Author Topic: Changes that affect us?  (Read 471 times)

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Offline MPI

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Changes that affect us?
« on: December 13, 2017, 01:09:36 PM »
On one of the expat facebook groups I'm in there have been a number of references to 'changes in the tax plan' that affect US emigrants.  I haven't seen any mention of it here after a brief browse but perhaps I am missing it or looking in the wrong section.  Or maybe the changes are for people with a more complicated situation than most?

For example, I earn way less than I need to in order to owe the US government money, so my understanding is that I need to file in April anyway just so they can confirm I don't owe anything.  I also have a small US student loan on an income based repayment plan.  I haven't been able to find any details about either of these changing but was hoping that someone who is more informed knows what these changes for us are, that I've seen others discussing.
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Offline Kelly85

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Re: Changes that affect us?
« Reply #1 on: December 13, 2017, 03:36:21 PM »
Assuming your income is over the same filing thresholds that would apply to those living in the U.S.*, yes you need to file even if you take the FEIE and/or foreign tax credits and those make your U.S. liability zero.

*If your income is truly below those amounts (unlikely unless you're dependent on a spouse or someone else) then you don't need to file.

Offline MPI

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Re: Changes that affect us?
« Reply #2 on: December 13, 2017, 03:53:40 PM »
Assuming your income is over the same filing thresholds that would apply to those living in the U.S.*, yes you need to file even if you take the FEIE and/or foreign tax credits and those make your U.S. liability zero.

*If your income is truly below those amounts (unlikely unless you're dependent on a spouse or someone else) then you don't need to file.

As I said, I  know I have to file, I just also know as things stand I won't owe anything. What I am asking is if anyone knows what changes these people were referring to.
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Offline durhamlad

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Re: Changes that affect us?
« Reply #3 on: December 13, 2017, 04:14:42 PM »
As I said, I  know I have to file, I just also know as things stand I won't owe anything. What I am asking is if anyone knows what changes these people were referring to.

They have promised a bill by Christmas so it shouldn’t be much longer before there is certainty rather than speculation while they merge the 2 different proposals.
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Offline theOAP

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Re: Changes that affect us?
« Reply #4 on: December 14, 2017, 09:53:47 AM »
Every taxpayer's return will change, including expats, but the question is will the bottom line change.

For most expats, the bottom line will likely remain as is (no tax due), but as always, a few individual expats may/will have new issues to deal with (based on areas where the House and Senate Bills contain similar proposals). Those new issues are not necessarily limited to higher earners.
« Last Edit: December 14, 2017, 09:55:47 AM by theOAP »

Offline MPI

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Re: Changes that affect us?
« Reply #5 on: December 17, 2017, 08:07:24 AM »
The NY Times posted a list of changes.  Does the 'one time repatriation tax' refer to companies or individuals?

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Offline durhamlad

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Re: Changes that affect us?
« Reply #6 on: December 17, 2017, 08:20:23 AM »
The NY Times posted a list of changes.  Does the 'one time repatriation tax' refer to companies or individuals?

I believe it applies to companies.

http://uk.businessinsider.com/trump-tax-plan-repatriation-taxes-2017-11

Quote
The bill includes a one-time repatriation tax, which is designed to incentivize US-based companies that do business overseas to bring those profits back stateside.

In other words, the repatriation tax could lead to internationally-held cash flooding back into the US.

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Offline MPI

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Re: Changes that affect us?
« Reply #7 on: December 17, 2017, 08:43:26 AM »
Thanks.  The wording on other foreign things specified companies but this was unclear.

Not that I want to go back or anything.. 
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Offline theOAP

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Re: Changes that affect us?
« Reply #8 on: December 17, 2017, 10:07:17 AM »
Does the 'one time repatriation tax' refer to companies or individuals?
The issue you're referring to is still unclear, even after the release of the text.

The intention is for the large corporations only, but, according to some North American tax experts, the wording (and Sections of the Code referenced) MAY apply to individuals with a 10% share or more in a CFC. If so, some in the UK would have a problem (14%/7% on P&E going back to 1986).

It's really unclear: it may be a storm in a tea cup; the committee knew about it but didn't clarify; it may be corrected (if accurate) in later clean up legislation; how will the IRS react to those who just ignore it; and on and on.

There's no definitive answer at this time.