR	Taxable Distributions Received From Cooperatives
1099-Q	Payments from Qualified Education Programs (e.g., 529 plans)
1099-QA	Distributions from ABLE Accounts
1099-R	Distributions from Pensions, IRAs, Annuities, and Profit-Sharing Plans
1099-S	Proceeds from Real Estate Transactions
1099-SA	Distributions from Health Savings Accounts (HSAs)
1099-SB	Seller’s Investment in Life Insurance Contract

What should I do if I don’t receive a 1099 form?

If you know you should get a 1099 form but don’t receive it, don’t worry—you’re still required to report the income.

First, reach out to the person or business that should send the form to see if there’s been a delay. If you can’t get the form, use your own records (like bank statements or payment receipts) to estimate the income and include it in your tax return.

It’s important to report all your income even if the form is missing, so you don’t run into issues with the IRS later. You can always ask a tax professional for help if you’re not sure how to report it correctly.

What happens if the information on my 1099 form is incorrect?

If the information on your 1099 form is wrong, such as the income amount or your name being incorrect, you need to contact the person or business who sent you the form as soon as possible.

They will issue a corrected 1099 form and send it both to you and the IRS. This is important because the IRS compares the information on your 1099 with your tax return.

If the details don’t match, you could face issues like delays in processing or even penalties.

Do I need to report income if it’s less than the minimum threshold for 1099?

Yes, you still need to report income even if it’s below the threshold that requires a 1099 form.

For example, if you earned less than US$600 from freelance work, the company that paid you might not send you a 1099 form.

However, you’re still required to report that income when filing your tax return, as the IRS requires you to report all income.

Can I deduct expenses related to 1099 income?

Yes, if you have expenses related to the income you earned through 1099 work (like freelancing or contracting), you can deduct them.

Common expenses include things like office supplies, travel costs, or even part of your rent if you use a home office.

To claim these deductions, you’ll need to keep good records of your expenses, such as receipts or invoices, and you’ll report them on your tax return. This can help lower your taxable income and reduce your tax bill.

Spread the word. Please share… 👉

Expat Tax Guides

How do I correct my tax return with an amendment?

Table of Contents

What is an amended tax return, and when should I file one?

Can I file an amended return electronically, or does it need to be mailed?

What is the deadline for filing an amended tax return?

Why use the IRS Streamlined Tax Amnesty Program?

Connect with over 10,000+ expats today!

How do I track the status of my amended return?

What is the process of filing an amended return?

Can I amend my return more than once?

Can I amend my return to claim missed credits or deductions?

How does amending a joint return affect both spouses?

What happens if the IRS denies my amended return?

Can I amend my state tax return at the same time as my federal return?

Can amending my return trigger an IRS audit?

How do I handle amending returns for multiple years at once?

Filing a deceased person’s tax return

Table of Contents

Who is responsible for handling taxes after someone passes away?

What forms are required when filing for a deceased person?

How is income reported after someone passes away?

Why use the IRS Streamlined Tax Amnesty Program?

Connect with over 10,000+ expats today!

Are there tax benefits or exemptions for filing on behalf of a deceased person?

What happens if taxes are owed or a refund is due?

When are taxes for a deceased person due?

What filing status should you use?

Can a deceased person’s medical expenses be deducted on their final return?

Do I need a death certificate to file their tax return?

What happens if the deceased person owned a business?

Does the IRS need to be notified of a person’s death directly?

Other things to keep in mind

Retirement Income, Taxable?

Table of Contents

Is retirement income taxable?

How does income impact Medicare Premiums in retirement?

How can I manage taxes in retirement?

Why use the IRS Streamlined Tax Amnesty Program?

Connect with over 10,000+ expats today!

Are state taxes different for retirement income?

What should I know about tax withholding and estimated payments?

Are social security benefits taxable?

How are IRAs and 401(k)s taxed in retirement?

What taxes apply to pension and annuity income?

What is the Premium Tax Credit?

Table of Contents

Does the Premium Tax Credit help with health insurance costs?

Who qualifies for the Premium Tax Credit?

Income:

Health Insurance Plan:

Other Insurance Options:

Tax Filing:

How is the Premium Tax Credit calculated?

Why use the IRS Streamlined Tax Amnesty Program?

Connect with over 10,000+ expats today!

What happens if my income changes during the year?

Can I claim the Premium Tax Credit if I file jointly or separately?

What are the limitations of the Premium Tax Credit?

2024 Federal Poverty Guidelines for the 48 Contiguous States

Can I claim the Premium Tax Credit retroactively?

Can a non-tax filer still benefit from the premium tax credit?

How do I report the Premium Tax Credit on my tax return?

What Is The Tax Deadline For 2024-2025?

Table of Contents

Are there any changes to the tax deadline this year?

Why use the IRS Streamlined Tax Amnesty Program?

Connect with over 10,000+ expats today!

What happens if I miss the tax deadline?

Are there any tax credits and deductions I can use?

How can I request an extension for my tax return?

What if I live abroad—do I get more time to file?

Can I file electronically up to the deadline?

Should I get a tax professional’s help?

How do I find the right tax professional?

What do I do about estimated quarterly taxes?

Does the IRS offer help if I’m unable to pay my taxes on time?

Are there separate deadlines for business owners or corporations?

How do I avoid getting scammed?:

Form 8867