Expatriate Tax Return Preparation

If you are a Resident Aliens Abroad you will need to file a federal income tax return every year to determine how much you owe in federal income tax. Although many people are intimidated by the thought of filing their tax return, there is no reason to panic each April. Income tax filing is a process that millions of people complete successfully every year. Below are some important steps you should take to file your federal income tax return:

Social Security Numbers

It is important that you have the correct Social Security Number and date of birth for each person you will claim as an exemption on your return. If each name, Social Security Number, and date of birth do not match exactly when you file the return, the IRS will reject your return and ask you to submit the correct information.

Preparing Your Return

You can choose to prepare your return yourself or get assistance from a qualified tax professional. If you choose to prepare your return yourself, consider using a tax software program to assist you. Tax software can make the preparation easier, help you understand all the credits and deductions you are qualified to receive, and allow you to e-file your return. 1040.com Online Tax Preparation lets you prepare and e-file both your federal and state taxes.

Find out if you are required to file a federal income tax return

While the majority of people are required to file and pay income taxes, there are certain low-income earners (as well as children) who are exempt. You will most likely have to file an income tax return, but you should check the IRS’ filing requirements before you proceed.

Recommended Records

Preparing your tax return will be easier if the records you need are organized and readily available:

•           Proof of identification

•           Social Security Numbers for you, your spouse, and dependents

•           Birth dates for you, your spouse, and dependents

•           Wages and earnings statements: Forms W-2, W-2G, 1099-R, etc.

•           Interest and dividends statements from banks, brokerages, etc.

•           A copy of last year's tax return

•           Bank routing and account numbers

•           The amount you paid for childcare and the childcare provider's tax identification number

•           Receipts for charitable donations

Determine your tax filing status

The federal tax filing statuses include: single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child. You may qualify for more than one filing status, in which case you will have to make a choice. In that situation, you should choose the filing status that will result in the lowest tax.

Calculate your dependents and personal exemptions

The IRS allows taxpayers to claim personal exemptions for themselves and their dependents. A personal exemption is similar to a tax deduction because it reduces your taxable income. For tax year 2013, the maximum personal exemption is $3,900 ― note that your personal exemption amount may be less if your income exceeds a certain amount. Your personal exemption information must be 100% accurate on your tax return because it largely impacts how much federal income tax you owe.

Report your income for the tax year

Most people can simply review their W-2s (Wage and Tax Statements) to determine their annual income. This can get slightly more complicated if you have worked more than one job during the year. Furthermore, individuals who are self-employed will likely have to spend extra time on this part of the filing process.

Claim eligible tax credits and deductions

If you qualify for any tax credits or tax deductions, you will want to take advantage of them. Tax deductions reduce your taxable income and tax credits reduce the actual amount of tax that you owe ― both will increase your chance of receiving a tax refund. Make sure you understand how to properly claim any income tax benefits, as mistakes will delay the processing of your return. If you are preparing your own income tax return, you may order IRS tax forms (and publications) for delivery by U.S. mail or you can access the forms online.  All of the documents that you will need to file your federal income tax return should be available on the IRS website.

Hiring a Professional

If you choose to hire a tax professional to prepare your tax return, choose carefully. It is important to choose a qualified professional, because you are ultimately responsible for the accuracy of your return. Before signing your return, review it to make sure that all information is correct and that you understand the entries. Never sign an unfinished return.

Federal Income Tax Forms

There are different types of individual income tax return forms. You must use the tax form that corresponds with your particular situation and allows you to claim the income, deductions, credits, etc. that apply to you. The most common types of income tax returns include the following:

Form 1040 (U.S. Individual Income Tax Return)

Form 1040A (U.S. Individual Income Tax Return)

Form 1040EZ (Income Tax Return for Single and Joint Filers With No Dependents)

Form 1040NR (U.S. Nonresident Alien Income Tax Return)

 

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