Wednesday, March 27, 2013

A Reminder to My Fellow Americans Living Abroad

Yesterday I finished filing my state and federal income taxes, a yearly task that I really hate. With the continuing heat and humidity here in Penang this task was even more annoying. When I first moved to Penang, I discovered that the major on-line tax preparation sites, like TurboTax and H&R Block, did not accept foreign addresses. I searched the IRS website and discovered that there were a few free preparation sites where foreign addresses are accepted. For the past couple of years I have been using TaxAct and am completely satisfied with it. I would recommend it for those Americans living abroad or those thinking of moving abroad, who would like to efile their returns.

In addition to filing income taxes Americans living abroad are shackled with the requirement of submitting 2 other forms. One of these is the FBAR (Foreign Bank Account Report) and the other is the FATCA (Foreign Account Tax Compliance Act). The FBAR requires Americans living abroad to supply to the Department of the Treasury a list of all bank accounts which they have in a foreign country. The FATCA is similar, but has requirements of a minimum of $200,0000 is assets. Luckily I do not have to submit the FATCA. With the FBAR, you must report the amount in each account at its highest amount, which is ridiculous. If you transferred $100,000 from your US bank account to your Malaysian account of say $5000 in order to buy a house on one day and then spent the $100,000 an hour later to pay for your house, you have to report your account as having $105,000, even it was for just one hour! How many people in the US keep track of when they have the most money in their accounts?

For those Americans thinking of moving to Malaysia after retirement, this is just another fun thing to do with your free time.

No comments:

Post a Comment