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Everything About Tax for Expats

Myth #1: American expats don’t have to file annual U.S. tax returns because they live abroad or already file a tax return with a foreign government

This is one of the biggest myths when it comes to tax for expats. Even if a person is living abroad ( www.EsquireGroup.com/tax-for-expats ), he or she is still required by the U.S. government to file annual tax returns regardless of which country they live in and earn money. Every U.S. citizen and permanent resident is required by law to comply with U.S. tax laws, which require filing a tax return.

Myth #2: You don’t need to report your foreign income on your U.S. tax return

This is another big myth about tax for expats. Some people believe that they only need to report their U.S. income on their U.S. tax returns, but this is simply not the case. The U.S. is one of only two countries in the world that taxes its expats on their global income. In other words, regardless of where a U.S. citizen lives and works, they are required to report all of their income. That’s right: ALL of it.

Myth #3: Tax-Deferrals work the same in my country of residence as they do in the U.S.

One myth people erroneously believe about tax for expats is that if the contribution they make to their retirement or savings plans are deferred in their country of residence, they are automatically tax-deferred in the United States. Unfortunately, this is untrue. In many countries, people are allowed to contribute a pension plan or other investment savings plan and enjoy tax-deferrals. However, that country’s financial regulations and allowances have absolutely no bearing on the U.S. government’s taxation of your pension or investment plans. In fact, the U.S. can tax expats on both the annual employer contributions and earnings.

Myth #4: I don’t need a lawyer

One of the mistakes many expats make when it comes to taxes for expats is believing that they have all the information and resources they need to comply with international tax laws and make smart financial decisions.

Unfortunately, tax laws are often very complicated, and international taxation is even more so. There are a number of factors people don’t realize when it comes to taxes for expats. Furthermore, there is a lot of misinformation out there that could potentially cause even the most willing and well-meaning expat to fall into non-compliance with U.S. tax laws. In recent years, U.S. laws regarding non-compliant

The best thing for an expat to do is to consult with an experienced lawyer who specializes in international tax law to make sure that they are fully compliant with U.S. tax laws, as well as the laws of their country of residence. But an experienced lawyer won’t only help their client stay compliant with tax laws, they’ll also help them plan for their financial future ( www.EsquireGroup.com/about ), advising them on how to make smart decisions with their income and investments and avoid double or over-taxation. If a person is already out-of-compliance with U.S. tax laws, an international tax lawyer will work with them through various legal channels to help them get back in the good books of the IRS.

Importance of External Audit for Your Business

The process of audit ensures that the your books reflect a true picture of the financial health of the business. There are two types of audits- internal and external. In an internal audit ( ethicsplusuae.com/audit-assurance ), the evaluation process is carried out in house by the employees of the organization and in an external audit, the evaluation is carried out by an outside firm.

An audit basically provides an assurance to the shareholders that the financial statements of the company are accurate and represented in an appropriate manner. Here are four stages of a financial statement audit.

Stage 1: Planning and risk assessment

The primary stage of audit, planning and risk assessment involves around gaining an understanding of the business in which it operates. This information is used to assess the risks associated with the business and its impact on the financial statement of the organization.

Stage 2: Testing internal controls

At the second step, the internal controls of the organization are tested. This includes checking the security of the computer and reconciling the accounts. The auditor looks whether the assets are safeguarded or not and also looks whether the internal controls are in place or not. If not, the same is reported in the audit report. The auditor then decides whether he should base the financial audit on sample transactions or whether he should test all the transactions. A strong team of professionals offer services for audit in Dubai. They ensure that the organization complies to the requirements specified by the body.

Stage 3: Substantive Procedures

At this stage, evidence is collected that the figures represented in the financial statements are true and reliable. If the internal controls are found to be strong and efficient, auditors rely on this stage. There are different ways in which this stage works. One is conducting an analysis of the financial statements through methods like ratio comparison. Another is a reconciliation in cash and bank. There is examination of the documents and speaking to the management for more information.

Stage 4: Finalization

This is the last and final stage of auditing where the auditor has to compile the reports and present the final report to the shareholders, management and the third parties. There are many types of software available which can be used to perform the audit. It helps review all the transactions in one go without making a mistake.

An audit is important for an organization and it helps build trust and confidence of the users. It is an expensive examination of the financial statements of the organization and it is not something that can ever be ignored. If you do not have adequate knowledge about audit ( https://ethicsplusuae.com/ ), you can hire professionals for audit in Dubai and they will guide you with the same. Grow your business with the right partners by your side.

Everything About Internal Audit

Internal controls are very important and every organization should have them well placed. Depending on the size and type of the organization, the internal controls need to be placed. In today’s marketplace, internal audit is of prominent importance. Internal controls and internal audit ( Ethicsplusuae/internal-audit ) are inter related. Internal audit helps in the facilitation of compliance with the laws and regulations and gives peace of mind to the management to operate their business in an efficient manner. Internal controls lay a system where the employees and the employers are aware of their responsibility and conduct their operations in an ethical manner. Internal audit helps a business prepare for the external audits which will be carried out on an annual basis.

It is a key factor in building strong client relationships. It helps in adhering to the regulations and reduces the fine and penalties. Internal audit in Dubai helps in building strong business relationships while maintaining strong internal ethics and compliance. Professional experts offer services of internal audit which will help you remove any loopholes and build a strong employer employee relationship. If you have efficient internal audit, the external audit will look easy and convenient. There will be lesser number of queries and issues raised by the external auditor if the internal audit is carried out from time to time. It will also help you prepare the final accounts with ease and to comply with the laws of the State.

It is ideal to hire the services of experts for the purpose of internal audit as they are well aware about the latest laws and amendments made from time to time. Professionals offer services for internal audit in Dubai and will also help you mitigate risks. Every business faces certain risks that need to be mitigated in order to reduce the losses as much as possible and internal audit can help you do the same. Consider the size and type of your business and build a strong internal control system so as to make the business ethical and efficient.

There are a number of taxation rules and auditing rules that you need to abide by and if you have a professional helping you with the same, the task will become much easier. Internal audit is not restricted to preparing the financial statements, it goes much beyond that. It also helps serve a number of issues with ease. Whatever the size and type of your business, internal audit is important and very helpful. Choose the right professionals to help you achieve success and take your business ( https://ethicsplusuae.com/ ) to its potential with strong internal controls and an efficient internal audit team led by an experienced professional from the industry.

Tax for Expats – Six Things you Need to Know About Filing American Taxes

Paying tax for expats is intimidating if you don’t know how it affects you. The good news is that you probably don’t have to worry because most Americans don’t owe U.S. tax ( www.EsquireGroup.com/tax-for-expats ) when they live in another country. This is because the government has put in place important tax credits, tax deductions, and tax exclusions. The government took these steps to make sure your income isn’t taxed twice.

There are other important things you should know about tax for expats which we’ll look at in this post.

Tax for Expats – 6 Things you Should Know

1. How to Qualify for Exclusions

To qualify for benefits, such as the foreign tax credit, you must qualify as a legal expat, earn foreign income, and file your income tax for expats.

2. Tax for Expats – Income, Credits, and Special Situations

If your global income is higher than the filing threshold, you have to file an American Federal Tax Return every year. It’s important to note that the filing threshold for tax for expats varies from state to state.

3. Tax for Expats - What’s Included in Your Income

The following is considered income: Your wages and salary from American and non-American sources, interest, rental income, dividends, etc. If you’re self employed, the income threshold is $400. If you’re eligible for certain refunds and credits, you should file even if tax for expats doesn’t apply. Certain situations, such as owing special taxes, could subject you to having to file.

4. Tax for Expats – When to File Your Return

As an expat, you’re automatically given a filing extension to June 15 if you’re living outside the country on the deadline of April 17. But if you owe taxes, penalties and interest begin on April 17, so it’s best to pay your tax for expats by this deadline.
Tax for expats deductions and exclusions might be available to you if you return to the U.S., but you’ll have to file your taxes by the 17th of April because you’re, once again, an American resident.

5. Income Tax for Expats and The Foreign Tax Credit

If your income exceeds the Foreign Earned Income Exclusion, or if you’re living in a country with high taxes, the tax for expats Foreign Tax Credit might help eliminate or offset U.S. tax liability. This tax credit is a dollar-for-dollar credit on taxes you owe to the foreign country you live in.

There are other ways to lower income tax owed, but they get a little tricky. If your situation is like the above scenarios, you should get help from a tax for expats expert.

6. Wanting to use the Foreign Earned Income Exclusion

To qualify for this exclusion, you must pass the residency test. There’s a Physical Presence Test – it requires that you’re physically present in the foreign country for 330 of any 365-day period. Under the Bona Fide Residency Test, you have to live overseas for at least one calendar year with no intention to move back to the States in the near future. Under the Bona Fide Residency Test ( www.EsquireGroup.com/About ), you must have lived overseas for at least one calendar year and have no immediate intention of moving back to the US – so temporary overseas contractors and those on assignment won’t qualify for the tax for expats exclusion.

Importance of Internal Audit for Your Business

There are a number of accounting firms that offer services of internal audit in Dubai. It is important to determine the type and size of business you manage in order to adhere to the accounting standards and laws. Business owners should not look at an auditing firm as an outsourcing cost for the purpose of bookkeeping but it should look at them as an integral business partner. Not all accounting firms offer all the services ( ethicsplusuae.com/internal-audit ), while some firms hold an expertise in audit and assurance, there are many who are experts in taxation or book keeping. The business owner should determine their requirement and choose a firm that is a best fit for the needs of the business. Internal audit is an integral business activity that should not be overlooked. Audit and assurance increase the trust of the third party on the company.

Hiring services for internal audit in Dubai should not be considered as an extra expenditure but it should be looked at as a service that is integral for the growth of the business. Business owners are not experts in bookkeeping and preparing financial statements and if they outsource the service, they will be able to concentrate on areas that require attention. Whether the business is small in size or large, accounting and audit is an integral part. Accountants prepare the financial statements of the company and these financial statements are then audited and provided to the readers which include creditors, shareholders, investors and government. Different users of financial statements have different requirements and it is important to provide adequate information to every user. Financial statements prepared by expert accountants provide detailed information and also follow the rules and regulations of the State. However, it is important to understand the expertise of the auditing firm before hiring them so as to make a well informed decision. Organizations across the world seek the services of experts so as to ensure that the financial statements are prepared as per the requirement and adequate financial information is reflected in the same. It also helps in taxation and filing of annual returns.

When accounting services are outsourced, the business owner has more time on hands to look at the matters that call for his attention and it also saves the cost of hiring an accountant. The services offered by experts are efficient and they also provide guidance with regard to investment and finance decisions. Hiring an expert for accounting service is like hiring an advisor who will help you increase your wealth and grow your business ( https://ethicsplusuae.com/ ) in the best possible manner. Internal audit ensures that the external auditors rely on the financial statements prepared by the accountants.