We hope you had a great year and have been able to handle your US tax challenges in the best way possible. We’re updating you on the current state of affairs regarding the US taxation of dual citizens. It has been a year with many developments for all Americans living Overseas.
The major tax overhaul proposed by president Trump has just been approved. We followed all developments in Washington very closely over the past months but unfortunately and to our surprise there was no mention at all of cancelling CBT (Citizen Based Taxation) despite lobbying efforts. The tax laws are now being finalised and we will update you on any impact for Americans living Overseas.
The media is starting to pay more attention and reports more regularly on the impact of the US tax laws on those living abroad. Renunciations keep rising according to the reports unfortunately due to the unchanged policies. Please make sure if you decide to renounce to follow the proper route otherwise you will still not be relieved from any tax obligations. Do note that renouncing is irreversible.
We received many complaints about the difficulties to obtain an SSN (social security number). Americans Overseas has communicated the problems to domestic politicians who in turn lobbied with the US. This amongst others has resulted in an easier and foremost much faster application proces to obtain an SSN.
The SSN is important for those who never filed US tax and want to apply for the streamlined procedure. The streamlined procedure is an amnesty program which ensures you can file for the first time without penalties. It is not clear when the US tax authorities will end the program. They have hinted at ending streamlined but have not followed through for now.
FATCA is still requiring all local banks to hand over all their US clients with a SSN. Banks were worried they will be penalised if they supplied incomplete files without an SSN. The banks would have had to start closing accounts of people who don’t have a Social Security Number next year. We have been lobbying with the banking organisation and politicians to avoid this.
The US authorities have given banks until 2020 to include the Social Security Number when reporting all their US clients Despite the prolonged period some banks are already cancelling (investment) accounts and mortgages. Please inform us if you have had a bad banking experience so we can help improve the service
Our advice is to start the SSN application as soon as possible to make sure that when your bank(s) starts asking for the number you can inform your bank (by showing the application forms) that you are in the process of obtaining one. We have lobbied to make the information provided from the banks much clearer. We found the letters that were sent unclear and the bank staff was often giving wrong information.
In most cases the US tax obligation is “only” a matter of filing paperwork. We see a very small percentage where the US tax law and local tax law lead to a conflict of potential double taxation. Double taxation means that you’re being taxed twice on the same income. Unfortunately it is not considered double taxation if your country doesn’t tax you on certain income while the US does.
If you think you’re being double taxed please let us know and we can help you apply with the proper government authorities who in turn can communicate with the US tax authorities potentially cancel out taxation from the US . (We only disclose information to the authorities with your express permission).
As always if you have any other questions feel free to call or email. Regardless if you’re not filing or are already filing your taxes (elsewhere), we’re glad to help.
To end the year on a lighter note we wanted to thank everyone for supporting us and liking our initiative 3000 times on Facebook! If you haven’t done so please click and like our Facebook page to stay up to date
We wish you a very merry Christmas and a happy new year!
Understanding the US tax system, the obligations, and all the additional terms can be difficult. Especially if one lives outside of America. Is your question not answered? Contact us.
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