Returning To The U.S? Here’s How Your Taxes Are Effected

Returning to the United States after living abroad, especially for late periods of time is monumental. Your tax returns are probably not the first things that come to mind however they should be the first things you consider getting the latest information. Moving back to the United States can have a huge impact on your tax returns.

The date of your arrival will determine the status of your residency. If U.S citizen or green card holder is filing taxes and living in the United States by Tax Day, April 18th then you are no longer considered a U.S. expat for tax purposes. This means it will be very important for you to file by that date.

Documents You Need

It is important for you to start gathering documents now prior to the deadline to give to your accountant. There are several things to gather when you start returning to the U.S.

Moving Cost Information

  • If you received reimbursement from your employer for your cost of moving then it will be taxed unless you file Form 3903 for your deductibles.

Sold Property

  • Any foreign property that has been sold before your arrival date in the United States will require information to be disclosed with it:
  • Date you purchased home
  • Cost to purchase home
  • Date the home was sold
  • The amount you sold the home for
  • Any expenses paid when purchasing and selling the home.
  • If it has been more than 2 years since you purchased the home then you are required to inform why you decided to move back to the United States. These reasons can include job loss, job change, job gain, or personal reason.

Missing The Deadline

Returning to the United States could be a monumental transition. What can possibly happen, if you are moving close to the deadline date for filing (April 18th), is that you don’t realize in time that you have to file by that date. One of the reasons it is important to stay one top of your tax obligations is that you can be penalized for not paying taxes timely. Interest accuses for all tax payers when not paid by the April deadline. This rule does not matter on the location of your residency if you are a U.S. citizen. However, the likelihood of getting the penalties removed can be removed if you have showed a history of paying taxes in a timely manner.

Deductions and Credits

Repatriating to the United States does not change your qualifications for deductions and credits you have used prior as an expatriate. These include:

Foreign Earned Income Exclusion

Use of this exclusion is limited to the time period that you were living outside the US on income earned outside the US. You can continue to use this when you arrive back in the United States but not after.

Foreign Tax Credit

Foreign tax credits are always able to be used against foreign income no matter where you live. However, the treaty won’t apply if you earned the income as U.S. resident.

Foreign Bank Accounts

If you still have foreign bank accounts then there is a difference when it comes to FACTA when reporting within the United States. On the other hand, FBAR remains the same.

  • FACTA Form 8938 – Filing threshold changes from $300,000 ($600,00 for married filing jointly) in aggregate balances to $75,000 ($150,000 for married filing jointly) in aggregate balances once you return to the US.

Information About Foreign Spouse and Children

Perhaps you are returning to the United States with a foreign spouse and children. If so, then there are things you want to know and do as soon as you can when you arrive:

  1. Foreign spouses and children must apply for a Social Security Number (SSN) or ITIN. This depends on the type of visa they used to enter into the United States.
  2. This goes for foreign born children that are citizen by birth that have never gotten SSNs either.

Get Help Now!

Here at Americas Tax Firm we are dedicated towards helping you in your tax situation. Get help today from a licensed professional to guide you through your next tax return.