I have some interesting tax news and resources to share with you this week, including:
- An IRS change that will make amending tax returns easier starting this summer,
- Slides from the IRS’ May 28th webinar on Tax Obligations of Americans Abroad, and
- An invitation to the Top 2019 Tax Filing Tips for Americans in Switzerland – June 18th webinar
Electronic Filing of Amended Tax Returns Coming this Summer
Form 1040-X is required to be filed by any US taxpayer who needs to correct an error or omission in a previously filed individual US tax return.
Amended tax returns are used by both US tax residents (US citizens and green card holders) and nonresident aliens. The IRS processes more than 3 million amended tax returns every year and, until now, the only way to file this form was on paper.
There are several disadvantages to paper filed tax returns over electronically filed returns:
- Paper tax returns can get lost in the mail, causing problems for the taxpayers who intended to file them, sometimes requiring multiple submissions,
- Due to mailing delays, especially when a tax return is mailed from a foreign country, the IRS may process a tax return late, which can result in difficult to challenge penalties and interest,
- It can take months, or even years, for the IRS to process a paper filed return,
- Paper filed tax returns are processed manually, which can lead to IRS processing errors with painful consequences and frequency, and
- It’s not just the IRS but also taxpayers who are more likely to make math or other errors in mailed-in tax returns. Electronically filed tax returns require using tax software, and tax software can alert the taxpayer of math errors or incomplete forms that need to be corrected before electronic filing is allowed.
Once electronic filing of Form 1040-X becomes available, it will apply to 2019 tax returns and later years. Unfortunately, amended 2018 tax returns and prior years will still need to be paper filed, since as of now, the IRS is not intended to open prior years for amended electronic filing.
Stay tuned for additional information on this topic in the coming months.
IRS Presentation – Tax Obligations of US Taxpayers Abroad
On May 28th the IRS conducted a webinar aimed at educating US taxpayers living outside the United States about their US tax filing and payment obligations.
The presentation was organized by the IRS’ Stakeholder Liaison office and consisted of a one hour presentation followed by a one hour Q&A session, during which US taxpayers living overseas were able to ask questions and have them answered directly by IRS Senior Revenue Agents.
The presentation focused on three main areas:
- The general tax filing and tax obligations that apply to US taxpayers living and working outside the country,
- The qualification requirements for the Foreign Earned Income Exclusion, which is a key tax provision used by many US taxpayers working abroad to avoid double taxation on their foreign wages and income from self-employment, and
- The social security tax obligations of US taxpayers working abroad, including an overview of Social Security Totalization Agreements and the social security tax implications of being self-employed in a foreign country.
The IRS allowed attendees to download the 43 slide presentation, which I am making available to our readers through a temporary Crossborder Planner webpage. Please use the button below to access the presentation and don’t be shy to share it with anyone who may benefit from it.
Opportunities for taxpayers to speak directly with experienced IRS revenue agents are rare. The audience was engaged and asked good questions, and I felt the IRS did a good job of explaining the issues.
The Stakeholder Liaison even quizzed the audience! Or should I say, assisted by conducting live polls to test the audience’s understanding of the topics being discussed by the Revenue Agents? All kidding aside, this technique allowed the IRS to test the effectiveness of the presentation and gave the opportunity to the presenting Revenue Agents to provide additional explanations when the correct response rate fell below 80%.
I will keep you informed about any future similar presentations offered the IRS.
Crossborder Academy Webinar – Top 2019 Tax Filing Tips for US Taxpayers in Switzerland
The Crossborder Academy is offering the third complimentary webinar of the year on June 18th, 2020 at 17:00 CET, tailored to US taxpayers living in Switzerland.
The seminar will focus on the upcoming 2019 US tax filing deadline and will cover key tax considerations impacting US taxpayers living and working in Switzerland, coronavirus tax relief benefits available to them through the CARES Act, relief benefits available to US citizens in Switzerland who are not required to file US tax returns, and tax planning opportunities provided by tax legislation passed in 2019 and 2020.
The webinar will be interactive, with an initial 40 minute presentation followed by a 20 minute live Q&A session.
If you live in Switzerland, have questions about your 2019 taxes or about your rights to coronavirus tax relief, don’t forget to register and invite your friends.
If you live abroad in a country other than Switzerland and are interested in organizing a seminar tailored to you and your fellow US expats, please email me at email@example.com to discuss. As always, please share this post with anyone who may find the content beneficial.
Until next week!