TAXESUSA

2017 International Letter

 

International tax services

January 30, 2017

 

Hello to all,

For the past several years we have been telling you that there have been no significant changes to the Tax Code. While this may change dramatically in 2017, there are only two modifications this time that will affect many of you when filing your 2016 tax return.

First, due to widespread identity theft and the filing of a great number of fraudulent tax returns in the past few years, the IRS is taking more firm measures to insure that tax returns are being filed and refunds issued to legitimate taxpayers. This will call for greater identity verification on our part especially when child tax credit refunds are claimed. For that reason, we may be required to request more information from you than we have in the past.

Second, Congress has changed the due date for filing of the Foreign Bank Accounts Report. The FBAR filing deadline has been moved forward from 30 June to 15 April to coincide with the tax filing deadline. The legislation also allowed a maximum six month extension, and to implement the statute with minimal burden to all concerned, filers failing to meet the FBAR due date will be granted an automatic extension to October 15. Accordingly, specific requests for this extension will not be required. Therefore, in effect, FBAR filers have been given an additional three-and-a-half months to file their 2016 FBARs.

We are now available to receive your 2016 tax information. You may mail us your information, fax it, or attach it to an e-mail. However, if you use an e-mail attachment, you should mask all social security numbers for data security reasons

Our objective is to make your tax filing experience as effortless as possible. We remain committed to value and excellence when it comes to preparing your individual tax return. We’re willing to stake our reputation on this fact. That’s why we guarantee our work. Thanks for placing your trust in us. We look forward to assisting you in 2017.


Sincerely,

NATP Members

M + M Denney

Marianne & Michael Denney

 


2016 Exchange Rates: The exchange rate for converting Euros to dollars for U.S. tax return purposes is 0.940 for 2016. Go to this link to get the official 2016 and prior year rates for other currencies:

https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates

The exchange rate for converting Euros to dollars for FBAR purposes (See Page 4 for more on FBAR reporting) is the rate on the last day of 2016 which was 0.9490. To get dollars divide Euros by the rates above. See more exchange rates on our web site.

2016 Foreign Earned Income Exclusion Limitation: $101,300.

2016 Exemption amount: $4,050.

2016 Standard Deduction amounts:

  • Married Filing Jointly: $12,600.
  • Single and Married Filing Separately: $6,300.
  • Head of Household: $9,300.
  • 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 including foreign social security and pension benefits must be reported. The IRS considers a person 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 oblige professional tax preparers to ensure the accuracy of all information reported on a client’s tax return. This may call for 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 copies of income reporting documents from employers, banks and brokerage firms. If you file a foreign tax declaration we must see a copy of that document and the foreign tax assessment such as the German Bescheid as well.

    Let us know when you are ready to collect information for your 2016 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 2016 for any purpose. Indicate the number of days during each trip you were there for business.