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U.S Taxes (IRS)
 
(11/06/09)

The IRS has created a comprehensive tax page designed to help U.S. citizens living abroad. On it, you can find basic tax information that Americans overseas need to know and also includes links to more detailed topics such as the foreign earned income exclusion, foreign tax credit, reporting foreign bank accounts, fulbright grants, state taxes, and a myriad of others.  The site also provides information on how to contact the IRS to get additional assistance.

Notifying U.S. Citizens Abroad:

The IRS is hosting an Internal Revenue Service Webinar on Reporting of Foreign Financial Accounts on the Electronic FBAR, on Wednesday, June 4, 2014.  Information for filers about the filing requirement is available on the IRS website:  IRS Reminds Those with Foreign Assets of U.S. Tax Obligations. Links:

- Internal Revenue Service Webinar on Reporting of Foreign Financial Accounts on the Electronic FBAR.

- IRS Reminds Those with Foreign Assets of U.S. Tax Obligations.

 

Foreign Account Tax Compliance Act (FACTA)

Under FATCA, U.S. taxpayers holding certain financial assets outside the United States must report those assets to the IRS. In addition, FATCA will also require foreign financial institutions to report directly to the IRS information about certain financial transactions carried out by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. According to IRS public information, implementation of many of FATCA’s provisions related to foreign financial entity reporting requirements has been postponed to January 1, 2014. For authoritative information please refer to the IRS website, found here. Information about the timeline for implementation can be found here.

Americans should also consider consulting with a U.S. tax professional for advice on the effect of this law.

New IRS Form for Overseas Taxpayer

The Form 8938 (Statement of Specified Foreign Financial Assets) should be filed by taxpayers with specific types and amounts of foreign financial assets or foreign accounts. It is important for taxpayers to determine whether they are subject to this new requirement because the
law imposes significant penalties for failing to comply.

Form 8938, the instructions, regulations implementing this new
foreign asset report, and other information to help taxpayers
determine if they are required to file Form 8938 is available
on the web at: http://www.irs.gov/Businesses/Corporations/FATCA-Information-for-Individuals

I am a U.S. Citizen living overseas, do I need to file a U.S. tax return?

Yes, most U.S. Citizens must report their worldwide income on their U.S. tax return (minimum income levels apply as determined by filing status). This also applies to those people who are self-employed and earn a net-profit of US$400 or more as they are subject to social security and medical taxes. In many instances, you will qualify to claim an exclusion of up to US$70,000 for your foreign earned income; however, you must file a return to claim the exclusion. You also may be entitled to a credit for taxes paid to a foreign government, but you must file a return to claim this credit.

What if I haven't filed tax returns recently?

You are required to file a tax return for any year that your income exceeds minimum filing levels. Contact the IRS to bring your accounts up to date. If you owe back taxes and are unable to pay in full, the IRS offers installment payment arrangements and considers offers-in-compromise to satisfy a tax liability. Taxpayers who come forward, make a true voluntary disclosure, and file an accurate return, will not be prosecuted. For more information or filing assistance, please contact the IRS.

When am I required to file my tax return?

  • U.S. Citizens - 15 April
  • U.S. Citizens living overseas - 15 June (please attach form 4868 to your tax return explaining your residence outside of the U.S.)
  • Non-resident Aliens with U.S. wage income - 15 April
  • Non-resident Aliens with no U.S. wage income - 15 June

Additional extensions are available by filing form 4868 for extensions.

How do I contact the IRS? 

How do I obtain IRS forms?

Could you please advise the tax exchange rate?

For the year ended 31 December 2013 the exchange rate was:

  • USD/NZD - 1.2195
  • NZD/USD- .8200

For the year ended 31 December 2012 the exchange rate was:

  • USD/NZD - 1.2349
  • NZD/USD- .8099

For the Year ended 31 December 2011 the exchange rate was:

  • NZ$  to US$ = 0.7916
  • US$  to NZ$ = 1.2648

For the Year ended 31 December 2010 the exchange rate was:

  • NZ$  to US$ = 0.72192
  • US$  to NZ$ = 1.38822

For the Year ended 31 December 2009 the exchange rate was:

  • NZ$ to US$ = 0.6356
  • US$ to NZ$ = 1.5989

For the Year ended 31 December 2008 the exchange rate was:

  • NZ$ to US$ = 0.7146
  • US$ to NZ$ = 1.4250

For the Year ended 31 December 2007 the exchange rate was:

  • NZ$ to US$ = 0.7365
  • US$ to NZ$ = 1.3620

For the Year ended 31 December 2006 the exchange rate is:

  • NZ$ to US$ = 0.6492
  • US$ to NZ$ = 1.5403

Are there U.S. tax specialists in New Zealand?

U.S. tax specialists in New Zealand

What is an Individual Tax Identification Number (ITIN)? How do I apply for it?

An Individual Tax Identification Number (ITIN) is used by persons who are not U.S. citizens/nationals or permanent residents (these people have Social Security numbers).

You may apply for an ITIN by completing a W-7 form and attaching a certified copy of your identification, e.g. current passport. 

If you still have tax questions, please contact the Internal Revenue Service (IRS) Service Center in Philadelphia on +1 215 516 2000+1 215 516 2000 . The Service Center is open 20 hours a day, from 6.00am to 2.00am (U.S. Eastern standard time).

Is there a tax treaty/convention between New Zealand and the United States? 

IRS Free File

The Internal Revenue Service (IRS) advises that U.S. citizens and resident aliens living outside the United States can use IRS Free File to prepare and file their federal tax returns electronically.

IRS Free File is brand-name software that is offered exclusively at IRS.gov, through a partnership with the tax software industry.

There are five companies that accept foreign addresses.  Taxpayers should review the list of tax forms supported by the company to ensure it meets their needs, especially Form 1116, Foreign Tax Credit, and/or Form 2555, Foreign Earned Income.

To be eligible, taxpayers' adjusted gross income in 2010 must be $58,000 or less.  Some overseas taxpayers may exclude $91,500 of their 2010 foreign earnings, which would make more people eligible for IRS Free File.

Free File software generally asks questions and taxpayers supply the answers.  The software completes the proper tax forms, does the math, and allows for free electronic filing through IRS e-file.  By filing electronically, taxpayers due refunds and who have U.S. bank accounts can opt for direct deposit and get their refunds in as few as 10 days.

To get started with IRS Free File, go to www.irs.gov/freefile and select "Pick a Free File Company."

Taxpayers with an Adjusted Gross Income (AGI) over $58,000 can efile their returns by purchasing online software.  Check the software provider's information to ensure that it can accommodate a foreign address.

New IRS Form for Overseas Taxpayer

The Form 8938 (Statement of Specified
Foreign Financial Assets) should be filed by taxpayers with
specific types and amounts of foreign financial assets or
foreign accounts. It is important for taxpayers to determine
whether they are subject to this new requirement because the
law imposes significant penalties for failing to comply.

Form 8938, the instructions, regulations implementing this new
foreign asset report, and other information to help taxpayers
determine if they are required to file Form 8938 is available
on the web at:
http://www.irs.gov/businesses/corporations/article/0,,id=23666

 

Combating Fraud

  • Combating Fraud, Waste and Abuse in Federal Tax Administration

    The Treasury Inspector General for Tax Administration (TIGTA) is responsible for oversight of IRS activities and for maintaining integrity in the U.S. Federal tax system.  Fraud, waste, and abuse in Federal tax administration are unfair to all U.S. taxpayers and can take a variety of forms.  TIGTA’s oversight includes targeted audits, programmatic inspections and evaluations, and both criminal and administrative investigations of potential fraud, waste, and abuse.  Examples include:

    • Attempts by taxpayers to bribe IRS personnel;
    • Assaults or threats by taxpayers against IRS employees or facilities;
    • Theft of IRS tax remittances;
    • Impersonation of the IRS organization or IRS personnel in schemes involving the Internet or the mail to obtain personal financial information;
    • IRS employees who misuse their position for personal gain;
    • Outside contractors defrauding the IRS through false claims, deceptive contract methods, and other fraud;
    • Circumstances that could impede or hinder compliance with Federal tax laws and regulations; and,
    • Apparent abuses of taxpayer protection and rights.

    Please report any information that you may have related to potential fraud, waste, and abuse to the TIGTA Hotline at http://www.treasury.gov.

    More information can be found at:

    http://travel.state.gov/travel/living/living_1234.html

Consulate General Auckland

  • The Consulate General in Auckland provides all U.S. consular services in New Zealand:  The Embassy in Wellington is unable to provide consular services.