January 20, 2014
Dear Valued Client,
Again there has been much talk of the fiscal cliff and big modifications to the United States Tax Code, but when the smoke cleared, little had changed. There are some new taxes as part of the Affordable Care Act, better known as Obama care, but these only apply to individuals earning more than $125,000. The biggest change affecting overseas U.S. tax filers is that the FBAR or report of foreign accounts must now be filed electronically. See the next page for more about this important filing obligation.
Since there was some inflation in 2013, the standard deduction and exemption amounts have increased. For those of you with capital gains, the low rates remained in effect. The foreign earned income exclusion limit increased by $2,500 to $97,600, and the child tax credit will continue to be paid.
Again we are offering federal and state electronic filing as well as assistance in filing your report of foreign accounts. We continue to accept VAT tax relief forms.
We are now available to prepare your 2013 U.S. tax returns. You may mail, fax or e-mail us your tax information. We have included a mailing label for you to use. If you want your completed tax return mailed back to you, be sure we know your economy address.
We no longer have an office in either Mannheim or Heidelberg. Instead we will be available three times this year at the NH Hotel Mannheim/Viernheim located in Viernheim next to Rhein-Neckar Zentrum on the following dates: 18-19 February, 11-12 March, and 1-2 April. (You can find directions on our web site.)
Like last year you must make an appointment. You may schedule your appointment by calling us at 0171-2612742 or by sending an e-mail to firstname.lastname@example.org.
Our objective is to make your tax filing experience as quick and easy as possible. We remain committed to value and excellence when it comes to preparing your tax return. We’re willing to stake our reputation on it. That’s why we guarantee our work! Thanks for placing your trust in us last year. We look forward to serving you this year.
2013 Exchange Rate: The exchange rate for converting Euros to dollars for U.S. tax return purposes is 0.783. To get dollars divide Euros by the rate amount. See more exchange rates on our web site.
2013 Foreign Earned Income Exclusion Limitation: $97,600.
2013 Exemption amount: $3,900.
2013 Standard Deduction amounts:
Married Filing Jointly: $12,200.
Single and Married Filing Separately: $6,100.
Head of Household: $8,950.
All U.S. citizens and resident aliens (Green Card holders) must report their worldwide income to the IRS. If you file jointly with a foreign spouse, your spouse’s foreign income to include foreign social security and pension benefits must be reported. The IRS considers you to have a Green Card, even if it has expired. To be free of a U.S. tax obligation, the Green Card must be surrendered at a U.S. embassy or consulate or upon entry into the U.S. and a final report filed with the Department of Homeland Security and the IRS.
IRS due diligence rules expect professional tax preparers to verify the accuracy of all information reported on a client’s tax return. This may require you to provide more documentation than you have supplied in the past. We can no longer accept listings of income items such as wages and investment income. We will now require originals or copies of income reporting documents from employers, banks and brokerage firms. If you file a foreign tax declaration we may need to see a copy of that and the German Bescheid or other final foreign tax assessment as well.
Let us know when you are ready to start collecting information you will need to prepare your 2013 tax return. We can provide a list that will make it easier to find all of the documents needed. Also tell us about any change in address, marital status or employer as well as name, date of birth and social security number for any additions to your family. If you claim the foreign earned income exclusion, list the dates of all travel to and from the U.S. in 2013 for business or pleasure. Please indicate the number of days during each trip you were there for business.
Marianne & Michael Denney