Note: we always refer to the "Tax Year" as the period from January 1 – December 31 for all personal tax returns. This may be either the calendar year or the fiscal year with which your financials were prepared for corporate or trust returns.

Retirement accounts come in many shapes and sizes. For U.S. tax financial reporting purposes, having a retirement account and/or receiving retirement income refers to U.S. and foreign social security distributions, pension distributions, retirement accounts like 401(k), or rollovers/transfers between retirement accounts.

Please list ALL of these accounts in the Non-US Financial Account section of the Tax Questionnaire (TQ).

To report U.S. distributions:

Note: lump sum pension distribution would be reported in the same place.

To report non-U.S. distributions, click Yes next to the question Did you receive foreign (i.e. non-U.S.) retirement distributions? and fill in the table Country & Pension Type.

An early distribution from the retirement account is treated as pension distribution and should be reported on Income > Passive Income > Pension. If you make an early withdrawal from a U.S. pension, there will be a penalty for early withdrawal. If foreign - then just regular tax.

Generally, employee contributions to foreign pension plans are not tax-deductible. In some instances (i.e., 7% employee contribution to the United Nations Joint Staff Pension Fund), they will be deducted as long as such contributions are spelled out in the annual wage statement. To report it:

On the one hand, disability is not earned income, but it may be taxable. It is considered earned income if the disability is reported on W-2. On the other hand, foreign disability - depends. It is never taxable when payments are proceeds from disability insurance that the employee paid for (purchased).

However, employer-paid short or long-term disability is taxable depending on the treaty country. Generally, it may be taxable because the employer deducts it as an expense. If it is taxable in a foreign country, it is likely taxable in the U.S. However, any foreign tax paid will be credited against your U.S. tax liability. If expressed on a foreign employer pay stub, it will also likely qualify for FEIE. If it is a social security type disability, then it is not qualified for FEIE.

Report your foreign disability benefits in Income > Passive income > Pension, the question Did you receive foreign (ie non-U.S.) retirement distributions? To get there, follow the instructions above.

You don't know the value of the pension, as the value is not computed until you retire. Thus, some practitioners assume that a defined benefit plan does not need to be reported on FBAR because the plan participant does not have an account with control or signatory authority in their name.

However, this advice contradicts the Basic Questions and Answers on Form 8938, suggesting a "reasonable estimate" of the value of the defined benefit plan.

To report it:

You can report it as an Insurance / Annuity product. To report it:

Defined Benefit Schemes are not reportable to the IRS, so you do not have to upload their statements.

Report it on Income > Wages. Specify the employer's details, then indicate gross wages/salary earned with this employer during the tax year. Don't forget to select the currency. To report it, follow the instructions.

Child support is not considered part of your income. It is paid to your child, and you act as a custodian/trustee. Alimony, however, is included in your taxable income. If your ex-spouse has a U.S. Social Security number, provide their name and SSN. If your ex-spouse is a non-U.S. person, this information is not required.

Report alimony on Income > Other Income, question Did you pay or receive alimony during the tax year?

Note: the above guidelines apply to divorce agreements finalized by December 31st, 2018, regardless of when payments are received. For agreements signed after January 1st, 2019, the recipient does not include alimony.

Child support cannot be claimed as a deduction. Alimony can be deducted if your ex-spouse has a U.S. Social Security number. If your ex-spouse is a non-U.S. person, we will assess whether your alimony payments qualify for the full deduction, based on the Tax Treaty terms between the U.S. and your ex-spouse's country of residence.

Report paid alimony on Income > Other Income, the question Did you pay or receive Alimony during the tax year?

Note: the above guidelines apply to divorce agreements finalized by December 31st, 2018, regardless of when payments are received. For agreements signed after January 1st, 2019, alimony cannot be deducted by the payer.

Report on Income > Other Income, the question Have you received child benefits of any kind? 

Examples of other items that may affect your taxable income that should be reported on the Other Income tab are:

Our TQ is done in a way that only shows the questions about your situation. You are asked to select the characteristics that apply to you while creating the TQ. Depending on your answers, we will show/hide certain sections of the TQ:

After completing the first employer's details, you can click the + Add Foreign employer button to provide details about the second employer (and so on if you have more to report).

Our Tax Questionnaire will ask you separate questions about each type of income. Please select all types of income that apply to your situation, then complete the respective sections of the TQ.

Please provide the grossed-up amount of tax paid and your tax return from the resident country. We will break it down for you.

Gross wages mean the total amount earned before contributions or deductions are taken from that income. For example, it means income before working expenses AND before taxes.

To report it, navigate to Income > Other Income and click Yes to the question Did you receive a refund or unemployment income from a U.S. state in the tax year?

To report it, navigate to Income > Other Income and click Yes to the question Did you receive non-U.S. monetary benefits of any kind? (Example: Disability, maternity, paternity, unemployment).

This account is considered Social Security type and should not be reported.

No. Personal loan interest is not deductible. You can only deduct home mortgage and higher education loan interest. Interest in personal expenses (car loans, credit cards, etc.) cannot be deducted.

Report it as gross wages/salary earned with this employer during the tax year. To report it:

Report it on Income > Other Income, the question Did you have Lottery/Gambling winning or Lawsuit Settlement during the filing year?

Report it on Income > Other Income, the question During the filing year, did you receive inheritance or gifts from a non-US person?

This is not reportable to the recipient. If gift donors are U.S. persons, they can gift up to $16k yearly without reporting. Any more considerable amount is reportable by the donor, not the recipient, on Form 709.

Report it as gross wages/salary earned with this employer during the tax year on Income > Wages. Specify the employer's details, then indicate gross wages/salary earned with this employer during the tax year. Don't forget to select the currency. To report it, follow the instructions.

To report it, follow the instructions. Select Manufacturing as the type of business:

Farm subsidies are also considered Earned Income. They are government payments for future proceeds from farming (earned income). If a farm does not operate, it does not receive a subsidy.

Report it on Income > Passive Income > Rental Income. Airbnb is just a marketing agent. Otherwise, it is just a rental income.

Although a timeshare can be sold, it is only a transfer of the right to use the deed and is not considered a tangible asset. Therefore, you do not report owning a timeshare to the IRS (like you would tangible real estate). If you rent it out for less than two weeks, that income is tax-free, but the losses are not allowed for deduction.

If you sold your main home, second home, or cooperative apartment, please report it on Income > Home Sale:

If the government pays the rent subsidy to assist a renter - such money is not reportable and non-taxable.

If your employer pays this rent subsidy, please report it on Income > Wages. To report it:

Report it as Self-Employment. To do it, follow the instructions and indicate your occupation in the Primary service that the business provides field:

If you own directly or indirectly at least 10 percent of the voting stock in any foreign corporation, you should provide this information in order to prepare Form 5471. Please indicate it, as you start the Tax Questionnaire or add this information while working on your TQ:

Please report it as gross wages/salary earned with this employer during the tax year. Don't forget to select the currency. To report it, follow the instructions.

To report it:

To report it:

In this case, you are required to fill out a different version of the Tax Questionnaire for Form 1040NR. To do it:

Note: if you do not meet the Substantial Presence Test, you will be presented with the 1040NR version of the Questionnaire (it's significantly shorter - less work for you). You will see an NRA next to the tax year, e.g., 2021 (NRA).

This applies to the Church tax (Germany), Wealth tax (Switzerland, France, India), Council Tax (UK), Zakat (Saudi Arabia, Malaysia, Qatar), and Taxe d'habitation (France).

USC is an additional income tax levy on highly compensated individuals and is considered a regular income tax.

We will be able to advise on the best way to optimize your tax position in the course of your tax return preparation. However, this is something we discuss when gathering your data in the Tax Questionnaire.

The Financial Year may go from July 1 to June 30 in your resident country. You may have a Self-Managed Superannuation Fund, valued on June 30 each year, so you don't have a 31-December figure to give you. In this case, please provide a statement issued on the date closest to the end of the year (i.e., December of the calendar year for which the return is filed or January of the following year).

Note: this applies to impots sur revenus in France, Einkommensteuer in Germany, Impuesto sobre la renta in Spain, etc.

Report it on Taxes And Deductions > Taxes Paid, the question Did you pay any tax to any non-U.S. country on any of your income this year? (January 1 - December 31 of the year you are filing for).

To calculate the taxes paid during the selected year, use Calendar Year Income Calculator. Provide the figures in your resident country calendar (for individual months or the whole year), then copy the calculated amount earned during the tax year. To get to the calendar:

We use currency optimization as a means to assist our clients in reducing their tax liability. The Internal Revenue Service has no official exchange rate and it allows using any posted exchange rate, as long as it is consistently used throughout the return. We use IRS yearly average exchange rates or year-end exchange rates recommended by the IRS whichever is lower. However, it is mandatory to use the treasury rate for Form 8938 and FBAR.

If you file a joint U.S. return, there is no need to split the taxes you paid because all tax on earned income (husband and wife, wages, and self-employment) will be used for the credit together.

If one spouse is a U.S. person and only one person files, you should provide your ratio in joint earnings and report the portion of combined taxes based on that ratio. Or you can tell us how much each person earned, and we will determine the tax breakdown between the two earners.

The IRS needs to know your gross pay (before any tax is withheld) and the amount of tax paid (this benefits your tax position). Your payslips, employment contract, or local tax forms should contain this information.

Example: The employment contract states that you receive USD 150k gross pay. Your employer pays $X to your local government in taxes paid. On your Tax Questionnaire, you report gross pay. If you provide us with what $X is, your tax position will improve. Report that amount in answer to the TQ question of Taxes paid or withheld in the resident country.

No, we do not need your receipts or bank statements. However, the TQ will generate a list of needed supporting documents based on your answers.

Report it on Taxes And Deductions > Deductions tab, and answer Yes to the question Did you own residential real estate during the tax year? Then answer the question Do you have a mortgage on the residence in which you live? and subsequent questions.

❗ Important note:  starting from 2018, travel expenses are only deductible for U.S. military and state return filers.

Report it on Taxes And Deductions > Deductions, the question Did you incur moving expenses? and provide a breakdown by expense type with totals.

Report it on Taxes And Deductions > Deductions, the question Medical and dental expenses/insurance premiums (only if the amount is more than 10% of gross income).

Report it on Taxes And Deductions > Deductions tab, the question Did you incur higher education expenses for yourself, spouse or dependents? (U.S. college & beyond and some foreign institutions qualify).

You can deduct your daughter's tuition as long as she is dependent on YOUR tax return. She may file 1040EZ but should NOT claim a personal exemption, or you won't be able to list her as a dependent.

Child care (even abroad) is tax deductible. If you believe you are eligible for the Child Tax credit, provide documents that confirm you have covered over 50% of the household costs, such as:

To indicate that you are self-employed, you can navigate to the Life & Income TQ section and select Yes next to the statement Self-employed or Independent Contractor.

To report business expenses, follow the steps below: 

You can list your mother as a dependent if your mother:

Contributions to non-U.S. charities can not be deducted in the U.S. except for certain Canadian, Israeli, and Mexican charitable organizations.

Donations to Canadian charities are tax-deductible in the U.S. However, unlike Canadian tax returns, which allow donations to be deducted, U.S. tax returns use "itemized" deductions. Not every U.S. taxpayer benefits from itemizing; "standard" (fixed amount) deductions are often more cost-effective. However, if you do not itemize, you cannot deduct charitable donations. Please let us know the amount of your donations, and we'll figure out which type of deductions (itemized or standard) would be more beneficial for you.

If you have receipts for various expenses deductible in your country of residence, It is sometimes possible to deduct the same expenses on your U.S. tax return. However, the method for claiming deductions to reduce gross income in the U.S. differs from that used in most other countries.

The taxpayer can either claim a fixed amount (standard deduction) or a separate deduction for each item (itemized deductions).

We assess the amount you can claim using each method to determine which type of deduction will benefit you the most.

Contributing to a 529 plan offers key benefits for your taxes: