Tax Insights

Your Guide to State, Local, Federal, Estate + International Taxation

Will you be battling in the international tax arena in 2018?

international taxIf you answered yes to this question, then this blog may be for you! Whether you are a seasoned warrior or a new comer in the International Tax Arena, you want to know your opponent’s weaknesses and strengths, in order to plan and come out VICTORIOUS!!!

Close your eyes; can you hear that? Is it the roar of the stadium [Roaring Crowd] or is it your army of tax preparers at your back ready to defend you? (A’oo! A’oo! A’oo!) Either way your enemy is the same… [Battle drums]…the unmerciful giant, defiant of death, the dreaded TAX CODE!!! [Enter 8’ death like figure].

Ok, ok… taxes aren’t this exciting, I know. But how else do I draw you in? If they were this exciting, something tells me you would be more likely to plan for your tax battles and struggles. With that said, imagine it is this exciting, so when the time comes, your 8’ death like figure will only be, may be, 3’ and a little less dark and mysterious.

No? You can’t imagine? Ok, well here are your *2018 inflation adjustments for individuals in the international tax arena:

  • Amount that can be excluded from the mark–to–market gain upon expatriation of a covered expatriates – $713,000,up from $699,000 in 2017
  • Foreign earned income exclusion – $104,100, up from $102,100 in 2017
  • Annual gift tax exclusion for gifts to any person – $15,000, up from $14,000 in 2017
  • Annual gift tax exclusion for gifts to non-citizen spouses – $152,000, up from $149,000 in 2017
  • Reporting of large gifts received from foreign persons – $16,111, up from $15,797 in 2017
  • Average annual net income tax that must be imposed for five taxable years ending before the date of the loss of U.S. citizenship for an individual to be considered a covered expatriate – $165,000, up from $162,000 in 2017

You have now been given the knowledge to be able to step into the International Tax Arena with an upper hand, but how you choose to use this knowledge is up to you: Go it alone and plan ahead, do nothing and face the struggles as they approach, OR send word to your tax preparer/s to aid you in this battle (the sooner, the better)…the choice is yours and yours alone! Good luck!

*You can find these 2018 inflation adjustments and others by viewing Revenue Procedure 2017-58 that was recently published by the IRS.

Chris Morrison, CPA, MAFM