US Expat Income Tax Changes for 2016

Included in the income tax changes for 2016 are some provisions that may affect expatriates of the United States.  We have summarized some of the biggest changes below.


FBAR Filing Date Changes

As a result of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 passed by Congress, there are significant changes in due dates for FinCen Form 114.  This form is also known as the Report of Foreign Bank and Financial Accounts, or FBAR.  For tax years beginning after Dec 31, 2015, Congress has changed the filing deadline to April 15th (from June 30th), to coincide with the income tax return filing deadline.  This change also allows for a six month extension to file FinCen Form 114, which was not allowed in the past.  The FBAR extension is similar to to the regular tax return extensions available to expats.  If you live outside the United States, you will receive an automatic two month extension to file Form 114.  If you need additional time, you can file an extension to October 15th.  

The new reporting due dates go into effect for 2016 FinCen 114 Forms, which will be due on April 15th, 2017.  2015 FinCen 114 Forms are still due on June 30th, 2016.

Due to increased scrutiny and severe penalties being imposed by the IRS, it’s imperative that all individuals and businesses with any financial interest in offshore accounts to review their filing requirements for FBAR.  We can help you determine if you are subject to filing – please contact us for a free, confidential consultation.


The Standard Deductions Have Increased

Taxpayers have the choice to itemize their deductions, or use the standard deductions.  For those who do not itemize, the increased standard deductions in 2016 will help lower your taxable income.  The standard deduction for those filing “Head of Household” increases from $9,250 in 2014 to $9,300 in 2015.


Increase in Exemptions

Exemptions are allowed for each person claimed on your tax return.  These exemptions help lowere your taxable income.  The personal exemption amount for 2015 is $4,000, up from $3,950 in 2014.  Personal exemptions start phasing out as your taxable income increases. 


Other Tax Changes for 2016

As happens every year, there were a number of other changes made to the tax code laws pertaining to both the 2015 and 2016 filing years.  If you have any specific questions concerning your personal tax situation and how you may be affected. please feel free to contact us.