Representatives Don Beyer (D-VA) and Dina Titus (D-NV) introduced the Tax Simplification for Americans Abroad Act of 2023 (H.R.5432) on September 13, 2023.
While limited in its scope, it makes important changes that simplify tax return filing requirements, expand the type of income which can be excluded from tax and make detailed changes in FBAR and Form 8938 reporting rules.
In general, the Tax Simplification for Americans Abroad Act (“TSAA”) mandates that a simplified income tax form be made available for certain taxpayers residing abroad, expands for eligible individuals the scope of income allowed to be excluded from tax under existing section 911 (Citizens or Residents of The United States Living Abroad) and changes the Bank Secrecy Act/anti-money laundering rules and the tax reporting rules enforced by Form 8938 (Statement of Foreign Financial Assets).
Use of the new simplified form is not mandatory; individuals can choose not to use it. The BSA/AML and Form 8938 rules are applicable not just to individuals residing abroad but to all individuals.
In a September 13, 2023 Press Release, the two sponsors said:
Today, U.S. Representatives Don Beyer (D-VA) and Dina Titus (D-NV) announced the introduction of the Tax Simplification for Americans Abroad Act, legislation to help American taxpayers living overseas comply with their U.S. tax obligations by calling on the IRS to create a short form certification for Americans living abroad who owe no U.S. tax and earn below $400,000 annually. The bill would expand the Foreign Earned Income Exclusion to include additional types of income that are earned overseas like pensions and distributions from retirements funds. It would also consolidate duplicative and burdensome forms that taxpayers must file under the Foreign Account Tax Compliance Act (FATCA) and the Bank Secrecy Act.
“Ordinary Americans living abroad are often overlooked when U.S. tax policy is written, which can make it extremely difficult and expensive for them to navigate the tax system,” said Rep. Don Beyer. “I saw a record-breaking number of Americans renounce their citizenship when I served as the U.S. Ambassador to Switzerland, and the needless complexity of the U.S. tax code was often cited as a reason. This bill would help ordinary Americans fulfill their obligations without having to retain an expensive accountant to certify that they owe no U.S. taxes and remove some of the frustrations faced by Americans living abroad who just want to follow the law.”
“Americans abroad face a uniquely complex set of reporting requirements that we here at home aren’t subject to. I’m joining Rep. Beyer to create a simplified income tax return for taxpayers living abroad because Americans shouldn’t have to jump through extra hoops simply because they reside or work overseas,” said Rep. Dina Titus, Chair of the Americans Abroad Caucus.
“This legislation is an important step in the right direction. It greatly simplifies things for many Americans abroad. Much remains to be done, but this is a step that we have all asked for for a long time. Retirees living overseas will be especially interested in the details,” said Marylouise Serrato, Executive Director, American Citizens Abroad.
Click for a Technical Explanation of the Bill and a copy of the Bill itself.
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