Larry's 2015 U.S. Tax Guide for U.S. Expats, Green Card Holders and Non-Resident Aliens in User-Friendly English. Laurence E. 'Larry'
to be aware of, living outside of the United States, cynically annotated but still boring!
Schedule B, Part 3 of the 1040
FinCEN 114
8938
2555
1116
8965
5471/8865
8858/8858 Schedule M
3520
8621
8832
14653
Banking and investing forms you are going to be asked for: W-9 and W-8 BEN E – This is the sort of stuff that makes for Kafka-esque, bureaucratic nightmares!
The Affordable Care Act (aka Obamacare), Social Security and Medicare – Should you be glad you live outside the US?
Capital gains and capital loss transactions – a refresher – before they change it and increase rates
The AMT – Always a system no one quite understands
Penalties, interest and the statute of limitations – Better to be aware of these – they truly can ruin you!
OVDP and the new Streamlined Procedures – note, there are different residency requirements, here!
Giving and receiving – you’ve got to report both giving (ever hear of the gift tax return?) and receiving – receiving from anyone, whether foreign trusts, gifts and bequests to you from either related or unrelated individuals (even if they are not US tax filers) will be costly if you do not report !
Returning to the United States after a lifetime overseas
Expatriation as an alternative that you might seriously want to consider – especially if you are an overseas business person and have to endure the indignities of FATCA
Comments after a lifetime of investing from a battle-scarred, (hopefully) wise, but lousy investor; thoughts about the investment needs of different generations…..and ‘letting go’…..
End notes – and that they will truly be: 9 February 2015 is the final day writing this book – after writing and giving myself a day to review the end notes and ascertain that I didn’t make a fool of myself, I’ll submit the manuscript to the publisher and begin my 49th consecutive tax season!!!!!
The introduction – for the sixth time I’m doing an introduction to a tax book.
Am I tired of writing tax books? Yes and no – I’d love to write fiction but recognize a distinct lack of passion to drive me all the way through a piece of fiction. For the same reason, I’ll never amount to much of a musician in spite of my fondness for virtually every type of music, except, perhaps, Chinese opera. Regardless, or perhaps because of my not being able to fictionalize that which follows, I’m going to have fun writing this book, this year…….and I thank, in advance, those who are reviewing the text to make sure I don’t get myself in trouble.
Well, well, well, here we go again – six books, five of them in this series, and I am once again happy to say:
Welcome, dear reader, to the 2015 edition of Larry's U.S. Tax Guide for Expats, Green Card Holders and Non-Resident Aliens - in User-Friendly English!
This time around there’s a section specifically for the non-U.S. ‘person. It is being written specifically for that non-U.S ‘person’ – someone with investments in the United States - who has to report on an annual basis and is subject to some real pain-in-the-ass penalties if the return is not filed. With the exponential increase in expatriation from U.S. citizenship, many former U.S. citizens join others throughout the world in having U.S. investments for which that person just might have to file – we’ll go over it this time around – welcome to the book title!
You guys out there, the readers of this are doing something very, very bold: you've actually purchased a book about the world's most confusing tax system. I am trying something equally as bold - to write a book that is readable! Now, my friends, go on and do something more bold than that: read the sections of this book that interest you.....you don't have to read the whole thing but read those sections that are applicable to you. You'll find it informative - I guarantee it! Well.....not really an iron-clad guarantee. If you do not find it informative, I'm not going to give you your money back!
And so I begin…..I'm sitting at my desk in our leased apartment in Bangkok, just a few days before 2014 ends. Last year I started writing while at home in Guangzhou, PRC, vowing at that time never to write in the Guangzhou winter. I grew up in Brooklyn, New York, envious of the old farts who abandoned NYC for the warmth of Miami during winter. As I start to write this book, It’s mid-afternoon on December the 29th and no, it is not 6 degrees (C.) outside, it is 27 degrees and my fingers don’t feel as if they are going to fall off from pounding the keyboard in my study. Irving Berlin wrote in his introductory lyrics to “White Christmas” that he was yearning to be up north…..not me, my friends, I like being south – Bangkok is my Miami now that I am certifiably an old fart!
This year, the U.S. Congress didn’t screw up at all – how could they when they just didn’t do anything? Remember that ‘fiscal cliff’ warning of a few years back? It was as ultimately meaningless as the Y2K scare at the turn of the century. But there are financial problems out there; no one will deny that. And is there any coherent tax directional responsibility being taken by Congress or the President? In essence, no, thereby giving the IRS free reign to go where they have boldly never gone before, without anyone truly objecting. I don’t like much of what they are doing and seriously disagree with what they have enacted but will never disregard it – the law is the law is the law……and we’ve got to comply.
I will never retire! The word ‘retirement’ is simply not part of my vocabulary. I don’t look for the ‘orthodox’ type of tax work ‘business’, anymore – after 48 years of doing it, enough is enough! There are far, far better things to do with my life. Yet I feel like Al Pacino in Godfather 3: Just when I thought I could get out, they pull me back in.
I have no will power and continue to get involved in those ‘interesting’ IRS tax audits/cases that other professional firms turn down because of 'fear': the fear of getting involved in situations that were essentially without precedent; the fear, perhaps, of being sued for choosing an approach to take in that audit/tax case that, in retrospect, might not have been the wisest of approaches to take. Yes, you should work with a specialist – if you can find one. But if you have to do it yourself, go ahead and write to the IRS! My advice to you all: DON'T BE AFRAID! The IRS is empowered by Congress to collect revenues but it is not funded adequately by that same Congress that empowers them to do the funding. The sad fact of the matter is that the IRS is never to likely be funded to the extent it wished it was. Computer-generated letters are routinely sent by the IRS, assessing incorrect amounts. If you receive a letter from the IRS and it is wrong, then do not pay that assessment. Challenge the IRS: send them a response through registered mail, keeping that registered receipt (as well as a copy of what you send to the IRS - you'd be surprised how frequently I encounter clients who have kept neither and hence, cannot prove their compliance!). And be prepared to have to re-send that letter perhaps a few times prior to the IRS recognizing that you are asking the IRS to correct their errors. I seriously wonder if the IRS would ever let us know how much money they collect from correspondence that should never have been sent out in the first place. Patience and patience and patience: don't give in to the IRS if you are right and they are wrong - unless, of course, that incorrect assessment and penalty is so small that it is cheaper to pay than to be bothered by it! Let me add that if you are an overseas resident getting absolutely nowhere in your battles with the IRS and you remain convinced that you are correct, then write to the IRS Taxpayer Advocate Service – this is an IRS ombudsman there to assist you. Now I don’t guarantee (no one can guarantee anything about the IRS other than that they are trying to get money out of you by scaring you