Effective for 2011, the Obama administration has proposed to increase the income and capital gains tax rates on single individuals with incomes of more than $200,000 and married couples with incomes exceeding $250,000. Currently, the top two rates are 33 percent and 35 percent but they are temporary and will expire after December 31, 2010. The Obama administration has proposed reinstating the 36 percent and 39.6 percent rates. Congress could allow the higher rates to return after 2010 or make them retroactive to January 1, 2010.
In light of the recent “reductions in force” among US companies abroad, it is especially important for all Expats to contact a qualified expat CPA for year-end tax planning. Demobing (voluntary or otherwise) prior to December 31 poses a unique situation for many Expats, but does not necessarily mean that the Foreign Earned Income Exclusion (FEIE) is total lost. If you have demobed, you are eligible for a partial FEIE. For 2009, the maximum FEIE is $91,400 and will increase to $91,500 for 2010.
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Nice Post. I have many years filling Expatriate Tax Returns. If anyone reading this post ever has any questions, feel free to visit my website.
I used Palazzo CPA for a while as well but they didnt include my ‘rebate’ from last year and made me fix my own issues about incorrect IRS records…. I paid them and gave them power to do it yet they simply passed it back to me.