Most CPAs charge by the hour. Since they perform a wide range of services, the cost of a CPA depends on what specific services a business requires. After reviewing your previous returns and interviewing you, a tax professional should be able to give you a good-faith estimate of costs.
If you're a salaried employee who takes the standard deduction, your return is likely to be simple. However, if you've encountered a major life change, such as marriage or divorce, or own a vacation home or rental property, your tax situation may be more complicated. Self- employed individuals and small business owners are more likely to be audited by the IRS, and working with a CPA will help lessen that risk.
Common services include:
● Tax preparation and planning
● Bookkeeping and accounting services
● Payroll processing
● Financial statement preparation
● Business consulting and advisory services
● Audit and review services
Tax professionals may bill by the hour, form, overall return or some combination. We use flat rates for compliance work and hourly rates for consulting services.
Ideally the same person should work with you — not whoever is available at the time. That way a relationship can be built where the accountant and you are comfortable with each other.
US Citizens: US citizens must file US tax returns on their worldwide income even if they reside overseas. This includes all income earned in foreign countries.
US Permanent Residents (Green Card Holders): US permanent residents, like US citizens, must file US tax returns on their worldwide income regardless of where they live.
Resident Aliens for Tax Purposes: Tax resident aliens who meet certain conditions must file US tax returns on their worldwide income even if they live overseas. This applies to those who pass either the Physical Presence Test or the Substantial Presence Test.
Foreign Spouses of US Citizens or Permanent Residents: When a US citizen or permanent resident chooses to file jointly with their foreign spouse, the foreign spouse must also file US tax returns on their worldwide income.
Overseas Residents with US-Source Income: Individuals living outside the US but earning US-source income (such as investment income, rental income, or US business income) must file US tax returns on such income.
April 15 - Filing deadline for US residents' individual income tax returns and FBAR reporting; deadline for 6-month initial extension application (Form 4868)
June 15 - Filing deadline for overseas residents' individual income tax returns or 4-month initial extension application (Form 4868)
October 15 - Filing deadline for overseas residents' individual income tax returns and FBAR reporting with initial extension; deadline for additional 2-month second extension application
December 15 - Filing deadline for overseas residents' individual income tax returns with second extension
FBAR: US citizens/permanent residents must report to the US Treasury if the aggregate value of all foreign financial accounts (e.g., Korean accounts) exceeds $10,000 at any time during the year.
FATCA: The Foreign Account Tax Compliance Act, implemented since July 1, 2014, requires all financial institutions worldwide to regularly report information about financial accounts held by US taxpayers (e.g., US citizens, permanent residents, or foreign entities with 10% or more US ownership) to the IRS annually. Account information above certain thresholds must be reported on Form 8938 and included in individual tax returns.
ndividuals with US tax filing obligations (US citizens/permanent residents) have worldwide tax liability, so they must report capital gains from Korean real estate sales. However, capital gains taxes paid in Korea can be claimed as foreign tax credits against US income tax liability.
To prevent double taxation, individuals or entities that pay taxes in foreign countries on foreign-source income can claim foreign tax credits when filing US tax returns.
For foreign (e.g., Korean) earned income, the US provides tax exemption benefits up to certain amounts. To qualify for these exemption benefits, your tax home must be in a foreign country, you must spend 330 or more days abroad during the past 12 months or be a bona fide foreign resident, and you must timely file Form 2555 with your tax return.
When receiving gifts of cash or property in Korea, you must report the gift through Form 3520. Form 3520 is for reporting gifts, not for tax purposes, so it must be filed separately from tax returns. Failure to file may result in penalties of 5-25% of the gift amount.
The IRS has introduced a voluntary disclosure program called Streamlined Filing Compliance Procedures for those who failed to timely report foreign assets or income from such assets. By voluntarily filing the past 3 years of tax returns and 6 years of FBAR reports, individuals can obtain relief from potential penalties and disadvantages. However, this procedure is a relief measure for those who failed to file timely without willful intent.
When citizens and permanent residents renounce their citizenship or permanent residency, they are subject to expatriation tax, which treats all worldwide assets held as of the expatriation date as if they were disposed of.
Applicable to: US citizens / Permanent residents who were tax residents for 8 or more years out of the 15 years preceding the expatriation date
Those subject to expatriation tax must file Form 8854. Failure to file will result in being deemed not to have renounced US citizenship (permanent residency) under US tax law, continuing the US tax filing obligation for income generated after expatriation.
