Tax Tips for US Citizens

Rebecca Wang from Deloitte says tracking down forms from Chinese banks can be a difficult but necessary part of filing

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Note: Before filing taxes, contact a licensed professional. Find one you can trust in the AmCham China membership directory.

Tax day this year comes on April 18 for US citizens. For those living abroad, the requirements can be unclear, varying on a state-by-state basis and depending greatly on income level.

Rebecca WangRebecca Wang, Director of Global Employer Services at Deloitte Beijing, spoke at the March 24 event “2016 U.S. Income, Gift and Estate Taxes – Planning and Compliance.” Wang, a native Beijinger, has more than 15 years of experience in providing tax services to multinationals, state- and private-owned companies, law firms and individuals. Her clients drop into her office or call her from around China's big cities, and across Asia-Pacific as well. She answered a few questions for Business Now just before the event.

What do people often overlook when filing taxes?

One thing most people may not pay attention to is that they have some IRA pre-tax deductions. They may not have 401Ks in the US, so they can contribute to traditional IRA or Roth IRA and have a pre-tax deduction. I see a lot of my clients don't remember that kind of thing.

Also people on foreign assignment from states such as Utah and Oklahoma, it's quite difficult to break state residency so they need to continue to file for state taxes as well. It's different for people from California or New York, where it's possible to break state residency. And then there are seven states that have no state tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

What changes have you noticed in the past year?

People are more aware of the compliance regulations for them. They pay more attention to reporting requirements, especially the information disclosure requirements like foreign bank accounts and foreign financial assets located outside the US.

How hard is it to get those documents that must cross countries and financial systems?

It's definitely difficult for US people to get those statements from financial institutions like banks. They need to go to them to request or keep a good record themselves.

What's the best way to get the right kind of information?

China doesn't have a form like the 1099. You have to go to the bank and ask them to print a bank record statement. You have you pick out the interest income, or any income, yourself. Those can't be summarized by the bank or financial institution.

If China has tax reforms in the future, the banks will need to provide that kind of information to Chinese people. Then they will have the system like the US. But now it's still too early (and the number of US citizens in China too small to rationalize a change in process).

Who should be concerned about US estate tax laws?

In China there is no estate tax or gift tax, so Chinese nationals who go to get a US green card may do some estate planning first.