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It is not uncommon for Americans and resident aliens to earn income abroad. If you earn any kind of income from foreign sources, it is essential that you understand the reporting requirements and tax implications of doing so. To discuss your situation with a seasoned tax advisor, turn to Sharrard McGee & Co PA in High Point and Greensboro, NC, and read on to learn more.

A Tax Advisor Discusses the Implications of Income Earned Abroad

Reporting Requirements

Both resident aliens and U.S. citizens must report all worldwide income on their U.S. tax returns. This includes income from all sources within and outside the country, regardless of whether you received a Form 1099, a Form W-2 and Tax Statement, or their foreign equivalents.

tax advisorYou must also report any foreign investment or bank accounts on your U.S. tax return. As a U.S. citizen, you are required to file an income tax return every year, regardless of whether you lived in the United States during the tax year for which you are filing.

Potential Consequences

Failing to report income that you earned from foreign sources may be a crime. The Internal Revenue Service has partnered with international agencies to pursue those who hide funds in offshore accounts to evade their tax obligations.

Ultimately, the IRS wants to ensure every citizen and resident alien reports their income accurately and pays the correct applicable taxes. Consequences for failing to do so include significant penalties and fees, additional taxes, fines, and even prison time.

If you earn income abroad, or you have foreign bank accounts, a tax advisor from Sharrard McGee & Co PA will help you devise viable strategies for protecting your financial security. To learn more about the tax preparation and accounting services they provide, visit their website, and call (336) 884-0410 to talk to someone in High Point or (336) 272-9777 to make an appointment with a tax advisor in Greensboro today.

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