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Frequently Asked Questions

US taxes can be complicated, and we know that finding even the most simple answers online can be difficult. To help out, we've placed a list of some of the most common questions we're asked below. 

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We're here to help, and no question is too big or too small. We're all beginners in this area at some point.

Do all US citizens living overseas need to file tax returns to the IRS?

In most cases yes. as US tax residency is based on citizenship rather than physical residence in the USA, it means most US citizens with any income at all do usually need to file. You can learn more about this here.

Will I owe tax to the IRS?

The vast majority of our clients don't owe any tax to the IRS, however it can sometimes be due on income such as capital gains, KiwiSaver or self-employment. But, less than 1 in 10 of our clients has a tax liability. If you're concerned about the tax efficiency of your situation, we'd recommend learning more about tax consulting.

Is there is a $100K USD threshold for filing?

This is a common misconception, which is not at all helped by some IRS literature online. It is true that there is a foreign earned income exclusion of $120,000 USD (2023), however this enables us to exclude income from taxation. It is not a filing threshold. 

I don't have any income from the USA, do I still need to file?

Yes, the US tax return reports worldwide income to the IRS in the same manner it would for US sourced income. Fortunately however, we are able to use NZ tax paid, to offset most forms of US tax (foreign tax credits).

Are you qualified and experienced?

Yes, both David Tzimenakis and Matthew Twine are IRS Enrolled Agents, which is a professional credential enabling us to represent taxpayers before the IRS. This also provides confidentiality privilege in any dealings with us (in all matters except criminal investigations). In addition to this, both David and Matthew have been practicing for more than 10 years in US taxation.

How much will it cost to file my US tax returns?

Our fees are based upon complexity. They generally begin at around $700 per year, and increase gradually with the forms needed. Entities such as companies, trusts, or holding investment portfolios are the most common aspects which can increase complexity and cost. To obtain a quote, please contact us today.

Do I need to file an FBAR?

Most likely, yes. An FBAR is a Report of Foreign Bank Accounts, which is filed on Form FinCEN 114. This form has no tax implications, but it does require you to disclose all non-US bank accounts. Learn more about the FBAR here.

Am I going to get penalties from the IRS?

Penalties are possible, but preventable. By ensuring that you are tax compliant, you can prevent penalties being issued by the IRS. You can learn more about the IRS ability to pursue taxpayers overseas here.

Can I work with the US Tax Team remotely, or do I need to come to meet you?

The vast majority of our clients work with us solely through email, telephone, Zoom and secure file upload. Saying that, we're welcoming of any clients who'd like to arrange an in-person meeting.

Will I get to see my tax returns before they are filed?

Yes, absolutely. Once your tax returns are completed, they will be sent to you electronically for your review. Of course, it can be difficult to review the returns thoroughly without any US tax knowledge, but we'll do our best to help. Once you're satisfied with the return, we'll then be able to electronically file with the IRS, only after receiving your signed authority.

What are your payment terms?

Our standard payment terms are 50% of the total fee at the time of engagement, and 50% upon completion of the tax returns. We issue our invoices around 5-10 days after a client engages us, and these have a 14 day due date. We accept bank transfer, and credit/debit card payments.

Does The US Tax Team offer New Zealand tax return preparation?

Whilst we are heavily experienced and studied with NZ taxation, we do only what we're best at, which is US tax compliance. We don't offer NZ tax preparation in house, however we can provide excellent referrals for partners whom we work with.

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