Expat Services

Palazzo & Company, CPA serves Expat Clients working overseas in South America, the Middle East, Central Asia, Europe and the Balkans. We are committed to providing the highest level of service to our Expat Clients. A sampling of the value added services we provide follows:

  • Amended Returns
  • Checklist and Forms to Help Make Filing More Easy
  • Communications – Simple and Easy
  • Experienced Expat CPA Review and Preparation of all Returns
  • Extensions and Special Form Filing
  • Federal and State Returns – Fixed Fee
  • IRS Representation and Correspondence
  • Lobbying Congress to Protect and Preserve the Foreign Earned Income Exclusion
  • Newsletter for Expats
  • Personal On Site Visits if Permissible by Employer
  • Prior Year Preparation of All Returns
  • Review of Previously Prepared Returns for New Clients
  • Year Round Planning and Support

Palazzo & Company, CPA works diligently to protect, preserve and increase the benefits of Expats working overseas. In the past, Congress considered repealing the foreign earned income exclusion. Working on our Expat Clients behalf we wrote and called congressional leaders and budget staffers to strike the repeal. Along with many Expats, companies and associations we were successful.

Expats can depend on our services year round. As a part of the Expat tax return preparation we continue to provide value to our clients by being available to answer questions, assist in planning and advise Expats on ways to maximize their tax savings.

Because of the time zones and distance between us we strive to make the whole engagement as convenient for you as possible. We offer various ways of communicating with us and provide you with the resources to help you efficiently gather the information we will need to better serve you.

Foreign Earned Income Exclusion

As an Expat working in a foreign country you may be eligible to exclude up to a certain amount of foreign earned income from taxation as well as deduct certain qualified housing cost. A foreign country is any country that is not the United States, or a territory or possession of the United States. The foreign earned income exclusion is not available to Expats working in a restricted country, unless the company you work for has a license under the Office of Foreign Asset Control to do so. To receive the exclusion of income an Expat must qualify for the foreign presence test or bona fide residence test.

Presence Test – Simply put the presence test is being overseas for a full 330 days during a twelve month period. This can be any twelve month period that benefits the Expat the most. A full day begins at midnight and runs twenty four hours. The twelve month period can slide backwards or forwards as long as the Expat meets the 330 day test.

Bona Fide Residence Test - Expats who work in foreign countries may be eligible for the bona fide residence test. To qualify you must be a bona fide residence of a foreign country for a full calendar year and expect to be overseas indefinitely. When in doubt an Expat should use the presence test until a bona fide residence determination can be made. The presence test is especially important in case of an unforeseen reason you do not make a full calendar year. In addition, to qualify for this test you must never declare yourself a nonresident of the foreign country and you must be subject to that country’s income tax, unless the country does not have a personal income tax such as UAE, Kuwait, Saudi Arabia etc.

Combat Zone - There is no IRS benefit for Expats working in a combat zone. This is reserved for the US Military. In some circumstances additional time to file may be granted but there is not combat zone tax exclusion.

Waivers of Test Requirements – The only waiver of the time requirements is having to leave a foreign country do to hostile actions, adverse conditions or war. Note: see the IRS notice that declares such areas available for a waiver. To even be considered for this waiver your tax home must have been established in the foreign country prior to the hostility or war.

Note: Do not try and interpret the IRS regulations on your own or use inexperienced local firms or franchise tax partners. Use only professional Expat CPA Firms.