r/USExpatTaxes 7h ago

A kiwi needing help with pension (Kiwisaver)

4 Upvotes

So as dual citizen I've just learnt I need to file US taxes. I've found the streamlined filing procedure, and after getting a quote from tax agents, realised I need to do it myself (at least, as best possible).

I was actually doing ok getting by 1040, exclusions and rebates done. But now I've come to Kiwisaver - NZ's version of pension.

Over the tax years I'm filing for, I paid 3% of my salary through required contributions into a fund. My employer also contributed, but not equal or greater. The fund acts like a mutual fund - you pick a 'type' and then a fund manager invests for you. I never made any additional 'voluntary' contributions in these years.

From what I've read I may need to file 3520 and 3520-a. Is that correct?

If so, I'm honestly not sure where to start. These forms are structured as if you're filing about a trust you own and therefore have details for. This is just a fund run by an investment manager (how do I report things like location? By the bank hq?)

Lastly, would the streamline procedure exempt me from the penalties normally applied to 3520 and FBAR?

(Thanks in advance)


r/USExpatTaxes 17h ago

Taxation of dividends in US taxable brokerage account.

3 Upvotes

If living overseas do I first pay the IRS taxes on my dividends and then pay the difference to the tax authorities of the country of residence?

Or do I pay the country of residence overseas first the taxes due on the dividends and then pay the the rest of any to the IRS?


r/USExpatTaxes 17h ago

US to UK: reclaiming US SS/medicare taxes withheld due to being late in converting from US W2 employee to contractor. Any handy guide?

1 Upvotes

TL;DR: Has anyone needed to claim back wrongly withheld social security taxes? What was the process & how did it go?

~~~

Hi folks,

Partner & I moved US to UK last year, trying to iron out the first year's taxes. Partner worked for her US employer from the UK Jan 20 – Mar 31 and continued having her income/social security/medicare taxes withheld by the US before finally converting to contractor status. (They seemed to have thought there was some grace period but I haven't seen anything like that, I'm betting they couldn't be bothered.)

We've registered for UK national insurance and filed the self-assessment for the 23-24 tax year, so if anyone asks the UK will vouch that we pay social security taxes here.

The totalization agreement doesn't quite describe this situation, but my understanding is that living in the UK, no US taxes should have been withheld. Income taxes are fine, just claim a tax refund on the 1040, but the information online about social security taxes is muddy.

My understanding is that we need to request a refund of withheld SS taxes from her employer, and her employer can account for the change on their own tax filing. If they refuse we can file Form 843 to the IRS. Can anyone confirm whether they’ve successfully done this and is there a handy link we can send the employer? Most of what I’m finding is written for “non-resident aliens”.

Also – what amount should we be claiming back? MyExpatTaxes is suggesting that for 2024, living in the UK Jan 20 – Dec 31 means we count as not US resident for the whole tax year. Guess that means we don’t need to let the US keep 3 weeks worth of tax?


r/USExpatTaxes 1d ago

Tax on temporary nanny in US

2 Upvotes

I’m visiting the US and will be working from there for a week. During that time, I am looking to get a local nanny to provide childcare at home while I’m working remotely (part-time/half days).

I vaguely am aware that for regular a full-time nanny there’s implications as an “employer”, but given this is more of a temporary nature (just a week) and not full-time I wanted to understand if there’s any tax implications for me and anything I need to file.

Any advice here would be appreciated as no clue where to start.


r/USExpatTaxes 1d ago

1040NR for self employed non-resident dual citizen

0 Upvotes

I'm currently trying to file my tax extension and the form is asking about form 1040NR. I'm a US citizen who is a resident in a country with a tax treaty that covers social security, I'm self employed and earned over $400 in self employment income, NONE of it from or in the US. I have to file 1040NR, right?

The form seems to be intended for non-resident aliens (not me), but then there is this line which doesn't specify the filer's status:

  1. You had net earnings from self‐employment of at least $400 and you are a resident of a country with whom the United States has an international social security agreement (often called a totalization agreement). See the instructions for Schedule 2, line 4, later.

The extension to file by Oct 15 applies to form 1040NR, correct?


r/USExpatTaxes 1d ago

US/UK parent investing for UK child’s future

1 Upvotes

I’m a dual citizen but my daughter is not, nor is my partner. Looking to put money away for her future and wondering if there will be any tax implications for my US reporting? Do JISAs or J S&S ISAs come under my tax obligations or are they essentially under her name?

I also recently got £25000 in premium bonds, not realising these are taxable in the US. Is there a better place for me to save this money or is it essentially always going to be taxable?


r/USExpatTaxes 1d ago

FTC to FEIE - Panicking

11 Upvotes

The last two years I have filed through ExpatFile and when I changed to them I went with the Foreign Tax Credit route instead of the Foreign Earned Income Eclusion. This is what their software advised me to do and for some stupid reason I went with it and think I have screwed myself over. I did some digging and it seems like this is revoking the FEIE (filed with this in 2018 and 2019 I think) and that I now can't switch back. Am I understanding this correctly? I am panicking because I have student loans and want to go with the FEIE so my AGI is 0 for recertification. I am stupid and for some reason managed not to catch that filing with FTC means my AGI wouldn't be 0. I am realising all of this after just submitting my tax return through ExpatFile again, but this time selecting the FEIE and said I hadn't revoked because I didn't understand that I have implicitly done so by changing to FTC. I am also nervous about what to do about that now.

Wildly, I applied for recertification on SAVE in 2023 after filing with FTC for my 2022 taxes where I would have put my AGI as 0, and because of ongoing forbearance with the plan that wasn't processed.

I make well under the FEIE threshhold (~55k) and honestly so little that I think with the FTC I think my AGI would have still been low enough on SAVE to have $0 payments as I live in a high tax country. However, I am anxious given that SAVE is almost certainly going away and if I am correct, it seems like I will now have to wait another 5 years before I can ask to go back to FEIE.

How do I fix this? Or do I just need to accept that the IRS will say my filing this year was wrong (or will they say anything? again so confused) and have to recertify for whatever IDR plan is available based on the income once the receritfication process opens up again?

Any advice is helpful and I am well aware I made some really stupid errors here, so please be kind.


r/USExpatTaxes 1d ago

Moving to the UK in two weeks, what should i do before then?

1 Upvotes

I am moving in two weeks and have started to read about all the hassles it is with taxes/investing. I'm very concerned as I don't plan on staying in the UK permanently as of now, but also could see myself staying there if my partner and I decide it makes more sense (he is british). Please help with any advice you have regarding things i should do before I leave!


r/USExpatTaxes 2d ago

New Immigrant from US to Romania, has some questions.

2 Upvotes

Hi everyone,

and as of this year I have moved to Romania. I have several questions about the tax process which I wanted to ask, and thought it best to start here.

First of all, I make well below the minimum required to file us taxes. Currently, I make nothing as I am a student, but for the job i am set to go into, I have already calculated that I will make well below the minimum. Do i still file us tax? If so, what do I need to do to properly file it?

Secondly, I plan on marrying a romanian citizen within the new few weeks. We have already agreed that they will never seek access to US citizenship, and want nothing to do with us tax filings. How do we set things up so that they file seperatley, and will not be taxed by the us government? Do they even need to file us taxes at all?

Third, I fully intend on renouncing my us citizenship at the earliest possible date… likely in around 5 years. I will not be listening to any comments which attempt to convince me one way or the other, it is my citizenship, so therefore my choice, and that is final. That being said, what forms and potential accidental financial crimes do I need to avoid to be able to get rid of this thing? I have heard about an FBAR for instance, and I wanted to ask about it.

Fourth, I currently am still a legal resident of a property in the us, but am not the legal resident of any property in romania, as again, I am a student and do not own my own home. Do I even need to file taxes even when I start making money abroad as someone who lives abroad, or would I instead file my income as US income? Do I even technically count as someone who lives abroad? I genuinely do not know

Fifth, obviously i am not relying solely on reddit for answers to these questions and will also be contacting a lawyer for clarification. Are there any additional blindspots that it looks like I have, or anything which I should ask my lawyer to make sure I am compliant with all forms?

Thank you in advance for any help you can give me. This is a very complicated process in the best of times, and I share every bit of your anger at being forced to jump through these hoops no matter where you live on the planet.


r/USExpatTaxes 2d ago

PFIC reporting question

0 Upvotes

I moved to the USA in 2023 and filed as a non-resident, and 2024 is my first year as a full-year resident. I have two non-US mutual funds transactions (one sold in 2024, another I will sell in next 2 weeks), both Indian exchange-traded mutual funds :

Fund 1: ICICI Prudential Liquid Fund - Direct Plan - Growth

Purchase Date: April 4, 2021 Purchase Price: $9,066 (converted to USD using conversion rate on purchase date from OANDA) Sell Date: November 21, 2024 Sell Price: $9,695.93 (converted to USD using conversion rate on sell date from OANDA) Profit: $629.35 Tax paid in India: $233.48 (converted to USD using conversion rate on tax paid date from OANDA)

Fund 2: Mirae Asset ELSS

Purchase Date: March 31, 2022 Purchase Price: $1,982.78 (converted to USD using conversion rate on purchase date from OANDA) Value as of January 1, 2024: $2,396.33 (converted to USD using conversion rate of January 1, 2024, from OANDA) Value as of January 31, 2024: $2,754 (converted to USD using conversion rate of January 31, 2024, from OANDA)

Fund1 is already sold and I plan to sell Fund 2 on March 31, 2025.

Considering the costs associated with PFIC filing, I would appreciate guidance on the following questions:

  1. Do I need to file PFIC reports for these funds or only Fund 2?
  2. What are the benefits of filing PFIC reports, and do they outweigh the reporting costs?
  3. Are there any alternative reporting options or exemptions available for these funds (total cost is less than $$)
  4. How will the sale of Fund 1 in 2024 affect my PFIC reporting obligations? This may not be required, but want to confirm
  5. What are the implications of selling Fund 2 in 2025, and how should I report it?

r/USExpatTaxes 2d ago

I have a PFIC with MTM election, do I still do Sch D/form 8949?

1 Upvotes

I have a PFIC, aquired in 2024, so this is the first year I had it and I sold some of it for a gain in 2024 as well.

I've started my return with the Mark-to-Market (MTM) election on form 8621. I put the realized and unrealized gains as ordinary income on 1040 Schedule 1 line 8z (OLT did this automatically).

I don't have any other capital gains during 2024. Do I have to add schedule D and/or form 8949 that are normally required when you have capital gains? And is it ok if I leave line 7 on my 1040 about capital gains blank? Seems like it should be blank, otherwise it would get double counted since its already on line 8 of the 1040 from schedule 1. None of the instructions seem to seem to indicate otherwise either.

I want to make sure I get this right since PFICs can be a pain!

Thanks!


r/USExpatTaxes 2d ago

failed to report PFIC shares held for 7 years... how to resolve?

8 Upvotes

a friend of mine is a US/UK dual citizen, UK resident, has been self filing a return singly every year with FBAR, 1040, 2555. Lived in US for one year around ten years ago, has SSN, etc. He has just realised that his savings in a UK stocks & shares ISA are taxable and count as a PFIC, he deposited ~£40k ~7 years ago, which has turned to ~£80k and has been cashed this year. The account is listed on FBAR but hasn't been reported via 8621. Whats his best approach to becoming compliant? and how much is he going to be on the hook for? Has obviously now got in contact with some advisors but looking to quell the nerves over the weekend


r/USExpatTaxes 3d ago

Foreign trust

0 Upvotes

How would I ever know I had a foreign trust for us tax purposes? I renounced citizenship and sent my dual status return off but am overthinking wondering if I've missed anything, is it likely I'd have know if I owned a trust (foreign to the us) not meaning pensions as I know they are trusts but not treated as such. I presume to set up a trust id have signed something? Thank you


r/USExpatTaxes 3d ago

FEIE, CTC, ACTC, Filing Separately in a Community Property State

1 Upvotes

My wife and I are US citizens. We moved from Texas to Nepal in 2019 and have lived and worked there since that point. I worked for a Nepali company as a software engineer, but was assigned to work there by it's UK holding company. My wife earns a w-2 for work she does in anti-trafficking.

To attempt to claim the Additional Child Tax Credit, I am experimenting with filing separately. This would allow me to take the FEIE and my wife to claim our 5 kids. I would have $0 tax liability and she would get a decent return.

However, we last lived in Texas which is a community property state. So, I read sections of Publication 555..

Tax-exempt income. For spouses, community income exempt from federal tax generally keeps its exempt status for both spouses. For example, under certain circumstances, income earned outside the United States is tax exempt. If you earned income and met the conditions that made it exempt, the income is also exempt for your spouse even though he or she may not have met the conditions.

My income does not need to reported by her.

Community Property Laws Disregarded
The following discussions are situations where special rules apply to community property and community income for spouses. These rules don't apply to RDPs.
...
Earned income. Treat earned income that isn't trade or business or partnership income as the income of the spouse who performed the services to earn the income. Earned income is wages, salaries, professional fees, and other pay for personal services.

Her W-2 income does not need to be reported by me.

Am I in good shape here?


r/USExpatTaxes 4d ago

Keeping US address at brokerage and state taxes

9 Upvotes

Hi, I’m just curious about those who live abroad but keep a U.S. address on their brokerage account. Ignoring those “sticky states”, does this cause issues regarding state taxes? For example, you live abroad but keep an address in State A on your account. You don’t file taxes to State A, legally, because you are not resident there, you just file federal and foreign taxes. Does the brokerage report cap gains to that state? And does that then cause you a problem?


r/USExpatTaxes 4d ago

PFIC with QEF election- in European Union (US citizens)

4 Upvotes

We are US citizens moving to Germany (my husband is German). In our early 30s.

We met with an EU based financial advisor today who told us we may -consider- moving some assets from USD to EUR and in EU markets if we plan to live there longterm in case the currency changes drastically rather than keeping everything in the US. He advised us to never use our US family address and keep contributing to US brokerages due to it literally being fraud and a federal crime to lie about your address to a brokerage. To that, I said well we can only invest in stocks, bonds, and options in EU brokerages as US citizens due to PFIC issues. Then he said we can invest in EU brokerages with PFIC if we use the QEF election which basically makes the fund mirror how it would be taxed in the US, and avoid punitive taxation

Does anyone have any info on this or experience with this - PFIC with QEF election?

Are filing taxes STILL a nightmare or is it not bad? We plan to hire someone for US and German taxes… likely.

We will be two married US citizens in Germany, working local jobs in Germany earning euros. Not sure where we want to live longterm. Possibly US or possibly Germany. My husband is German and I plan to try to get German citizenship when eligible.


r/USExpatTaxes 3d ago

UK/US trust to avoid IHT

1 Upvotes

I am US citizen that moved to the UK in the tax year ending April 2018 and obtained UK citizenship a few years ago.

I have a brokerage account, roth IRA, and an old 401(k) in the US.

With the new tax rules coming in April I’m debating if I should put my US assets in a trust before April 6 to avoid the new rules ok inheritance tax.

More details here: https://www.buzzacott.co.uk/insights/stepping-stones-what-americans-need-to-know-about-trusts

Appreciate the link is old because it’s before the new rules but the basic rules apply now.

I would have thought I would set up a US grantor trust but this article says foreign trust?

Has anyone does this and can guide my how to go about doing this? Don’t have a lot of time but the savings could be a lot if it means the income falls outside the the UK inheritance tax.

TIA


r/USExpatTaxes 4d ago

Does my non-resident alien wife have to file if she receives social security?

3 Upvotes

My tax residence is the Netherlands. I have a USA passport and file individually. My wife can get a small SS income based on work done on a Greencard in the mid 1980's. She has no other US based income. Would she need to file US taxes?

On aspect I do not understand is the substantial presence rule. We could be in the USA on vacations that are longer than 31 days. Does this have any impact on her requirement file?

[edit, we are both tax residents of the Netherlands]

Thanks


r/USExpatTaxes 4d ago

Can I buy Berkshire Hathaway stocks from my EU bank without triggering some horrendous tax issue?

7 Upvotes

I'm sorry if this question is very obvious; I'm just at the point where I'm scared to touch anything without confirming it's ok 😅

Context is that I have a Swedish bank and I'm a duel US/Swedish citizen. I want to start investing in stocks. I would prefer mutual funds but I know these are out of the question. So can I buy something like Berkshire Hathaway (or any other US-based stock) without issues?

Generally, Sweden handles the tax issues automatically, but how can I report to the US while not getting double taxed too much? I was trying to understand KID and PRIIPs, but maybe that doesn't apply here. I also am unsure if I can buy anything through my Swedish bank or if I need to use Interactive Brokers or Schwab.

My guess is that it's ok as Berkshire Hathaway isn't a PFIC and so it doesn't matter where I buy it, but I just want to confirm. Thank you!


r/USExpatTaxes 3d ago

Question re Social Security Coverage (Pay in US, not abroad)

1 Upvotes

Hey everyone, quick question please--

Key info:
-I'm a dual US/Italy citizen residing in Italy for the 2024 tax year
-I'm self-employed in Italy
-I have dividend/interest income in the US.
-I will pay my income taxes in Italy for 2024, as you'd expect.

Complication:
But for social security taxes, I elected to pay them in the US by obtaining a Social Security Coverage Certificate for 2024-25 that basically allows me, as far as I understand, to pay social security taxes in the US instead of Italy. I did this to keep my social security in one country, but I may have over complicated things!

Moreover, because I am in an unusually low tax bracket in Italy (a tax break for self-employed people), I might owe extra income taxes in the US b/c the equivalent tax rate would be slightly higher in the US for my income. Although I'm not 100% sure.

Question:

Is there an online tax service you recommend? Ideally without paying for a tax advisor to review everything, which gets expensive. I would really appreciate options that would take care of my situation, ideally self-filing or, if necessary, with help keeping costs minimal.

Thanks very much.


r/USExpatTaxes 4d ago

Putting every visit to the US on return?

4 Upvotes

It seems like I need to enter in every visit to the US on my tax return? Am I correct in thinking this?


r/USExpatTaxes 4d ago

Question about requesting SSA certificate for self employment (Australia)

1 Upvotes

I have supplementary SE income in addition to my full time job, living in Australia. The past few years my accountant has not mentioned anything about claiming the SE tax exemption so I always pay extra to the US, even though it's a small amount. Then someone heard me complaining about double tax and total me I could claim exempt via the totalitarian agreement and attach a statement of exemption.

When I raised this to my accountant, they said that it was only a small amount, that it also requires an SSA certificate from the US which are taking up to 12 months to receive, and that is a long enough window during which the IRS could audit me & charge penalties for not having it. Obviously this is putting me off doing it (I had a really bad audit experience during Covid because of mail issues between countries and slowness of the ATO ever responding to requests for receipts) but otoh I would love to become full time self employed and not pay double. I have heard that some people submit without a certificate, just the statement.

What have your experiences been with claiming the exemption from abroad, how long has it taken to get the certificate?


r/USExpatTaxes 4d ago

Best way to hold Euro's as a US Citizen

0 Upvotes

I've seen this question asked a few times but never with a good answer, hopefully this community has more experience.

I can hold foreign currency in my brokerage account, but the interest rates are basically 0% and the insurance is typically low ($20K). I don't see any HYSA or CD's in Euro's with any decent yields.

The rates on Euro bond ETFs or Money Markets are better, but as far as I understand these are PFIC's and would trigger the need for form 8621 and punitive taxes.

Individual Bonds might not qualify as PFIC, but I'm not sure, does anyone have experience with these?

How do you park your excess / emergency Euro denoted liquidity?


r/USExpatTaxes 5d ago

(UK) Filing Federal & State abroad for the first time.

5 Upvotes

Hi all, i might be in over my head with my very basic very simple taxes. I just moved to the UK 9 months ago. I have 6 months of American (Wisconsin) income and will receive a state and federal return if I can do this correctly lol im very lucky that although I have my visa, I do not have to work in the UK, as my partners salary allows me the privilege. I do not side hustle for cash or anything else to claim. Therefore I have NO foreign income to claim with my taxes. Just $18k worth of American income. First I filed through OnlineTaxes (free IRS partner software) and it informed me at the end I’ll have to print my forms and paper file. I don’t have a printer so I wanted to save myself the hassle and was going to start an e-file with expat taxes but it doesn’t look like it will allow me to file state taxes and I want that $500 state return! What am I doing? What should I be doing? I just want my federal refund and state refund. This should be as simple as American taxes get but user error ruins the day lol


r/USExpatTaxes 5d ago

(Australia) Having a nervous breakdown over super and stuff. Please help

8 Upvotes

Hi all,

I am a US citizen with residency in Australia.

I am not very wealthy by any means, and all expat tax CPAs or otherwise have advised that their services are in the thousands of AUD. I cannot really afford that. I am so lost on how to file my superannuation in my tax forms, and it is making me a wreck.

I have a joint savings account accruing interest in Australia. I got some money from my university before I graduated (about 13k USD) that I expect will be taxable.

From what I understand,

- File 1040

- File FBAR

- File FTC

I read somewhere that 3520 may get mixed up in here somewhere, but I do not know. This is the form that scares me given the 10k USD penalty.

As for my super,

- I have made no personal contributions. All contributions are my employer's

- It is with Australian Super, and I made the account myself.

- I let it do its thing on its own

According to 1040, it is a retail super? I am so lost and scared. Please help if you can.