The known damage caused to our finances by the falling dollar includes more expensive costs for groceries and other goods, plus killer foreign-exchange costs when visiting the United States.
The individual shared responsibility provision requires that you and each member of your family have qualifying health insurance, a health coverage exemption, or make a payment for any months without coverage or an exemption when you file. If you, your spouse and dependents had health insurance coverage all year, you will indicate this by simply checking a box on your tax return.
Individual Taxpayer Identification Number (ITIN)
Persons not eligible for a Social Security Number (nonresident aliens and others not entitled to work in the United States) who file U.S. returns should apply for an Individual Taxpayer Identification Number (ITIN) by filing form W-7. An application for an ITIN will not affect the individual’s current or future immigration status in the United States.
INFLATION-ADJUSTED TAXES AND PHASEOUT AMOUNTS
Many of the taxes and exemption phaseouts in the Code are adjusted for inflation annually, generally by the use of threshold amounts. Some of these taxes, and if applicable, inflation-adjusted amounts are:
United States citizens living abroad generally must file a U.S. income tax return each year, even if they may exclude their income pursuant to the Earned Income Exclusion. In fact, timely filing of tax returns ensures that the benefits of the exclusion may be claimed. If you are a U.S. citizen living abroad and have not filed your U.S. income tax returns, you should file the returns immediately.
Foreign Account Tax Compliance Act (FATCA)
Taxpayers have long been required by the Bank Secrecy Act to report certain foreign accounts. Now, there is a new reporting requirement in the Foreign Account Tax Compliance Act of 2010. Since tax years starting after March 18, 2010, however, the IRS has required certain taxpayers to report their specified foreign financial assets in which they have an interest. For most individual taxpayers, this means reporting by filing new Form 8938, Statement of Specified Foreign Financial Assets, along with their annual income tax return. This annual foreign-asset disclosure to the IRS is in addition to any reporting requirement to the Treasury Department under the Bank Secrecy Act using the so-called “FBAR” form. The new reporting requirement is significant and is expected to impact many taxpayers.
Internal Revenue Service has concentrated efforts in recent years to ensure reporting of the existence of foreign holdings, and of income earned abroad or through foreign assets.
Proposed Tax Changes in President Obama’s Fiscal Year 2016 Budget:
Although these are not law yet, the following proposals, some of which may have a major effect on the economy have been proposed:
– Increase of the top capital gains rate from 23.8% to 28%;
– Elimination of stepped up basis on death;
– Implementation of the “Buffet Rule” to tax high income earners a minimum of 30%;
– Imposition of a Bank Tax of .07% on bank liabilities over $50 billion;
– Increase Estate Tax to 45%;
– Reduce estate tax exemption to $3.5 million;
– Disallow retirement savings once retirement account reaches $3.4 million;
– Levy self employment tax on all pass through business income (like S corporations);
– Reduce foreign tax credit to 85% of foreign taxes paid;
– Tax foreign earnings at a minimum of 10%, regardless of the earned income exclusion;