2007 /
Tax Tips for the Current Tax Filing Season
Introduction / There are several major developments in tax legislation in 2007 that directly impact Americans living overseas.Foreign Earned Income Exclusion / The maximum amount you can take as a foreign earned income exclusion increased to $85,700for 2007. This amount is supposed to be indexed for inflation in following years. In addition the amount of foreign housing exclusion has now been capped at 30% of the maximum foreign income exclusion (less the base housing amount of 16% of the foreign income exclusion). And it is important to realize that the tax rate used will be based on total income, including foreign income, which represents a significantly higher rate than prior to this law. (see related article on Tax Increase Prevention Reconciliation Act of 2005)
E-Filing / The IRS is actively engaged in promoting paperless filing of tax returns and has expanded the number of forms and schedules that will be accepted electronically. Most tax preparers offer this service (although they may charge an additional fee), and it is also available with many tax preparation software packages. If you E-file your tax return, you can also make payment with an electronic funds withdrawal from your checking or savings account. For more details, check out the IRS website,
Payment by Credit Card / Payment of tax, interest and penalties can now be made by credit card for both paper and electronically-filed returns. The credit cards accepted are MasterCard, American Express and DiscoverCard and Visa. To pay by credit card, you can call or access by Internet one of the two companies offering this service. (LINK2GOV Corp. at+1888 729-1040; or Official Payments Corporation at +1800272-9829; You will be assessed a "convenience" fee by whichever company you choose.
Status of Refund / The IRS now has an automated system for determining the status of your refund. At the IRS website, go to "Individuals" and then click on "Where's My Refund?". You will enter your Social Security number, filing status and the amount of refund you are expecting and you should be able to find out if the IRS received your return, if it has been processed and when to expect your refund.
Private Delivery Service / You may now use designated private delivery services instead of the U.S. Postal Service to deliver your tax return to the IRS. The services you can currently use include Airborne Express, DHL Worldwide Express, Federal Express and United Parcel Service. Use of these services by the due date of the return meets the "timely mailing as timely filing/paying" rule of the Internal Revenue Code.
Jane Bruno is the author of “The Expats Guide to US Taxes”, an e-book offering an explanation of the tax rules for Americans overseas. If you have any tax-related questions, she can be reached by email: ’ or by phone at (+1 561) 222-9273.