You probably don’t spend much time thinking or worrying about your US tax obligations (at least I hope you don’t), but over the last few years the US government has been cracking down on tax cheats who are hiding money abroad. You probably read a bit about how the Swiss Banks are opening up their records to show the IRS who has been hiding money abroad and how the War on Terror has emphasized the need to stop money laundering. So what does all this mean for you, me and all the other honest hardworking Americans living abroad? The first thing to know is that the President has increased the IRS’s budget by $128 million dollars for 2010 and a good chunk of this will be spent on 800 new IRS agents. These 800 agents will be tracking down and prosecuting individuals and businesses who have not been filing their tax returns and paying taxes. What does this mean for you? Well, if you have been keeping up with your taxes you have nothing to worry about, but if you have fallen behind – right now is the right time to catch up! As a US Citizen or Greencard holder what do you need to do?

• If you are a US citizen or Green Card holder and you live and work outside of the US you must file a US tax return. It doesn’t matter that you pay taxes to HMRC, you still need to file a US return even if you will not owe any money.
• If you are self-employed you still have to pay self-employment tax and this is before the Foreign Earned Income Exclusion.
• If you have over $10,000 or the USD equivalent in a foreign bank account you must report it to the US Treasury. To report this money you need to file the Foreign Accounts Form TDF 90-22-1 by June 30th. Even if you get an extension for your tax return you will not get an extension for the Foreign Accounts Form.

What do I do if I have not filed in a few years? If you have not been keeping up with your filing requirements the best thing to do is get caught up. Generally speaking the IRS will ask for the past 6 years worth of tax returns, but they can ask for more. If you end up owing money to the IRS you will also owe interest and penalties, which could add up. That said if you have been living in the UK for the past few years and you have been on the PAYE system you are unlikely to owe anything!When do you need to start thinking about this? - April 15th is the US tax deadline, it is also when any taxes you owe to the US Government are due (after this date you will need to pay interest on any amount you owe)- June 15th is the US tax deadline for Americans living abroad- June 30th is the due date for the Foreign Accounts Form TDF 90-22-1, which is required if you had over $10,000 in a foreign bank account at any time during 2009More information on these topics can be found at www.greenbacktaxservices.com. About Greenback Tax ServicesGreenback Tax Services specializes in US Tax Return preparation for US citizens living abroad. Incorporated in New York, Greenback offers straight-forward, internet-based tax services with transparent fees to clients around the globe. Greenback Tax Services CPA’s have over 11 years experience and are experts in the ins-and-outs of expat returns. For help with your US Taxes please contact us at info@GreenbackTaxServices.com.