ATTENTION: All American Expats
Please visit http://americansabroad.org/files/6513/6370/3681/finalsubrbtmarch2013.pdf urgently. It is a pdf file, there is no virus.
American Citizens Abroad (ACA) fights for the rights of Americans abroad, and they have been working very hard to make life fair and easier for those of us overseas. If you are not familiar with a lot of the crap going on, join the club. If you have a chance, look over the ACA website at americansabroad.org/ and understand their mission and goals. I support them and I hope that you will also as they are doing a lot of things behind the scenes to help all of us.
Currently on the plate are a couple of things that need your urgent attention. The first one is the pdf file above. The letters are due on or before April 15th. This proposal from ACA is change the current tax situation for those of us living overseas. Right now as you may know you have to file income tax forms every year, including those pesky FBARs that you may not even be aware of. If you have income in Taiwan you have to file even if you owe no tax, if you are self-employed and the income is from Taiwan you still have to claim it and be taxed on it as self-employment income is taxable worldwide. The US is one of the only countries in the world that taxes its citizens outside the country. The proposal above is to change citizen-based taxation rules to residency-based taxation rules, which would eliminate many of the issues for us.
The second issue that needs serious attention is this new stupid law called FATCA! This ridiculous and unfair tax law needs to be repealed. :fume: If you do not know what FATCA is Google it, for many people this may have absolutely no impact on your life, but for many it is a serious problem. This law would allow the IRS to know every account you have in Taiwan or in other countries because all banks will be required to report all American citizens with foreign bank accounts to the IRS, and regardless if you are hiding anything or not it doesn’t matter. Many banks have already started denying American Citizens accounts overseas because they do not want the hassle of FATCA. In Taiwan I have not heard of any cases yet, but it may eventually happen. FATCA is a horrible law that will increase tax exposure to double taxation, loss of job opportunities, closure of accounts, insurance policies, etc. In addition FATCA threatens to expose your personal financial information to governments worldwide and lead to higher taxes. This is a serious problem that needs your attention. An article just a few days ago, found here: http://www.tax-news.com/news/Taiwan_US_To_Negotiate_FATCA_Agreement____60354.html will explain why your attention is needed now. I have already written a letter to the FSC in Taiwan and will be writing another letter shortly, if you want you can write letters to them also, what good it will do, well, it’s all political probably, but still you can voice your disapproval to the FSC. In addition to write your congressmen to tell them FATCA is bad. Another website that explains in more depth the problems and more articles are here: http://www.repealfatca.com/. FATCA may never take hold and many of us are pushing for a repeal of it, but it could still be put into practice on January 1, 2014 if it is not stopped soon. Only a handful of countries have complied, but more may in the near future. Nothing is known at this time.
Some things you need to be aware of in addition to this stuff above.
- If you have not been filing income tax forms, even if you do not owe money, you need to start thinking about doing it.
- If you have unreported income from Taiwan you might need to consider how to fix your compliance issues before FATCA takes hold. Ask an accountant.
- If you have had more than US$10,000 in Taiwan banks, and it doesn’t matter if it is NTD, USD, CAD, EURO, etc. it needs to be reported on an FBAR every year! That is US$10,000 in aggregate not per account. So if you have five accounts in Taiwan 1. US$2000 2. NT$5000 3. NT$50,000 4. NT$250,000 and 5. EUR$2000 you have to file an FBAR because your total is over US$10,000. I believe it was tax year 2008 until now that you mainly need to be concerned about, but I could be wrong if someone has the information please post it. FBAR has been on the books since the 70’s but was never enforced until recent years. The penalties for not filing FBARs is US$10,000 per year I believe. :fume: Yes, it is ridiculous!
If you have questions I can attempt to answer them, but a good CPA might be a good choice as many local accountants in the US have no idea about the forms required by the IRS just for living overseas.
For now, please pay attention to that pdf file and if you care, send the letter to the International Tax Reform Working Group before April 15. This is very urgent! There is a word document on the ACA website also with a link from here and how to address the email: http://americansabroad.org/issues/taxation/have-your-say-tax-reform/