bfelps 3mo

Question about FEIE - for the physical presence test, would one need to be physically residing in one single country outside the US? Or does spending time in multiple countries across 330 days also count

nomadtax 3mo

You can reside in multiple countries

anderjaska 3mo

My employer couldn’t use my SD address so I gave them my parents’ address in MD. If I file a non-resident return is it possible to get most of the money back?

legtar 2mo

Huy guys!! Can you help me figure out if I have 10 currency accounts in wise with the total amount of money over 10 kUsd, do I need to report every one separately for FBAR?

etc 2mo

qhimlsgk - the threshold is a combined balance over $10k, and once that happens, all of them need to be reported

etc 2mo

With that said, if Wise gives you a report of total amount in USD across all accounts, you could probably just report it as a single account

tomhogans 2mo

I would probably get some professional advice if you're concerned about FBAR requirements.

> The penalties for failing to file an FBAR can be severe. For willful violations, the penalty can be as high as the greater of $100,000 or 50% of the account balance. Non-willful violations carry a penalty of up to $10,000 per violation. In some cases, criminal charges can also be filed.
Even a small, unintentional mistake can be a $10,000 USD fine. I purposely avoid anything that could trigger an FBAR reporting requirement, just not worth the risk.

kalenjohnson 2mo

the fines are very high, but they don't usually go after the average person working an average job. I'd just suggest getting an accountant or expat tax app that includes FBAR, you put in your highest amounts in each bank account for the year, done and done

farmlancer 2mo

convert them back to usd?)

legtar 2mo

What do you mean by small mistake? I suppose the penalty only occurs in case of not reporting some accounts.

andrewvarga 2mo

Does anyone have a contact for a US based tax specialist? Hungary had a double taxation treaty that is going to be void after January, and noone seems to know if this will apply to someone based who is based in hungary / hungarian national and is providing service as a contractor to a US company

taxqueen 2mo

a contractor who is not a US citizen or residing in the USA fills out a specific form for the company for whom you are doing contract work. It's called the W-8BEN. This forms confirms you are foreign citizen.

andrewvarga 2mo

Thank you! So if that's filled then even if Hungary discontinues the double tax exemption from January I will not have to pay US taxes?
How about if I'm not invoicing as an individual contractor but having my own company here in Hungary (a small ltd), does it change anything or the same form can be used?

roger 2mo

I believe the equivalent form for companies rather than individuals is the W-8BEN-E.

taxqueen 2mo

Yes. that's correct. It is a slightly different form for a company vs. an individual.

roger 2mo

lrwfrawllg you mentioned these forms were for “non US citizen but residing in the USA” — I thought before they were for entities who are not US tax residents regardless of where they reside. Is that incorrect? For example, if my US company has non US contractors who are tax residents of other countries, should these be filled out by those individuals if their countries have tax treaties with the US?

taxqueen 2mo

It's for a non US citizen who is also not residing in the USA. If the non US citizen were living in the US, then they would be subject to US income taxes because it is US sourced income at that point. Yes. This form is for your company to have on file to show to the IRS (if requested). It is so you know the actual tax status of your contractors.

taxqueen 2mo

If you use a payroll service to help pay your contractors, it may have collected this form for you. I use Gusto with most of my clients and it definitely collects this information for all contractors including outside the USA.

roger 2mo

Got it, thanks for the for the clarification.

andrewvarga 2mo

Thank you! So to summarize:
Hungarian company / individual contractor citizens, not residing in the US, just need to fill out that form and that should take care of avoiding double taxation even if the treaty goes out of effect from next year.
That is the same regardless of the status/kind of the US company in question or which state it is based in/etc.

And I assume even if the double taxation treaty is still kept from next year, meaning it’s not cancelled that form is still worth to be filled regardless?

So whether or not double taxation treaty gets cancelled between Hungary and the US doesn’t really matter actually?

roger 2mo

My (non-professional) understanding of double taxation is that it can impact somebody who is a tax resident of Hungary but also a US citizen, or a Hungarian citizen + tax resident who owns a US based company.

meowww32 2mo

Hmm what if you live on a boat in Singapore for 2 weeks but don't leave the marina? Or enter int'l waters?

h 2mo

Then you're in Singapore.

meowww32 2mo

joyjoyjoy

meowww32 2mo

Dumb question but had to ask

andrewvarga 2mo

Somewhat related what’s the effect on taxes on US based stocks on this? The way I heard that will be double taxed if Hungary goes out of the double tax exemption treaty

pattycreates 2mo

Hey folks. I was wondering if anyone had any general info on what I should search for to file as a non-resident in California?

My questions are:
• I qualified for FEIE in physical presence. Later, in bona-fide residence.
• My income was as an independent contractor.
• Some income was W2 and some income was 1099.
When I file as a non-resident, do I:
1. Count the days that I'm in California for the taxes I earned for all income (even that's not California)?
2. All income from California, whether I'm physically present there or not, is considered taxable for California?
3. Are days count percentage based over the year? Or just days I'm actually in California.
Any useful articles on how this works out is greatly appreciated. Ty. 🙏

roger 2mo

Once I moved from California to Oregon, and I had to break down the state taxes on income earned before the date that I could demonstrate that I had moved. It was income received while I was a CA resident versus the other place I was taxed (OR).

My guess is that being able to demonstrate tax residency somewhere else (another state or Country) is probably how CA considers the money not taxable by them. FEIE is a federal thing so I doubt they will recognize it.

After moving out of CA I did have 1099 agreements with some companies based in CA and I did not pay CA income taxes on those amounts.

roger 1mo

My understanding is that based on how the laws were written there is a legal argument that one should register and pay income tax in every US state you work from, even if it’s for a single day. However I don’t know of anyone who has volunteered to go down this special rabbit hole of tax filing hell. I’m guessing these laws were written with 1960's traveling sales people in mind more so than digital nomads in the 2020's. There is a moral difference in my mind between doing business in a state (making money off the residents there) and just happening to be there while working remotely (which BTW helps the local economy). I also have never heard of a US state going after tourists for income taxes because they brought their work laptop or made some business calls.

thomster 1mo

This message was deleted.

h 1mo

This should be in #_taxes-intl. This channel is for US taxes.

thomster 1mo

Sorry man, I'll take it down

anderjaska 1mo

if I have an accountant do my federal tax return, how difficult would it be to do a state tax return myself with that filed federal return? I was to use a specific accountancy firm but they don’t do state.

nomadtax 1mo

They don’t do state? That’s odd - it’s usually done in tandem - most professional softwares provide this.

That being said, some states have free file tools on their DOR websites

anderjaska 1mo

It’s a firm in Portugal that’s offering a US/Portugal Tax return service, so you get your US and Portugal returns done in the same firm. Apparently state is out of the question though.

Thanks for the tip! So I’d just enter in whatever fields that tool asks for from the federal return and send it off?

nomadtax 1mo

I’ve never actually used them, but they are supposedly that simple

andrewvarga 1mo

mudcqfchhs just a quick follow up ❓ how about if a hungarian company is selling a SAAS subscription for US customers, is that a problem if double tax treaty gets cancelled?

shunoki 1mo

Hey! Are there any tax experts or anyone who went through the loophole of the research? Need to ask about taxes in EU with LLC in US. Cannot figure the whole thing out...pray

ghosty 30d

Confused on FEIE. If I make $100k and qualify for FEIE, do I have to wait to get my tax refund of $15kish at tax time or can I make my employer not withhold my tax money each paycheck?

nomadtax 30d

You can claim exempt from income taxes on your W4 in anticipation of qualifying for FEIE, but I usually don’t recommend this unless you’re 10000% sure you’ll qualify. If for any reason you end up not qualifying, you and your employer can get in trouble with the IRS

ghosty 30d

So most people claiming FEIE are receiving a lump sum refund around tax time?

nomadtax 30d

Yep.

nomadtax 30d

Some of my clients also reduce their withholding by increasing the number of exemptions they have, or talking to HR. So they’re still withholding, but not as much

ghosty 22d

Do people ever spend 12 months outside of the US and still not qualify?

ghosty 22d

Or are you saying if I might not plan on being fully overseas, then I’m not 1000% sure I would qualify

nomadtax 21d

Rarely, but it can happen. You need to pass the tax home test and the abode test also to qualify. But it’s usually the second point - somehow people end up not meeting the 330 days

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