Frequently Asked Questions
Answers to Common Questions About Tax, Accounting, Advisory, and Expat Tax Services
Below are answers to some of the most common questions we receive from individuals, business owners, and Americans living abroad.
If you don't see your question, please contact our office to schedule a consultation.
General Questions
What services does your firm provide?
We provide:
- U.S. Expat Tax Filing
- International Tax Planning
- Business Tax Preparation
- Individual Tax Preparation
- Small Business Advisory Services
- Bookkeeping & Accounting
- FBAR/FATCA Compliance
- PFIC Reporting
- Retirement Tax Planning
Do you work with clients outside your local area?
Yes.
We work with clients throughout the United States and internationally using secure electronic document exchange, video conferencing, phone, and email.
What information do I need for my first consultation?
Helpful documents may include:
- Prior-year tax returns
- Financial statements
- Business records
- Foreign income information
- Foreign account information
- Questions or concerns you would like addressed
How are your fees determined?
Fees depend on:
- Complexity of the engagement
- Filing requirements
- Number of forms required
- Advisory services requested
- Business structure and reporting needs
A fee estimate is generally provided before work begins.
U.S. Expat Tax Questions
Do I have to file a U.S. tax return if I live abroad?
In many cases, yes.
U.S. citizens and Green Card holders generally must continue filing U.S. tax returns regardless of where they live.
Filing requirements depend on income levels and individual circumstances.
If I pay taxes in another country, do I still have to file in the United States?
Usually yes.
The United States taxes citizens and permanent residents on worldwide income.
However, tax credits and exclusions may help reduce or eliminate double taxation.
What is the Foreign Earned Income Exclusion (FEIE)?
The Foreign Earned Income Exclusion allows qualifying taxpayers to exclude a portion of foreign earned income from U.S. taxation.
Eligibility depends on meeting specific residency or physical presence requirements.
What is the Foreign Tax Credit?
The Foreign Tax Credit allows taxpayers to claim a credit for qualifying foreign taxes paid.
This can help reduce double taxation and may be beneficial for taxpayers residing in higher-tax countries.
What happens if I have not filed U.S. tax returns while living abroad?
The IRS provides compliance programs that may help eligible taxpayers become current.
The appropriate solution depends on the facts and circumstances of each case.
Professional guidance is recommended before taking corrective action.
FBAR and FATCA Questions
What is an FBAR?
An FBAR (Foreign Bank Account Report) is required when the aggregate value of foreign financial accounts exceeds $10,000 at any point during the year.
The report is filed separately from the tax return.
What accounts must be reported on an FBAR?
Potentially reportable accounts include:
- Foreign checking accounts
- Savings accounts
- Investment accounts
- Certain retirement accounts
- Joint accounts with signature authority
Reporting requirements vary depending on circumstances.
What is FATCA?
FATCA (Foreign Account Tax Compliance Act) requires certain taxpayers to report specified foreign financial assets on Form 8938.
FATCA reporting is separate from FBAR reporting.
What are the penalties for failing to file an FBAR?
Penalties can be substantial depending on the circumstances and whether the failure is considered non-willful or willful.
Taxpayers who discover missed filings should seek professional advice promptly.
PFIC Questions
What is a PFIC?
A Passive Foreign Investment Company (PFIC) is generally a foreign corporation that earns primarily passive income or holds passive assets.
Common examples include many foreign mutual funds and foreign ETFs.
Why are PFICs important?
PFIC investments often trigger complex reporting requirements and may result in unfavorable tax treatment.
Many expatriates unknowingly own PFIC investments.
What is Form 8621?
Form 8621 is used to report PFIC ownership and certain related elections.
Preparation can be complex depending on the investment structure.
Business Tax Questions
What business entities do you serve?
We work with:
- Sole Proprietorships
- LLCs
- Partnerships
- S Corporations
- C Corporations
Should my LLC elect S Corporation status?
The answer depends on factors such as:
- Business income
- Payroll considerations
- Growth objectives
- Administrative requirements
A tax analysis can help determine whether an S Corporation election may be beneficial.
How often should I meet with my tax advisor?
Many business owners benefit from quarterly tax planning meetings.
Regular reviews can help identify opportunities before year-end.
Can you help reduce my business tax liability?
Our tax planning services help identify legal strategies that may reduce taxes while maintaining compliance.
Specific recommendations depend on each client's situation.
Bookkeeping Questions
Why is bookkeeping important?
Accurate bookkeeping helps business owners:
- Understand profitability
- Monitor cash flow
- Prepare for tax season
- Make informed decisions
- Support financing applications
How often should bookkeeping be updated?
Most businesses benefit from monthly bookkeeping and financial reporting.
Some growing businesses may require more frequent updates.
Do you work with QuickBooks?
Yes.
We assist clients with QuickBooks setup, cleanup, ongoing support, and reporting.
Small Business Advisory Questions
What is business advisory?
Business advisory services help business owners understand financial performance and make informed decisions.
Areas often include:
- KPI reporting
- Budgeting
- Forecasting
- Cash flow planning
- Profitability analysis
- Strategic planning
How is advisory different from bookkeeping?
Bookkeeping records transactions.
Advisory services analyze financial information and provide recommendations for improving business performance.
How often do advisory meetings occur?
Most clients choose monthly or quarterly meetings depending on their needs.
What types of businesses benefit from advisory services?
Common clients include:
- Professional service firms
- Consultants
- Contractors
- Healthcare practices
- Retail businesses
- Growing small businesses
Tax Planning Questions
What is tax planning?
Tax planning involves proactively evaluating strategies that may reduce future tax liabilities.
Unlike tax preparation, planning occurs throughout the year.
When should tax planning begin?
The earlier the better.
Most planning opportunities are available before year-end rather than during filing season.
Can tax planning help improve cash flow?
Yes.
Effective tax planning can help businesses and individuals better manage tax obligations and avoid surprises.
Retirement Planning Questions
Can you help with retirement tax planning?
Yes.
We help clients evaluate:
- Retirement distributions
- Roth conversion opportunities
- Required Minimum Distributions (RMDs)
- Tax-efficient withdrawal strategies
What is a Roth conversion?
A Roth conversion involves moving funds from a traditional retirement account into a Roth account.
The transaction may create current taxable income but can provide future tax benefits.
Working With Our Firm
How do I become a client?
- Schedule a consultation.
- Discuss your needs and objectives.
- Receive an engagement proposal.
- Securely upload documents.
- Begin the engagement process.
Do you offer virtual meetings?
Yes.
We offer virtual consultations for clients located throughout the United States and internationally.
How do you protect my information?
We utilize secure systems and electronic document exchange procedures to help protect client information.
Still Have Questions?
Every tax and financial situation is unique. If you need assistance with tax compliance, tax planning, business advisory services, bookkeeping, or international tax matters, we are here to help.
Speak with a CPA about your specific needs and goals.