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Is the he recent crackdown of IRS on foreign accounts a reason to worry? Surely it is! The proactive IRS leaves no room for US expats settled anywhere in the world. So the wise thing an expat should do is to FOLLOW THE RULES. The expats who rigidly followed IRS are said to have found the treatment meted out by IRS as fairly forgiving when it comes to reducing the expat's tax to zero via the foreign earned income exclusion and the foreign tax credit. How can I qualify for tax exclusion? To qualify for the foreign earned income exclusion, the US expat must have a tax home in one or more foreign countries. You must also meet one of the two conditions: 1. Be a bona fide resident of a foreign country for a period that includes the particular day and a full tax year, or 2. Be outside the USA for any 330 of any consecutive 365 days that include the particular day. An American expat is a bona fide resident of a foreign country if he/she is legally entitled (under that country's law) to live there, and in reality lives there. But If the expat holds a visa that prohibits residency, he or she isn’t a bona fide resident. Foreign Tax Credit: In addition to the exclusion, American expats can also claim a credit for foreign income taxes. Individual income tax rates in many countries are much higher than the corresponding US tax rates. What's on the plate for you? File at the right time before the IRS come calling. Don’t forget to claim your foreign earned income or foreign tax credit. Keep your income tax in the USA to a low level. File the TDF form. And last but not the least, get the professional help you need at the right time from the right place. For a US expat settled in Australia, United States Australia Tax Service is just one call away. Our experienced and well versed attorneys are well equipped Expat Tax Australia Services and Individual Tax Services. We assist expatriates, individuals, and businesses in Australia, USA and New Zealand in tax planning, consulting, and returns preparation. Our Individual Tax Service usautax.com has been helping expats reduce their international tax bills. If you find yourself in a tax related difficult situation, rest assured that we’ll be able to bring you up to full compliance in the eyes of the Internal Revenue Service or IRS. Contact us today by clicking usautax.com or call at +61 (8) 8120-0730. We serve clients all over Australia and the United States of America from offices in Adelaide, Sydney, Los Angeles and California. About the Author Thomas M Carden EA JSM Thomas is a director at United States Australia Tax Service. USAUTAX.COM He is enrolled to practice before the Internal Revenue Service. He has over 17 years of Tax and Financial Industry experience. If you have any questions or you are looking for Expat Tax Australia Services or Individual Tax Services then feel free to contact him at THOMAS@USAUTAX.COM
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