US Federal & State returns
Wherever you live, as a US Citizen or Green Card Holder you are required to file your US Federal Tax return. If you keep a home in the US or are abroad temporarily, you may also be required to file a State return. Here at Stanton Financial Consulting we look at your individual situation and file the returns based on what would be best for you. If you have income, investments, or property from both the US and the Netherlands the situation may be complicated, and it is easy to pay more tax than you should. All returns produced by Stanton Financial Consulting are reviewed by a qualified US tax professional who is enrolled to practice before the IRS.
What you need to know:
Tax convention between US & NL – This treaty is in place to avoid both double taxation and tax avoidance. It sets rules that both countries follow to show where different income should be taxed. This affects not only income from employment or from your business but also capital gains and the sale of a property.
Social Security Totalization Agreement – this agreement between the US & NL is less well-known than the Tax Convention (see above) but is just as important. It dictates which country you should pay social taxes and also whether you can continue to claim US benefits whilst in the Netherlands.
Foreign Income Deduction (Form 2555) vs Foreign Tax Deduction (Form 1116) – Although US Citizens and Green Card Holders are taxed on Worldwide Income there are two ways to reduce this liability. Which of the above options you choose determines the credits (refundable or non-refundable) that you can claim. By simply opting for Foreign Income Deduction, which is the default setting of many popular expat software packages, you may miss out on valuable tax credits and the seemingly cheaper option of preparing your own tax return using such a software package may well end-up being the most expensive way of filing your taxes.
Self-employed in the Netherlands? – Many self-employed US citizens in the Netherlands needlessly pay Self-employment tax as they are unaware of the process to obtain and file the necessary documentation. We can help you understand what you need to do to avoid this tax and walk you through the application process.
FINCEN114 (FINBAR) – If you own, or have signatory over, non-US bank accounts that have had a balance of more than $10,000 in aggregate at any point during the year you must file FINCEN114 to report the balances.
Not paid taxes in the US for a few years? – Do not Panic! We can help, please see the service page called “IRS Streamlined Process”