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Affordable, expat friendly tax software.
www.myexpattaxes.com
Current as of February 4 2021 for Fulbright Tax Webinar
Stimulus Payments & Expat Tax 101
Presented by Nathalie Goldstein, CEO
Hi, nice to meet you!
Nathalie Goldstein, MSc & EA
CEO & Co-Founder of MyExpatTaxes
• From California, based in Vienna, Austria
• Background:
• Finance & Information Technology
• Specializes in U.S. Expat Taxation
• Creator of MyExpatTaxes – the leading US Expat Tax
Software trusted by thousands of expats worldwide
© 2021 MyExpatTaxes
Fulbright & US Taxation
The Fulbright Perspective The IRS Perspective
“Fulbright grants are subject to U.S. income “…amounts paid to United States Citizens
taxes. However, neither the Institute of for lecturing or teaching abroad.. are
International Education nor the Department of compensation for services rendered and are
State are required to issue a 1099 or W2, nor includible in their gross income under
to withhold taxes from grant payments.” section 61 of the Code.”
What does that mean for you?
• No documentation – you will need to calculate your own gross income
• Fulbright grants fall into two categories – which one is yours?
Scholarship or Fellowship Income Compensation for Personal Services i.e. Wages
(most common for Students) (most common for Teaching Assistants)
© 2021 MyExpatTaxes
MyExpatTaxes provides award-winning
US expat tax software
Calculates best expat tax benefits
File in 30 minutes or less instantly including global tax treaties
Awarded Best Expat
DIY SW costs 149 euro Tax Management Platform & more
Worldwide Tax Partnerships
Ability to talk to a tax professional
Get 33% off the 1 Year of DIY
Tax Software
MyExpatTaxes provides electronic filing for the majority of 2020 Expat Tax Returns 99 euro instead of 149 euro
(married with NRA spouse, tax treaties, PFICs, etc.) FulbrightAT2021
© 2021 MyExpatTaxes
What we will cover
CARES
CARES Update
Update
Everything
Everything about
about the
the 2nd
2nd Payment
Payment
•• The
The Recovery
Recovery Rebate
Rebate Credit
Credit
New
New Tax
Tax Season
Season Changes
Changes
•• Do
Do you
you need
need to
to file?
file?
•• Filing
Filing deadlines
deadlines
•• Tips
Tips for
for reporting
reporting Fulbright
Fulbright Income
Income
©©2021
2021MyExpatTaxes
MyExpatTaxes
© 2021 MyExpatTaxes
The New Coronavirus Relief Package
Enacted in December 2020 for the 2nd round of Stimulus Payments
Key terms to know
• Who: Americans Abroad
All US Citizens living/working/retired outside of the US, who may or may NOT be filing US taxes every year.
• What: Economic Impact Payment or Recovery Rebate Credit (IRS Official Term)
Stimulus Payments that every American (or lawful resident) should receive if they meet the eligibility
requirements.
1st Round: $1,200 per taxpayer + $500 per qualifying dependent
2nd Round: $600 per taxpayer + $600 per qualifying dependent
• Need: Valid Social Security Numbers
Tax identification number for U.S. Citizens and lawful residents
• Cannot be: Dependent of Another Filer
Has a parent or guardian planning to claim you on their tax return? Check with them now!!!
© 2021 MyExpatTaxes
Same Eligibility Rules
Do Economic Impact Payments extend to Americans Abroad?
• The Three Checks
Claimed as a Income
Valid SSN?
dependent? Thresholds?
• Required: Valid SSN (not ITIN), Cannot be claimed as a Dependent, No Minimum Income Required
but there is a Maximum Income Threshold Limit
• Eligible even if you have $0 income & pay $0 US tax, but high earners may get reduced/no payments
• Do you need to file taxes to be eligible?
Yes. The IRS requires all taxpayers who need to back claim their Stimulus Payments to file
a 2020 Tax Return to calculate their Recovery Rebate Credit.
© 2021 MyExpatTaxes
How much is the payment?
Maximum amount of payments (1st/2nd Round Respectively):
● $1,200/$600 for individuals
● Filing Status: single, married filing separately, head of household, qualifying widow
● $2,400/$1,200 for joint filers
● Filing Status: married filing jointly
● Plus an additional $500/$600 per qualifying child
● Can be claimed as a dependent, is younger than 17 AND has a valid SSN by the due
date of your return including filing extensions
© 2021 MyExpatTaxesFiling Requirements for Americans Abroad
• Americans abroad are subject to the
same taxation laws as their family &
friends back home (check US passport)
• You have to file if your gross income is
over the tax filing threshold from ALL 2020 Filing Requirements
sources (US income + Non US income)
• Every year the filing requirements
change
• The current tax season is always the
year before (2020 tax season in year
2021)
Married to a Non US Citizen? Most likely you will be required to file as Married Filing Separately.
Self-Employed? You will need to file if you make more than $400 in net profit.
© 2021 MyExpatTaxesFederal Tax Filing deadlines
for Americans Abroad
Filing and Payment due (Automatic):
April 15, 2021 for payments
June 15, 2021 for filing
Filing Extension (with Form 4868):
October 15, 2021
Back Taxes:
ASAP to avoid penalties/interest if tax due
© 2021 MyExpatTaxesHow to get the Recovery Rebate Credit
1) Enter your Stimulus Payments (EIP Round 1 and 2) in MyExpatTaxes (or other tax software/firm)
2) Complete your 2020 Taxes to calculate your Adjusted Gross Income for eligibility
3) If you qualify, you will automatically see the Stimulus Payments as a REFUND on your tax return
© 2021 MyExpatTaxesYour First Year Abroad
• Gross income includes ALL income earned in the US and local country
• Between 01/01/2020 – 12/31/2020 before local taxes or expenses
• Recommended to claim Foreign Earned Income Exclusion
• Fulbright students tend to pay little to no income tax in local country
• Caution! To claim, you need to be physically abroad for 330 full days!
• You might need to file state taxes
© 2021 MyExpatTaxes
For personal reference only. Do not rely on this information solely to do your own taxes.Abroad for 330 Full Days?
Breaking it down:
• 330 Full Days Physically Present outside of the US
= total of max 35 (normal year) 36 (leap year) in the states
• 12-month consecutive period beginning/ending in tax year
= possible time frame of when you moved abroad (Summer 2020) to October 15, 2021 (with
filing extension… possibility for even later is available with special IRS permission)
• Went back to the states and worked during the holidays?
= US Earned income, not Foreign Earned Income
© 2021 MyExpatTaxes
For personal reference only. Do not rely on this information solely to do your own taxes.Q&A Break with
Affordable, expat friendly tax software with fast support and access to tax
professionals for tax review and questions
www.myexpattaxes.com
Get 33% off the 1 Year of DIY Tax Software Fee
(99 euro instead of 149 euro) : FulbrightAT2021
© 2021 MyExpatTaxesU.S. Expat Tax Forms
New Tax Reform: Easier for those at home, more difficult for expats abroad
Most Common Tax Forms
1040 Overview Form
1040s1 Report Additional Income & Adjustments
1040s2 Report Additional Taxes
1040s3 Report Tax Credits
8812 & Child Tax Credit Worksheet Claim up to $1,400 per qualifying child
2555 (2555ez discontinued) FEIE: Exclude up to $107,600 from U.S. Taxes
1116 FTC: Use Foreign Tax Credits
8833 Claim Tax Treaty Benefit
FBAR, Form 8938 Disclose Foreign Financial Accounts
For personal reference only. Do not rely on this information solely to do your own taxes. © 2021 MyExpatTaxesExpat Tax Benefits
Foreign Earned Income Foreign Tax Credit (FTC) Tax Treaty
Exclusion (FEIE)
What is it? Excludes up to $107,600 of Uses income taxes paid abroad Reduces or exempts
foreign earned income from to offset U.S. Taxes Owed income from U.S. Taxation
U.S. Taxation
Level of Difficulty to Claim Easy Difficult Difficult
Pros • Relatively straightforward for • Can claim Additional Child Tax • Prevents taxation on
those living abroad for more Credit non-taxed income
than 1 year • Can contribute to U.S. IRA abroad
• Great for low tax countries
Cons • Many limitations • Calculations can get very • Requires understanding
• Cannot claim Additional complex of legal language used in
Child Tax Credit • Requires additional AMT Tax Treaties
• Cannot contribute to U.S. IRA calculations
• Strict rules to revoke • Not ideal for low tax countries
For personal reference only. Do not rely on this information solely to do your own taxes. © 2021 MyExpatTaxesFATCA, FBAR, Form 8938
• FATCA = The Foreign Account Tax Compliance Act (US Federal Law)
• Double Reporting Requirement:
• Requires foreign financial institutions to report US related clients’ assets to the U.S. Department of the Treasury
• Required US taxpayers to report their foreign financial assets via FBAR and possibly also Form 8938
• FBAR = Foreign Bank Account Report (Form 114)
• Required if the MAX of all FOREIGN financial accounts COMBINED is over $10,000 at any point of the year
• Due April 15th with an automatic extension to October 15th available
• Submitted to Financial Crimes Enforcement Network, NOT the IRS (DO NOT attach to your Form 1040)
• Penalty for Willful -Failure to File FBAR: Up to the greater of $100,000, or 50% of the amount in the account at the time
• Form 8938 = Statement of Specified Financial Accounts
• Required if the total value of your specified foreign financial assets is more than $200,000* on the last day
of the tax year or more than $300,000* at any time during the tax year. (*if MFJ, amounts are doubled)
• Due with Federal Tax Return, sent to the IRS
• If you are required to file Form 8938 but do not file a complete and correct Form 8938 by the due date (including
extensions), you may be subject to a penalty of $10,000.
For personal reference only. Do not rely on this information solely to do your own taxes. © 2021 MyExpatTaxesFBAR: Calculate your Max
• An example situation:
• You have 3 bank accounts: 1 in the US, 2 in UK
• What to do:
1. Ignore any US accounts and instead only sum up total foreign financial accounts
2. Calculate the maximum (not ending) balance in the year for ALL accounts.
• i.e. UK Bank Account #1 Max = 5K GBP
• UK Bank Account #2 Max = 6K GBP
3. Add the maximum values together
• 5K + 6K = 11K GBP
4. Convert foreign money to USD to determine if they exceed $10,000.
• Remember: Once the total of the max of your accounts goes over $10,000 –
you’ll have to file an FBAR.
For personal reference only. Do not rely on this information solely to do your own taxes. © 2021 MyExpatTaxesNeed quick, easy and
affordable tax support?
MyExpatTaxes,
created by an expat for expats
support@myexpattaxes.com
Get 33% Off 1 Year Using: FulbrightAT2021
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