Healthcare.gov list three specific ways an expat may be exempt for mandated Obamacare health insurance.
- If you’re a U.S. citizen or resident living abroad: You can claim the coverage exemption for any month during your tax year that’s included in the 12-month period
- If you’re a U.S. citizen who’s a bona fide resident of another country or a resident alien of a country with which the U.S. has an income tax treaty: You can apply the exemption for the entire year.
- If you’re a resident alien who’s a citizen or national of a country with which the U.S. has an income tax treaty with an applicable nondiscrimination clause, and who’s a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year: You can apply the coverage exemption for the entire year.
How to claim this exemption
- You can claim this exemption when you file your 2016 federal income taxes. Most people file their taxes for 2016 by April of 2017.
- The IRS will publish information about claiming exemptions on 2016 tax returns later in 2016.
Gift and Estate Tax for United States Expatriates living in Thailand
Gift and Estate Tax for United States Expatriates living in Australia
As earlier stated in my Blogs, US citizens are taxed on their worldwide income regardless of where they reside. As bad as that issue is they also suffer from estate taxation when they pass away. In typical Orwellian tax form, they also suffer additional hazards if they are married to a foreign spouse. Under normal circumstances the US citizen spouse passes assets passed to the surviving spouse with an unlimited estate tax exemption. However if the surviving spouse is not a US citizen the unlimited estate tax exemption is not allowable. One immediate impact of this is that gifts to foreign spouses are limited. In 2016 it is possible to gift a foreign spouse 148,000 (this amount is indexed for inflation and is up from 147,000 in 2015). It is notable that the estate tax does not kick in until the estate reaches 5.45 million for the year 2016. All of this makes estate planning for US expatriates extremely complicated because they are subject to complex rules that are outside of the already arcane set of rules for estate planning and gifting. If you are married to a foreign spouse and you have an amount of assets that is approaching the estate tax exemption maximum or you are considering gifting your foreign spouse funds or assets make sure to contact a qualified US international expatriate tax specialists.
IRS Updates Streamlined Filing
The IRS updated their streamlined filing rules this summer. The updated rules still allow a taxpayer to enter the streamlined filing program no matter the complexity of their financial structure and regardless of how much they owe in back taxes (most U.S. citizens living in Thailand will owe no U.S. tax. The program will also waive all interest and penalties for those living overseas. However the program requires an increased amount of reporting and a statement on form 14635 describing why the tax payer was not willfull. It is important to note that all streamlined returns are reviewed by the IRS for correctness and potential tax fraud, because of this it is highly recommended that you contact a highly qualified U.S. Expat Tax Specialists to prepare your taxes for streamlined filing.
Thomas M Carden E.A J.S.M
United States Australia Tax Service
2016 Foreign Earned Income Exclusion Amount
The foreign earned-income exclusion amount under tax code will increase in 2016 to $101,300 from $100,800
U.S. citizens and residents who work abroad are able to exclude a certain amount of their foreign-earned income and a portion of their foreign housing expenses from their gross income for U.S. tax purposes.
In order to qualify you must meet either a physical presence test or a bona fide residence test.
Taxpayers may elect the Section 911 income and housing exclusions even if no foreign taxes were paid on their foreign earnings.
Thomas M Carden
Director American International Tax Advisers