Are You An American Expat Abroad?

Hi Everyone, If you are an American expat, here is some important information released this week by FAWCO (Federation of American Women's Clubs Overseas), with regards to tax returns and the IRS.

We would not usually highlight tax information for any one specific nationality, given we have members from 175 nationalities. However, one-third of our members are American, and this did seem important. Please ignore this if it does not apply to you. Thanks.

From FAWCO:

"Under the US tax system, US persons - citizens, green card holders and residents - are required to file annual US income tax returns reporting worldwide income. It is a legal obligation to ensure that "true and accurate" returns are filed with the IRS in a timely way to avoid risks of numerous penalties and, potentially, criminal prosecution.

Recently, the IRS has sent a strong message to US taxpayers residing abroad who may not yet have complied with their US income tax obligations. Taking advantage of the recently announced IRS "Overseas Voluntary Disclosure" program can potentially help taxpayers reduce penalties and avoid prosecution.

Note that OVDI is not the best solution for all US persons and not all US persons are eligible for the program. As always in the past, FAWCO strongly recommends that you consult a tax professional but, given the August 31 deadline for OVDI, you should do so quickly!

What is OVDI?

The 2011 OVDI is the latest in a number of efforts by the United States Government to encourage US persons who have not complied with their various US tax and related reporting requirements to become compliant.

The IRS has stated that the 2011 program is the non-compliant taxpayer's "last best chance" to come forward with an element of "certainty" on the amount owed to the US government. After this, the implications are that the IRS will use its full arsenal of penalties, and the possibility of criminal prosecution, to aggressively find and "punish" the non-compliant taxpayer.

What is required under OVDI?

The taxpayer must file all delinquent or amended returns and additional reporting obligations for 2003 through 2010 calendar years.

The taxpayer must pay all taxes, penalties and interest charges.

The deadline for participation in OVDI is 31 August 2011. This may be extended by 90 days if a request is submitted by this date.

What are the benefits of OVDI?

Under OVDI, individuals accepted into the program can avoid criminal prosecution. Costs, penalties and interest charges are clear and the individual has the peace of mind of being fully up to date and compliant. While there are alternative disclosure procedures, OVDI may provide the best opportunity for the lower fixed penalties for becoming compliant.

Click here for the full article on the FAWCO website, prepared with information for which we very much thank US Tax & Financial Services Ltd in London.

Please share this information with others around you..."

Money Matters for Expat Women

Hi Everyone, If you are interested in learning more about money matters, including how they relate to expatriate issues, please do take a look at our Expat Women Money Matters page, anytime.

Here are some of our recent additions to that page:

The Expat Spouse as Household CFO: Basic Principles You Need to Know About Investing
Chad Creveling and Peggy Creveling
Investing is a full-time profession for many, and myriads of books have been written on the hows and whys of making smart investment decisions. Expats also must consider the role that different currencies and tax jurisdictions should play in their portfolio. Given the complexity involved, our goal here is to simply introduce you to some of the concepts behind successful investing...

Managing Currency Risk: As an American Abroad, In What Currency Should I Save and Invest? Part 1 of 2: Principles of Sound Currency Management
David Kuenzi, CFP®
Currency issues are often one of the most vexing and least well understood issues for investors. This is especially true for Americans abroad whose salaries and other income sources are often denominated in currencies other than U.S. Dollars (USD). The good news is that understanding how to properly incorporate currency considerations into a sound, long-term investment strategy is much easier than commonly understood...

Managing Currency Risk: Part 2 of 2: Practical Guide to Building a Globally Diversified, Multi-currency Investment Portfolio
David Kuenzi, CFP®
In this part two, we provide a practical guide on how and where investors can go to construct a globally diversified, multi-currency investment portfolio. Are multi-currency portfolios the exclusive realm of the ultra-wealthy who have accounts all around the globe? Do we have to open up investment accounts in the U.S. and Europe or buy complicated currency hedging products, such as futures or swaps?

Business Finances for Expat Women Entrepreneurs: Corporate Structures, Expat Taxes and Retirement Planning
David McKeegan
If you are a budding expat entrepreneur who has settled offshore permanently, establishing your business in your host country might be an appealing option. However, if you are planning on being abroad for just a few years - not forever - or you plan on living in multiple countries abroad, you may want to incorporate in your home country (depending on rules in your home country, of course)...

8 Tips for Controlling Your International Health Insurance Costs
Philip McCusker
It used to be that the two things you could be certain of in life were death and taxes. The third one should be increasing insurance premiums every year for your health care. Even globe-trotting executives who are fortunate enough to have their family's health care covered by their employer might face a bit of a shock...

7 Financial Tips to Help Expatriates Prepare for When Danger and Disaster Strike Abroad
Lisa R. Mitchell
In Egypt during the civil unrest, the government shut down the Internet. Try conducting banking activities without phone or Internet service. How would you move money, pay bills and conduct other necessary banking transactions if you were stuck in the middle of political unrest or living in a country that experienced a natural disaster...

...and we have plenty more Money Matters articles here.

Happy reading! Andrea

April 2011 Edition of Mobility Magazine Online

Hi Everyone, If you are in the expat, global mobility and/or relocation industries, you may be interested in the April 2011 edition of the Worldwide ERC® Mobility Magazine, which features the following:

The Big Squeeze... After You Think You’ve Gotten It All: More Policy Savings
By Ellie Sullivan, SCRP, SGMS and Tim McCarney, GMS

Perfect Partners: Trusted Advisors and Educated Clients
By Anita Brienza, GMS

Demystifying Personal Finance for American Expatriates
By Andrew Fisher

Expats: the Pitfalls of Parting Company
By Nino Nelissen, SGMS

All for One and One for All: an Examination of Lump-sum Programs
By Marti Briney, CRP, SGMS

Destination Profile: Saudi Arabia
By Mohamad Hadbaoui and Duncan Lawson

Skill Set Switch: the Challenges and Changes in the Higher Education Relocation Market
By Helen McNeece, CMC, CRP and Jean Mann, GMS

Get on the Retention Train: Three Ways to Eliminate Complacency, Prove Competency (and Retain More Clients!)
By Jill Heineck, CRP

Happy reading! Andrea