The U.S. income tax system imposes a tax based on income on individuals, corporations, estates, and trusts. The tax is taxable income, as defined, times a specified tax rate. This tax may be reduced by credits, some of which may be refunded if they exceed the tax calculated. Income and deductions are recognized under tax rules, and there are variations within the rules among the states.
Taxpayers are required to file tax returns and self assess tax. Tax may be withheld from payments of income (e.g., withholding of tax from wages). To the extent taxes are not covered by withholdings, taxpayers must make estimated tax payments, generally quarterly. Tax returns are subject to review and adjustment by taxing authorities.
Taxable income is gross income less exemptions, deductions, and personal exemptions. Gross income includes "all income from whatever source". Certain income, however, is subject to tax exemption at the federal and/or state levels. This income is reduced by tax deductions including most business and some nonbusiness expenses. Individuals are also allowed a deduction for personal exemptions.
The U.S. federal and most state income tax systems tax the worldwide income of residents. A federal foreign tax credit is granted for foreign income taxes. Individuals may also claim the foreign earned income exclusion. Individuals may be a citizen or resident of the United States but not a resident of a state. Many states grant a similar credit for taxes paid to other states. These credits are generally limited to the amount of tax on income from foreign (or other state) sources.
Every year a tax return needs to be filed, also if you are not living in the U.S. anymore. Expatax can assist you with preparing and filing the state and federal tax return. We work with a fully qualified and very experienced CPA in the Netherlands. This means that your tax returns can be prepared here while you are in the Netherlands, no need to send anything abroad.
Tax Return Preparation Procedure
Please note that we strive for a paperless tax preparation process. It is the most effective, time efficient and environmentally friendly way to work. Of course if you would like to receive paper copies of any documents prepared by us, simply ask!
Please contact us if you would like us to assist you with your tax return.
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