New Tax Requirements for US Expats: What You Need to Know in 2024

As the 2024 tax season begins, staying updated on the latest tax requirements is crucial for US expats. Each year brings adjustments to tax laws that can impact how you file, qualify for deductions, and comply with reporting requirements. Expatriate Tax Returns is here to help you navigate these updates and maximize your tax benefits.

1. Increased Foreign Earned Income Exclusion (FEIE) Threshold

This year, the Foreign Earned Income Exclusion (FEIE) threshold has increased to $120,000, allowing expats to exclude a greater portion of foreign income from US taxes. Expatriate Tax Returns helps expats understand the requirements for qualifying for the FEIE, whether through the Bona Fide Residence Test or Physical Presence Test, ensuring you’re taking full advantage of this valuable exclusion.

2. Changes to the Foreign Tax Credit (FTC)

The Foreign Tax Credit (FTC) remains essential for expats in high-tax countries, providing a dollar-for-dollar tax reduction based on foreign taxes paid. Expatriate Tax Returns offers guidance on documenting foreign tax payments and strategizing the optimal use of the FTC alongside the FEIE to minimize double taxation on your income.

3. Enhanced Reporting Requirements for Cryptocurrency Holdings

US expats with cryptocurrency investments must now meet stricter reporting guidelines, including disclosing earnings on Form 8938. Expatriate Tax Returns can assist you in understanding and meeting these requirements, ensuring compliance while helping you avoid penalties.

4. Mandatory Filing for Foreign Bank Accounts Over $10,000

If the total balance of your foreign bank accounts exceeds $10,000, the IRS requires you to file the Foreign Bank Account Report (FBAR) annually. Expatriate Tax Returns emphasizes the importance of compliance, as missing the FBAR can result in substantial penalties. We provide expert support in preparing Form 8938 and related documents to keep you on track.

5. New Focus on Passive Foreign Investment Companies (PFICs)

For expats with investments in foreign mutual funds or other Passive Foreign Investment Companies (PFICs), the IRS has intensified its scrutiny. Expatriate Tax Returns offers specialized assistance with PFIC reporting, helping you avoid errors on Form 8621 that could lead to high tax liabilities. Our team ensures that your PFICs are reported accurately and in compliance with IRS rules.

6. Expanded Implications of the Global Intangible Low-Taxed Income (GILTI) Tax

The GILTI tax affects US expats with ownership stakes in Controlled Foreign Corporations (CFCs). Expatriate Tax Returns provides guidance on managing GILTI tax exposure, from adjusting ownership stakes to exploring restructuring options that reduce your overall tax burden.

How Expatriate Tax Returns Can Help You Stay Compliant

Understanding these new requirements and taking action can be challenging, but Expatriate Tax Returns is here to simplify the process. Our team of experts helps US expats manage complex tax situations, offering support with tax planning, documentation, and filing.

Whether you need help with a specific filing requirement or want to explore strategies for reducing your tax burden, Expatriate Tax Returns has the expertise to make your 2024 tax season seamless. Contact us today to learn more about how we can help you navigate these changes and optimize your expat tax filing experience.