2018 International Letter


International tax services

31 January 2018


Hello to all,

We expected significant changes to the United States Tax Code in 2017, but those changes came late in the year and were not retroactive to the 2017 tax year. There will be dramatic changes in 2018, but it is too early to tell what those changes will mean for individual U.S. tax filers living overseas. For these reasons, our letter for this year will be briefer than in the past. We intend to send you more information concerning 2018 tax law changes once the Internal Revenue Service has published new guidance.

Since Congress failed to repeal the Affordable Care Act, tax provisions in that bill remain in force. You must still have health insurance or pay a penalty. This applies to those residing in the United States and U.S. military members and government employees overseas with SOFA status; however, American expatriates are exempt from this provision. The 3.8 percent Net Investment Income Tax on investment and rental income for high earners is also still in force.

As before, 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 stronger measures to insure that tax returns are being filed and refunds issued to legitimate taxpayers. This will call for greater identity, income and deduction verification on our part.

The due date for filing the FBAR is 17 April 2018, but a six-month extension to 15 October is automatically granted. Be aware that the FBAR form has been revised.> A PDF copy of the FBAR you filed last year cannot be used as a template to complete your 2017 FBAR. You must download and complete a new, revised Form 114.

We are now available to receive your 2017 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. Thanks for placing your trust in us. We look forward to assisting you in 2018.


NATP Members

M + M Denney

Marianne & Michael Denney


2017 Exchange Rates: The average exchange rate for converting Euros to dollars for U.S. tax return purposes is 0.923 for 2017. Go to this link to get the official 2017 and prior year tax filing average rates for other currencies:

The exchange rate for converting Euros to dollars for FBAR purposes (See Page 3 for more on FBAR reporting) is the rate on the last day of 2017 which was 0.8330. To get dollars divide Euros by the rates above. See more exchange rates on our web site.

2017 Foreign Earned Income Exclusion Limitation: $102,100.
2017 Exemption amount: $4,050 (Unchanged from 2016).
2017 Standard Deduction amounts:
  • Married Filing Jointly: $12,700.
  • Single and Married Filing Separately: $6,350.
  • Head of Household: $9,350.
  • 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 require 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 2017 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 2017 for any purpose. Indicate the number of days during each trip you were there for business.