Tax Questions Thread
Ask your questions about Tax and FBAR here.
This thread will be focused closely on tax questions and answers. If the conversation starts to ramble, those comments will be moved to another thread.
Related threads:
Tax Discussion Thread. Instead of focusing on specific questions and specific cases, broader ideas can be discussed on the Tax Discussion Thread.
Tax Compliance (or not) Discussion Thread
Sub-threads (more will be added as they occurs):
Previous Tax thread:
US Expat Tax and FBAR discussion thread, part 1
US Expat Tax and FBAR discussion thread, part 2
No idea. I just posted the form that works in lieu of a tax return for those who don’t otherwise file.
@R. H.
According to the IRS page you just linked, I might get a payment automatically without filing anything. (SS recipient via direct-deposit) I’m not holding my breath but I’ll let everyone know if it actually happens.
@maz57
Yes, I think you will be automatically stimulated. Congratulations. (Though if it’s a Canadian bank account, possibly they only mail the cheque instead of direct deposit.)
I already have a US routing and account number with Transferwise, a never-used US passport (issued in Europe) as ID, and I’m contemplating a US mail forwarding service as address so I can keep Canadian residence completely out of the picture. Torn between doing it now for only $1200, or wait for the next installment so it’s the full cost of renunciation. I would definitely use this new “I never file because I don’t need to” form rather than do a full (even if only partially accurate) 1040 + 2555.
The fraud is going to be epic, but I expect they won’t care too much because the point is to just pump money back into the domestic economy, no matter how. A few non-residents here or there won’t be worth chasing.
@R. H.
“The fraud is going to be epic, but I expect they won’t care too much because the point is to just pump money back into the domestic economy, no matter how.”
If that’s the point, they could easily do so without a complicated system. Rent a fleet of dump trucks and drive up and down the streets with guys in the back shoveling cash. Heck, they wouldn’t even need shovels if they took to the freeways. (Alternatively, they could bring back Helicopter Ben for a final hurrah, lol.)
I wonder if people with CLNs could pull this off *LOL*
Probably. I wouldn’t be surprised.
If I can find my wife’s old SSN from when she had a green card decades ago, long since handed over to a grumpy customs officer, I might get money for her too. But she’d kill me if she found out about it because she actually does occasionally need to cross the border.
I am seriously considering signing my daughter up for a stimulus check with the ‘Non-Filer Method’ Ron H. linked to.
My daughter, turned 18 in March and is a US/Austrian dual citizen since birth (born in Austria). I renounced a couple of years ago, so she’s the only one left with citizenship. Her US passport expired about 4 years ago and hasn’t been renewed. I always claimed my daughter as a dependent on all my returns, so the IRS probably already has her name and SSN in their system. Since she’s a student, there’s no income and no reason for her to file (now or in the future).
I checked out TransferWise for getting a USD account with routing number. My daughter has never had any bank accounts, so I’d have to get her set up with something, but since she’s got a European birthplace, I don’t foresee any difficulties.
According to the link, the IRS wants a current mailing address. We’ll be moving in a few months, so that’s convenient for this purpose. Not sure if a foreign address will disqualify her, though. Are you only eligible to receive a stimulus check if you provide a domestic US address?
So, besides the pros of free money without a 1040, could there be any cons I’m not perceiving?
Also, does anyone know if you have to go through this each time the USG issues a stimulus check or if it gets sent out automatically once you’ve applied previously (in case more checks are forthcoming)?
Has anyone tried the ‘Non-Filer Method’ yet? I’m not sure whether to attempt it or not.
I think it’s a reasonable plan, given that your daughter already has an SSN and has been claimed in the past. I don’t think there’s anything illegal about her using the non-filer form, but I would not do it without her permission of course. It sounds like you’re both already aware of the need to dodge FATCA when she gets her first bank account.
My own dual-citizen daughter, also born outside the US, doesn’t have an SSN and I never filed to claim the child tax credit, so I’m not planning to tell her about this.
As far as we know there’s no problem with a foreign address – you only need a US bank account for direct deposit, if you want to be paid sooner. (I’ve seen reports of the money already being paid to those who filed in the past.) Otherwise wait for the cheque to arrive in the mail, some months into the future.
No idea about the future of the program or additional payments – your guess is as good as mine.
I’m still on the fence as to whether I should apply now for the $1200, or wait until there’s another installment. Not sure what if any risks are involved, and if it’s worth doing for only half the renunciation fee.
I had a funny thought earlier. What happens to people who renounced but filed their final-year return in 2018 or 2019? If the IRS is sufficiently disorganized, someone might one day later this summer receive a nice surprise in the mail from Mr. Trump, höchstpersönlich.
The IRS is definitely sufficiently disorganized.
@maz57
How are you planning to spend your self-renunciation bonus when it arrives? A nice watch from a non-American manufacturer, perhaps?
@Petlover
The advantage to the non-filer form, I suppose, is that unlike a regular 1040 it might create less expectation of future filing from your daughter. She will be “entering the US tax system” to receive this money – more so than simply being included on your returns as a dependent in past years – so this is a factor she needs to consider.
In theory, of course – in practice we don’t see any evidence that the IRS notices or cares when a non-resident suddenly ceases filing.
@R. H.
Nah, nobody wears a watch anymore; its all cell phones nowadays. (Besides, I already have a nice Swiss watch, made by the guys that invented tax evasion.)
With all this COVID19 got-to-stay-at-home stuff though, I was day dreaming about how I might go about creating my own CLN just for a fun project. Maybe I’ll spend the bonus on some top-of-the-line photo shop type software. I’ve always been a hard core do it yourselfer and you never know, a nicely done fake CLN might come in handy someday.
You can find a blank CLN in PDF format on Google image search. Also examples of complete ones so you can copy the typewriter font, the seal and the signature.
Re those considering filing for the stimulus $ ; not sure how much of this applies to expats filing from abroad, but for what it’s worth;
https://www.propublica.org/article/millions-of-americans-might-not-get-stimulus-checks-some-might-be-tricked-into-paying-turbotax-to-get-theirs
No surprise, the big tax prep software firms can be pretty scummy. Definitely in bed with the IRS, or rather with Congress.
For any compliant non-resident this should happen pretty seamlessly, if they qualify; they can add direct deposit details for a US account if that’s not already on their return.
Non-compliant non-residents of a larcenous bent can use this form and sidestep the whole silly business of filing a return.
https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
@Petlover
My one concern may be with the receiving bank in Austria. I am sure banks are attuned to the possibility of US citizens receiving these stimulus cheques and it may be a way of identifying those whose US taint has been so far hidden. I was a naturalized US citizen with a European birthplace and received a US pension to my bank in Switzerland routed through a forex company, it was in a matter of milliseconds that the bank contacted me and asked if I was a US citizen or green card holder. Fortunately I had my CLN to show them.
PS
I am not sure how transferwise operates but my forex company wanted to know if I was a US person before they would open an account for me.
Thanks, everyone, for the feedback.
Does the TransferWise or final destination account need to be in my daughter’s name? After what Heidi said about red flags going up when transferring between a Forex account and her Swiss bank account, I was thinking about having the stimulus money deposited in MY account. I have a CLN in case any questions arise. Could that work? All the IRS says it requires is a routing number to wherever the recipient wants the money paid out, right? It shouldn’t matter whose name is on the account, should it?
Thoughts?
@petlover
You should check with transfer wise, what they require.
I transfer through moneycorp as they have better exchange rates. I had to provide them with proof of who I was, passport or driving license proof of address , statement I wasn’t a US person etc as they are a fatca registered financial company.
It was quite easy to set up the Transferwise account from Canada, only needed to upload scanned images of my drivers license as ID, wasn’t asked any FATCA questions along the way.
I imagine you can have it sent to an account in another name, but I don’t think that solves the problem of getting it into Austria without alerting suspicions. But I expect there are plenty of things you can do to solve that problem – use the money as US dollars without bringing it in, move it in smaller chunks, send it to someone who is not a US person, who then transfers it. Lots of options.
This, basically:
https://imgflip.com/i/3wtky6
Funny, as is the indignation that some bloke in a foreign nation has got a payment when Americans are still waiting.
https://www.quora.com/I-just-got-1200-into-my-account-but-I-m-not-a-US-citizen-or-resident-Should-I-return-the-money