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Any USA taxes required?


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Are there any 100% CRSC disabled American veterans filing taxes from Thailand? After 8 years finally received CRSC approval and the Form 1099-R says no taxes due. VA Disability Compensation no tax, DFAS Retired pay no tax.

Do not think my social security, at present yearly $11,000, will be taxable. Perhaps some veteran uses a Thai Tax service that is familiar with CRSC? Perhaps it is not even required to file a yearly 1040 tax return anymore. Any information appreciated.

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There is an existing Tax Treaty between Thailand and America.  When you file your US 1040, include a reference to the Treaty and mark your return $0 tax due on any form of income.

 

On the flip side, Thailand only taxes you on funds that you earn in America and transfer to Thailand in the same calendar year.

 

The upshot of this is if you transfer money to Thailand in the year following earning it, you pay no Thai tax or US tax.

 

I use a US expat expert tax firm in Bangkok to file my returns, which have been accepted by the IRS for the last 4 years.  We even went back and claimed a full refund on my 2015 and 2016 returns that I had filed myself before learning about the treaty.  I am not affiliated with the tax guys in any way, just a happy customer, and can provide contact info to anyone interested.

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As long as your income for the year 2019 is just related to your "combat related special compensation" and any other disability income, plus the social security of 11,000 then you are NOT required to file a tax return for 2019. 

 

Your income (not including the disability portion) would have to be higher than $13,850 which is your standard deduction plus age related deduction.

Wayne CPA CFE

 

 

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If your total income exceeds $25,000, you will have to pay taxes on a percentage of social security.  Example: if your income, including ssa, is between 25,000 and 35,000, you would pay the the tax rate on 50% of your Social Security income.   So in your case, you would pay the tax rate, which would be very small for your income, on $5,500.

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Form 114 FBAR (foreign bank and financial accounts) is required if:

1.  If you have financial interest in or authority over one or more accounts in a foreign country and the total of all accounts exceed 10,000 USD at any time during the year.

 

2.  The form 114 has to be electronically filed each year before June 30th (separate from your tax return).  

 

3.  Dividends and interest earned on these accounts is reported on your personal tax return and any withholding taxes on the foreign accounts can be deducted as a foreign tax credit on your personal return.

 

IN ADDITION:

If you have more than $200,000 in foreign financial assets (assuming you are single and living overseas) on the last day of the tax year OR the value is more than $300,000 at any time during the tax year, YOU have to file form 8938 (which is part of your personal tax return).  This form reports detail info on your foreign accounts and the Maximum value of the accounts during the year.  Very similar to Form 114.

 

Wayne CPA CFE

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1 hour ago, wmccpa112253 said:

Form 114 FBAR (foreign bank and financial accounts) is required if:

1.  If you have financial interest in or authority over one or more accounts in a foreign country and the total of all accounts exceed 10,000 USD at any time during the year.

 

2.  The form 114 has to be electronically filed each year before June 30th (separate from your tax return).  

 

3.  Dividends and interest earned on these accounts is reported on your personal tax return and any withholding taxes on the foreign accounts can be deducted as a foreign tax credit on your personal return.

 

IN ADDITION:

If you have more than $200,000 in foreign financial assets (assuming you are single and living overseas) on the last day of the tax year OR the value is more than $300,000 at any time during the tax year, YOU have to file form 8938 (which is part of your personal tax return).  This form reports detail info on your foreign accounts and the Maximum value of the accounts during the year.  Very similar to Form 114.

 

Wayne CPA CFE

More than a couple of clients that do not have to file due to non-taxable disability pay and no taxable Social Security but have to keep over 10k in a Thai bank for the retirement visa renewal.  We just help them file the FBAR and that's it.  Dr. Phibes E.A.

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7 hours ago, khunjeff said:

Agreed. Tax treaties prevent double taxation on the same income - they don't exempt you from paying US tax on income that is normally taxable. In the situation described, US tax would be payable in the year the income was received, but no Thai tax would be due when the funds were transferred to Thailand. 

If you have income in the year in which you transfer funds to Thailand, I believe that you have to count transferred funds as "income" for Thai tax up to the amount of your income in that year. There could be some adjustments, though. 

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18 hours ago, mwbrown said:

There is an existing Tax Treaty between Thailand and America.  When you file your US 1040, include a reference to the Treaty and mark your return $0 tax due on any form of income.

That applies only to income earned in Thailand. It has nothing to do with income earned in the US. The tax treaty is setup to prevent dual taxation - you should not pay income tax to both governments on the same income.

 

For income earned in Thailand you have two options: 1) you can take a "standard exemption" (which was something like $93,000 USD last year) that is deducted from your Thai income; or 2) you can deduct the taxes you paid in Thailand on income earned in Thailand from the taxes you owe to the US government.

 

For example, if you earned $50,000 USD in Thailand, and you paid Thai income taxes on that income, then you can use option #1, and you owe no taxes to the US government. If you earned $100,000 in Thailand, and use option #1, then you would owe US income tax on $7,000 USD ($100,000 - $93,000).

 

On the other hand, if you choose option #2, then you would declare all of your Thai income on your US tax return, compute the US taxes owed on that income, then deduct the taxes you paid to the Thai government from the taxes owed to the US government. Option #2 only makes sense when you are earning significantly more than $93,000, or your Thai income taxes are comparable to or greater than the income taxes for the US.

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On 2/14/2020 at 8:47 AM, chingmai331 said:

Say mwbrown, what kind of income are you talking about?  Thai income, USA income?  And what is your status here?  Full time permanent resident, retirement visa extension, no more affiliations with USA bank receiving your SS check?

 

Seems rather 'impossible' to me that simply mentioning Thai-USA treaty will get any kind of benefit regarding the IRS.

There must be more to your story; that's all i think. 

Oh Christ, he's hired the Thomas Carden firm of snake oil salesmen. Here's a huge thread addressing this ( begin at post 25; and post 47 will give the finding of a senior IRS official re the savings clause):

https://forum.thaivisa.com/topic/1008555-tax-specialist-in-chiang-mai/page/2/

 

The US, in all its tax treaties, has the "saving clause" (sometimes called savings clause), which requires, regardless of treaty language, for a US person to file a US tax return. Thus, regardless if the the treaty says country X has exclusive taxation rights, one must file a US return, if for no other reason than to recoup the taxes paid to country X via a tax credit. Thus, double taxation is avoided -- and the designated exclusive country gets to keep the taxes. Fair is fair -- double taxation avoided, but no taxation to anyone also avoided. The OECD is currently addressing this problem of "no taxation," and is re-writing boilerplate tax treaties to accommodate.

 

Carden has taken this to the highest level -- find a country like Thailand, who has exclusive taxation rights via treaty, but who doesn't take advantage of it ("not brought into country in year collected") -- then obfuscate the treaty's language by somehow concluding that IRA proceeds are somehow not subject to the saving clause. Result: Pay taxes to no one. Christ, best I can find is that child support and alimony are the only elements of income excluded from the saving clause -- certainly not IRAs or other private pension type payments. Carden, however, must play a word game in his Form 8833 filings that somehow show IRAs as, indeed, not subject to the saving clause (would love to see a copy of this, but haven't yet). And, of course, the GS11 auditor, already stymied by IRS tax code language, just says 'whatever' when he reads the dazzling tax treaty language -- if such returns ever reach the eyes of a near-depleted auditor office, already overwhelmed by returns of millionaires.

 

Anyway, interesting to see mwbrown's injection into this -- is Carden now including other elements of income instead of just IRAs?

 

As a retired CPA, would love to see the inputs of CPA Wayne and Enrolled Agent Dr Phibes on this matter, i.e., that discussed in the referenced thread, above.

 

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  • 1 year later...
On 2/14/2020 at 8:30 AM, mwbrown said:

I use a US expat expert tax firm in Bangkok to file my returns, which have been accepted by the IRS for the last 4 years.  We even went back and claimed a full refund on my 2015 and 2016 returns that I had filed myself before learning about the treaty.  I am not affiliated with the tax guys in any way, just a happy customer, and can provide contact info to anyone interested.

I'm looking for someone reliable here in Thailand who can help me file my taxes. Would you mind sharing the contact info for the group or person you're referring to? Thank you!

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5 minutes ago, tcatsninfan said:

I'm looking for someone reliable here in Thailand who can help me file my taxes. Would you mind sharing the contact info for the group or person you're referring to? Thank you!

 

Look up at the stuck advertorial in this subforum

 

 

 

 

Re: the older OP, there is a worksheet for SocSec benifits and taxes.

 

https://www.irs.gov/pub/irs-pdf/p915.pdf

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5 minutes ago, mtls2005 said:

 

Look up at the stuck advertorial in this subforum

 

 

I saw the ad, but I don't like using services based only on ads. The previous poster specifically said he was a very happy customer and would recommend the person/group that he used. I trust personal recommendations a lot more than advertisements.

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On 2/14/2020 at 12:23 PM, DrPhibes said:

More than a couple of clients that do not have to file due to non-taxable disability pay and no taxable Social Security but have to keep over 10k in a Thai bank for the retirement visa renewal.  We just help them file the FBAR and that's it.  Dr. Phibes E.A.

I Just file mine by the e-file program yearly

https://bsaefiling.fincen.treas.gov/main.html

It is pretty easy actually.  

 

Do my taxes using TT and it directs me to file the FBAR report based on an answer to an international bank question the program asks.

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Regarding filing dates for US taxes, my understanding is that an expat can file their return by June 15th as opposed to April 15th. If so, can I file a extension request on June 15th or do I need to submit the extension form by  April 15th?

I would also assume you would still need to file by October 15th once the extension is sent.

 

 

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On 2/14/2020 at 9:58 AM, wmccpa112253 said:

As long as your income for the year 2019 is just related to your "combat related special compensation" and any other disability income, plus the social security of 11,000 then you are NOT required to file a tax return for 2019. 

 

Your income (not including the disability portion) would have to be higher than $13,850 which is your standard deduction plus age related deduction.

Wayne CPA CFE

 

 

what about form 1040- NR and received a form 1042-S from my SSA, do I have to file as no other income besides SS

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11 hours ago, RegularGuy77 said:

Regarding filing dates for US taxes, my understanding is that an expat can file their return by June 15th as opposed to April 15th. If so, can I file a extension request on June 15th or do I need to submit the extension form by  April 15th?

I would also assume you would still need to file by October 15th once the extension is sent.

 

 

The deadline for the October 15th extension for expat overseas is June 15th,

Edited by DrPhibes
typo
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20 hours ago, RegularGuy77 said:

I would also assume you would still need to file by October 15th once the extension is sent.

 

Quote

Additional extension of time for taxpayers out of the country. In addition to the 6-month extension, taxpayers who are out of the country
can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). To request this extension, you must send the IRS a letter explaining the reasons why you
need the additional 2 months.

Publication 54

Remember, all extensions after June 15 are extensions to file, not pay taxes owed (or best guess thereof). Doing a Direct Pay by June 15 will suffice to get a filing extension until Oct 15.

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