Picnic with PraguExpats

 

 

picnic expats_finale2

 

Dear clients, partners and friends of PraguExpats,

we would like to invite you to celebrate our 3rd anniversary with us!

It has been 3 years already and we would like to see you and thank you for your support in person.

We will meet in the park Riegrovy sady and have this picnic together.

There will be coffee and refreshment for free. We have some presents for you as well.

Please feel free to come and invite your friends!

Looking forward to see you on Sunday 16th August in Riegrovy sady.

Your Team of PraguExpats

 

 

City of BEER … Plzeň

Pilsen, or Plzeň in Czech, is the third largest city in the Czech Republic. Located in West Bohemia, Pilsen is one of the oldest cities in Central Europe, dating back to 976. It has been a crossroads for trade, one of the leading industrial cities in the world, and a melting pot where Jewish, Czech, and German cultures met.

 

2015 marks Pilsen’s elevation to the European Capital of Culture, which makes it the perfect time to go see the sights in the Czech Republic’s fourth largest city. Here’s some things to do in this crown jewel of Bohemia.

 

Take in the Sights

 

Although it was the center of Austro-Hungarian and Czech manufacturing for large amounts of time, Pilsen is not your typical industrial city. The center’s architecture combines features from several eras of Czech history— ranging from the 13th Gothic splendor of St. Bartholomew’s Cathedral (with the largest tower in the Czech Republic) to the Neo-Renaissance stylings of the Museum, whose current home was opened in 1913. Of special note is the Moorish Revival architecture of the Great Synagogue, which is the second largest synagogue in Europe.

 

Pilsen’s scenic center is also criss-crossed by a number of promenades and parks, which are perfect for picnics in the afternoon or lounging in the evening. Live music performances take place all summer long at a variety of outdoor cafes and bars. Take a stroll along the river or visit the botanical gardens— Pilsen boasts a great variety of green spaces in many parts of the center.

 

See a Puppet Show

 

Although Czechs all throughout the country love puppet theater, Pilsen is the undisputed heart of the art form in the Czech Lands. Legendary puppeteers such as Josef Skupa and Jiří Trnka both called Pilsen home, and you can still see their legacy today in the city gallery (which boasts an excellent collection of both of their works) and in the puppet shows performed around town. The Puppet Museum (located on Náměstí Republiký) boasts an extraordinary amount of puppets from the 19th and 20th century, as well as hands on exhibits for children of all ages.

 

As part of Pilsen’s status as the European Capital of Culture, several visiting puppeteers and puppet theaters will be also visiting the city and performing. For example, from August 28th to the 30th, the Spanish puppet theatre Carros De Foc will be bringing their gigantic puppets to Pilsen for a public exhibition. Other companies such as Divadélko JoNáš have year round performances for both children and adults. More information can be found at: http://www.pilsen.eu/tourist/

 

Drink an Unfiltered Pilsner Urquell

 

Beer brewing has a long tradition in the Czech Republic, but the world-famous Pilsner Urquell beer has a relatively recent history in an ancient city. In 1839, the town officials voted to create a public brewery in order to satisfy local demand for better beer. In order to do so, they invited the Bavarian master brewer Josef Groll, whose family ran a brewery. More importantly, Groll had also begun experimenting with new techniques of brewing beer.

 

Pilsen proved to be an ideal location for Groll’s experiments. The local water in Pilsen (an essential component of any brew) was unusually soft, and the Czech hops imported from Žatec were known for their mild, spicy, and earthy flavor. The combination of these ingredients, plus Groll’s Bavarian fermentation techniques resulted in a completely new style’of beer— the Pislner. Today the Pilsner style of beer brewing is so famous that you can find pilsner beers all over the world, but the original remains famous.

 

If you’re interested in seeing how modern day Pilsner Urquell is made, the brewery offers tours in English and Czech. Or if you’re just interested in having a cold beer on a hot summer day, the pub Šenk na Parkánu (Veleslavínova 59/4) is the only place in the world to find unfiltered Pilsner Urquell, an experience worth having and repeating.

Burn some witches and kiss your true love

Witches and roses may seem to be two completely opposite things to most Americans, but here in the Czech Republic, they mark two of this country’s beloved holidays— Čarodějnice/Pálení Čarodějnic (The Witches or the Burning of the Witches, respectively) and První maj (May Day), which are celebrated with bonfires, heavy drinking, and lovers kissing. Although these holidays may seem completely unrelated to us, in the Czech Lands, they are both connected.

 

Čarodějnice is the first of the two. During the night of April 30th, Czechs light bonfires and burn paper effigies of witches to mark the transition from winter to spring. The ceremonial burning of the paper witches is believed to ward off bad luck (and in more pagan times, actual witchcraft), since traditionally, witches were said to gather every year on this date. The fires are symbolic threats to keep the witches away, but in our modern times, they serve more as an excuse for general mischief and drinking with friends.

 

Čarodějnice is not just a Czech holiday, however. The night is celebrated throughout Central Europe under a variety of names. In Germany and Austria, it is commonly known as Walpurgisnacht (after the ancient German Saint Walpurga) or Hexennacht (Witch’s Night). Today, most Czechs celebrate the holiday as an excuse to meet up with friends and drink, and bonfires and revelers can be found even in major cities like Prague— though many Czechs claim the best Čarodějnice revelries happen in the villages (for obvious reasons).

 

The next day, May Day, (or První maj/The 1st of May), is known throughout the Czech lands as the Czech Valentine’s Day, though, like Čarodějnice, it has a complex history. May Day, like in England and Colonial America, was often a time of springtime celebrations in villages based on the Maypole, a tall sapling which men from the village cut down in the night during Čarodějnice celebrations. On May 1st, the Maypole is decorated and erected somewhere prominently in the village, and the men from the village guard it throughout the week against raids from other villages, who seek to steal as many Maypoles as they can. Traditionally, at the end of the week, the men who defended the Maypole against outsiders are allowed to go around the village to receive small gifts and kisses from unmarried women. Then, in the evening, the villagers gather for a ball and celebration to welcome the coming of spring (and give the young men time to court the young ladies of their fancy.)

 

The 1st of May has other romantic traditions— kissing one’s love under a blooming cherry or birch tree is a custom that goes back centuries to pagan Slavs who held these trees sacred. Legends also stated that a girl who does not receive a kiss from her true love on the first of May was destined to wither away within the year. So, be sure to kiss your love!

 

První máj is also known as a time of love, not just because it is a time to court unmarried women and defend your village’s phallic symbol, but also because the Czech language’s most beloved Romantic poet, Karel Hynek Mácha wrote one of his most important works Máj May as a memorial to this time of year. Mácha, unfortunately, died shortly before his own wedding, adding to his romantic legend and making him a beloved figure here. Even to this day, Czechs in Prague makes a pilgrimage to the poet’s memorial on top of Petřín hill.

 

Finally, the 1st of May is also time for the Majáles— where students celebrate the coming of spring with parades, drinking, costumes, and music festivals. Students also hold elections for the King of the Majáles.

 

So, go burn some witches and kiss your true love!

Easter (or Velikonoce) is right around the corner!

The beginnings of spring means one of the Czech Republic’s biggest holidays, Easter (or Velikonoce) is right around the corner.

During the Communist era, Easter was celebrated more as a generic Spring holiday than a religious holiday. And for many Czechs today, Easter is not a Christian holiday, but a non-religious Czech holiday. Czech celebrations of Easter are also often a little different than what most expats are used to back home.

For Czechs, Easter begins on Ugly Wednesday, or the Wednesday before Easter. This is the last day in school before the Easter break for most Czech children, who won’t have to go back to school until the next week. Green Thursday (often called Holy Thursday in Catholic households) is when young boys would traditionally walk around the village shaking a special wooden rattle, a řehtačka, which would be used to frighten away Judas. This noisy tradition is repeated on Good Friday and on White Saturday (Easter Eve), the only difference being that on White Saturday, groups of boys would go house to house rattling until they were given small gifts or a token gift of money to stop, which the boys would split among themselves.

Girls were traditionally put in charge of decorating the beautiful Easter eggs found in many Czech households. These elaborately decorated eggs would be prepared on White Sunday and Easter Sunday while the boys were causing troubles with their rattles and preparing their switches for Easter Monday.

Easter Sunday, is a religious holiday, but more often than not Czechs spend Easter Sunday preparing for the real celebration— Easter Monday. Easter Monday is also a state holiday, so all public and governmental offices are closed, public transportation runs on holiday schedules, and most people have the day off to celebrate with their friends and families.

Easter traditions often have a connection to young animals which would be born around this time in the year. One such animal that Czechs associate with Easter is the lamb. Some traditional Czech households will roast a lamb for Thanksgiving, though during times of scarcity, such as the Communist era, this tradition became expensive and much more uncommon. But don’t worry vegetarians— many other Czech families now serve a symbolic lamb made of gingerbread and covered in powdered sugar as an Easter dessert.

A  stranger (to non-Czechs) tradition is that of the pomlázka, a switch made of pussywillow branches braided together. Young men would wander around the village on Easter Monday whipping young women lightly on the legs or bottom while singing traditional carols— a slightly-pagan ritual thought to encourage fertility and maintain a woman’s beauty in the coming year. In turn, the young women would reward young men with eggs and other treats. Nowadays, the whipping with a pomlázka is rewarded with chocolate or homemade brandy for older boys and young adults.

However, men that get carried away should be careful! There’s another Czech tradition—women who have been spanked by a pomlázka can (and do) throw ice cold water on men the next afternoon or even through the next day. So don’t spank too hard!

 

Enjoy the beautiful weather!

 

Your Team of PraguExpats

 

Valentine’s Day is a hot phenomenon these days in the Czech Republic.

Although historically, Czechs have not traditionally attached any special holiday significance to February 14th (besides the Feast of St. Valentine for more traditionally-Catholic Czechs), the Czech Lands have been quick to adopt this primarily-American holiday following the 1989 Revolution, especially among members of the younger generation. Older Czechs (and quite a number of young people) may still prefer to celebrate the traditional Czech day of Romance — May 1st— instead.

 

But even though Czechs are embracing Valentine’s Day, not all American traditions, such as giving Valentine’s cards, have been accepted here. Czechs are also, typically, more reserved about giving such gifts to people they are not intimately close with— to celebrate a Valentine together is a romantic milestone for many people, and not something you do with whoever is handy.

 

Here’s a few ways Czechs like to celebrate their Valentine’s Days with their romantic partners.

 

Give the Gift of Flowers

 

Czechs love to give flowers to the special men and women in their life on many special occasions such as birthdays, anniversaries, promotions, and name days. Valentine’s Day is, of course, no exception, and many Czech florists (květinářství, in Czech) do excellent business in the days around February 14th.

 

Roses, as in America, are traditionally considered the gift of romance, though other combinations of different flowers (such as carnations and other red and white flowers) are popular. If you’ve forgotten the flowers, don’t worry— many major Czech cities have 24 hour florists who are more than happy to keep you from getting in trouble. Most even have some form of delivery service to make sure the blooms get there in time.

 

Make Sure You Include Something Else

 

Although flowers are traditional, they’re also a bit ordinary. Many Czechs would prefer their partners also get them something special along with the fresh flowers— a bottle of wine, some chocolates, or something else meaningful to them.

 

A typical choice for Valentine’s Day wine is Czech sekt, a type of sparkling wine similar to Italian prosecco, but slightly sweeter. Almost any Czech wine store, grocery story, or supermarket will carry sekt, which ranges in price from affordable to decadent.

 

Other fine options are boxes of bonbons or chocolates from local sweetshops or bakeries. Some Czech women may like jewelry, but much as in America, this is not universal nor is it typical to give at the beginnings of a relationship.

 

Take a Walk

 

If you’re looking for the best ratio of cost-to-romance, nothing beats a stroll arm-in-arm with your special someone through the beautiful sites of the Czech Republic, especially after a nice diner and Czech sekt.

 

Take advantage of the Czech Republic’s historic and natural beauty by walking through one of the many historic old towns and squares. Or better yet, make use of this year’s unseasonably warm winter and go visit some the Czech Republic’s romantic nature spots.

 

 

Wish you a lot of LOVE!

 

Your Team of PraguExpats

It’s time to work on those resolutions for 2015

So the New Year has come and gone, and now it’s time to work on those resolutions for 2015.

 

Perhaps the most common new year’s resolution is to get back in shape. And while that might be difficult in the Czech Republic (with all the wonderful beer and sausages that you’ll find everywhere) there’s still lots of ways to get back to being fit. Here’s a few ideas to jump start your journey from flab to fit!

 

Go to the Gym

 

For those of you who like your physical fitness old school with a side of barbell, there’s always the tried-and-true solution of going to the gym. Big chain gyms like BBC (http://www.fitnessbbc.cz/) and Holmes Place (http://holmesplace.cz/en/) often have introductory specials and offer a range of classes from spinning to Pilates (http://www.partyfit.cz/english/). Some added benefits of these larger gyms are the facts that they’re also more English-friendly than some of the neighborhood gyms and they’re often located close to the larger office parks and metro stops. Some even offer juice bars and saunas and other relaxing amenities if you’re in the mood (and have the budget) for an post-workout treat.

 

If you’re more comfortable with your Czech, Prague also boasts a range of smaller (and often cheaper) gyms closer to home. While these gyms may not be as large, or offer as many fancy options as the larger gyms, they are often more affordable and they’re close to home.

 

Something with a more Eastern Flair

 

Yoga is a big deal here in the Czech Republic. This Indian-derived form of exercise sets aside the weights in favor of using a series of poses and movements designed to work all of your muscles. Several different types of yoga can be found in the Czech Republic, ranging from the spiritually-oriented (for those who want such an experience) to the physically intense.

 

Hot yoga and Bikram yoga are especially popular these days. These styles, which take place in a room heated to 40 C, have grown in popularity since arriving in the Czech Republic in 2006. Practitioners often find that the heated room helps their bodies loosen up more easily, which is something to be treasured during the cold Czech winters (http://www.bikramyoga.cz/en/).

 

Yoga devotees who want something less “tropical” have their share of options too. Nearly every neighborhood in Prague and Brno has a yoga studio, and the craze has even spread to many Czech towns and villages.

 

Take Up a Martial Art

 

Martial arts (as well as sports like boxing) are another great way to not only lose weight and get in shape, but also to make new friends and acquaintances. Nothing brings you and your new friends together like a round of intense sparring, after all!

 

Although many gyms are run by Czech speakers, there are plenty of places to practice martial arts in Prague that not only allow foreigners to train there, but usually welcome them. Traditional Chinese art forms like Wing Chun and Hung Gar, and Japanese martial arts like Goju-ryu karate are all taught in the larger cities like Prague and Brno.

 

If you’re more concerned with being physical than deadly, Judo, Western Boxing, and Thai boxing (all sports popular with mixed-martial artists) in particular are well represented in Prague, with clubs and training facilities in most districts in the city. Due to a strong Czech fight sport scene, these clubs tend to be a little on the competitive side, but they often have beginner’s classes for those who are just starting out.

 

Wish you a great beginning of the year 2015 and remember to have at least one beer after your exercise!

 

Your Team of PraguExpats

Little Jesus, The Devil, and a Carp or Two— Christmas in the Czech Republic

Although often called a “nation of atheists” due to their free-thinking ways, the Czechs nonetheless place a great importance on Christmas as a time to celebrate with families and friends. Gifts are given, trees are decorated, and carols are sung, just like back home. However, there are some special traditions and practices only found here in the Czech Lands.

 

Before Christmas

 

Christmas markets (Vánoční trhy ) are one of the most recognizable public manifestations of the Christmas spirit in cities big and small throughout the Czech Republic. In major cities like Prague and Brno, nearly every major (and some minor) public square has a Christmas market setup with stalls selling homemade decorations, goods, drinks, and food. While you might not want to buy everyone on your list a bottle of homemade plum brandy (slivovice ), they are great resources for picking up a few ornaments for your tree or souvenirs of your first Czech Christmas.

 

December 5th (evening) and 6th (day) marks the Feast of St. Nicholas ( Sv. Mikuláš ), where the jolly saint comes bearing gifts for good children. Accompanied by a devil and an angel, St. Nicholas is equally terrifying and joyous, as he visits the children of the Czech Republic to reward them for good behavior or scare them into being better in the coming year. Good children receive small toys and sweets, bad children are threatened by the devil who wants to them into a sack and take them to hell. Fortunately for all the naughty boys and girls of Bohemia, this punishment is not followed through on, and bad children receive coal or onions or potatoes instead of the sweets and toys given to the nicer ones.

 

In the villages, the feast of St. Nicholas is often done door to door, with groups of village adults playing St. Nicholas and his helpers. However, in larger cities, there are often public gatherings in the squares where parents can bring their children to participate.

 

Christmas Time

 

Even when the big day rolls around, Czechs often celebrate Christmas in ways that differ from most of America and the UK. Perhaps the biggest adjustment is that Czechs traditionally celebrate with their families on Christmas Eve, December 24, instead of the 25th as is done in America and the UK or January 6th, as is done in Russia and areas that are Russian Orthodox.

 

On December 24th, celebrations begin in the morning with the baking of a traditional Christmas cake, a vánočka, which resembles a French brioche and is stuffed with tasty raisins and nuts. Due in no small part to the difficulty of baking this cake, Czech families often develop their own traditions surrounding the process, ranging from jumping in the kitchen while the yeast rises, to holding thoughts of loved-ones and Christmas wishes in mind while making the dough. This cake will bake all day.

 

During the day, most Czechs refrain from eating any other serious meals, outside of the traditional sauerkraut soup. A traditional Czech saying recommends this, as the abstaining from all other foods may allow you to see the “golden piglet”, a foretelling of wealth to come in the next year.

 

Much of the rest of December 24th is spent preparing the dinner. For Americans and British expats is that instead of the traditional  dinner of Christmas goose or roast beef, Czechs prefer to eat carp. The fish is traditionally fried and served with potato salad (a dish more commonly associated with summer picnics in America). After dinner, presents appear under the tree, delivered courtesy of Little Jesus (who brings the presents, not Santa Claus), and the adults relax with drinks.

 

Finally in the evening, some Czechs go to church. More religious Czech families (especially in parts of Moravia and Silesia) will go to a traditional midnight mass on the 24th. In fact, this is not always limited to religious families— many Czechs view the midnight mass as a traditional part of their Christmas celebrations regardless of their personal religious views. Masses are open to all throughout the city and admission is free. Afterwords, families may go home, while younger Czechs may go to friends’ houses to celebrate long into the night.

 

December 25th is usually a day of recovery from all the excitement of the 24th, so don’t be afraid to celebrate on Christmas Eve, just like Czechs do.

 

 

Merry Christmas and Happy New Year!

 

 

Your Team of PraguExpats

Animal Shelter Bouchalka COLLECTION

 

pejsci_web

 

Christmas is coming closer and we would like to help the animals in the animal shelter Bouchalka to feel more loved.

Feel free to bring 19th and 20th December some food, treats, blankets, dog trays, toys etc. to the Farmer´s market in Dejvice to the coffee van of Coffeemakers.cz and make life of the animals in Bouchalka a bit easier!

Thank you for your help and support!

 

Your Team of PraguExpats

The Weather is Frightful, But Outside is Delightful

As the weather turns colder, and snow begins to fall, many expats want nothing more than to stay inside by a warm fire and a glass of mulled wine (svařák). But for those of us who love the winter, it’s a heavenly season for outdoor sports.

The winter time is the perfect time to explore one of the Czech Republic’s most scenic resources— the mountains. While the Czech mountains are not as foreboding as the Alps or North American Rocky Mountains, they are more affordable, less crowded, and often just a short train or car trip away, making them ideal for a winter weekend getaway.

Although not as mountainous as its neighbors Austria and Slovakia, the Czech Republic has a surprising amount of excellent, moderately elevated mountains for skiing and snowshoeing. Perhaps the most well-known mountain areas are the Krkonoše mountains. The Krkonoše have some of the highest peaks in the Czech Republic and boast some of the best-maintained and most up-to-date ski resorts, such as  Špindlerův Mlýn. Špindlerův Mlýn is, perhaps, the most popular ski resort in the Czech Republic and has a wider variety of hotels and accommodation than most others in the country.

Another popular destination in the Krkonoše is Jánské Lázně, which boasts nearly 14km of trails and new investments in trail maintenance to ensure excellent snow all winter long as well as night skiing. The relatively low cost of skiing in Jánské Lázně has made it a popular destination for European tourists and winter sports fanatics, but early and late season skiing remains relatively uncrowded, especially in comparison to French and Italian ski resorts.

To the west of Prague, the second most famous Czech mountain range is the Bohemian Forest (in Czech: Šumava). These mountains feature gentler slopes than the Krkonoše, so they are often more kind to beginners. However their cross-country skiing and snowshoeing trails are also excellent.

Although smaller than most of the other mountain ranges, the Beskyd mountains near the Czech republic’s south-eastern border with Poland and Slovakia are an excellent location for cross-country skiing and snowshoeing enthusiasts. Although Beskyds are a popular hiking destination in the summer, the scenery there is more than beautiful enough for winter treks. Of particular interest to winter enthusiasts are the trails around Radhošť, the highest peak in the Beskyds and historically a pilgrimage site for Slavs since the Middle Ages.

And if Czech mountains aren’t high enough, you can always hop a short train ride to Slovakia, home of the majestic Tatra and Western Carpathian Mountains. The Slovak ranges are steeper and at a higher altitude than the Czech mountains (as well as covering a bigger portion of the country), so snowfall is rarely a problem. However, some of the resorts tend to get crowded with tourists from around Central Europe who wish to experience Slovakia’s natural winter splendor personally.

Notable Slovak skiing and snowshoeing areas include Štrbské Pleso and Tatranská Lomnica in the High Tatras. The Low Tatras also have their share of good skiing such as Slovakia’s largest skiing resort, Jasná, which has been the go-to place for excellent snowboarding and downhill skiing for the last few years.

 

Enjoy the winter time in the Czech republic!

 

Your Team of PraguExpats

Top 5 Things You Need to Know About US Expat Taxes

Are you one of the millions of Americans living overseas who were unaware that you were required to file US tax returns each year? If so, this article is for you! The US is one of the few countries who employ citizen-based taxation—which means that no matter where you live, you are still required to report your income to Uncle Sam. To help you better understand your US expat tax obligations, we have outlined the top 5 things you need to know!

  1. The Foreign Earned Income Exclusion can be a huge money-saver

Many expats fear that they will face the dreaded ‘dual-taxation’, which occurs when you are forced to pay taxes on your income to the US and your host country. Thankfully the US understands this predicament and has created some important exclusions, such as the Foreign Earned Income Exclusion to help minimize it. You can exclude your first $99,200 of foreign income (in 2014) with this important exclusion, potentially eliminating your entire income from US taxation! But there’s one catch. (Isn’t there always?) You must qualify as an official US expat in order to use it.

You qualify as an expat by passing one of two residency tests. With the Physical Presence test, you must be inside a foreign country for 330 days of any 365-day period. This isn’t necessarily a calendar year, so there is some flexibility in how you calculate it (including getting prorated deductions if your time abroad spans two tax years). Most expats who don’t relocate overseas permanently will use this test. The other option is the Bona Fide Residence test, which requires that you live abroad for at least one year and have no intentions of returning to the US permanently.

 

  1. Other Ways to Save

There are two other deductions you may be able to use in order to offset your US tax liability. The Foreign Tax Credit is a dollar-for-dollar credit on every tax dollar you pay to a foreign country. For example, if you paid $4,500 to the Czech Republic and owe $7,500 to the US, you will end up owing $3,000 after utilizing this credit. Note that you cannot use the Foreign Tax Credit against income that has already been excluded via the Foreign Earned Income Exclusion.

The Foreign Housing Exclusion allows you to exclude certain housing expenses (up to a maximum limit) to offset the often higher cost of living overseas. The types of expenses you can exclude include:

  • Rent
  • Utilities
  • Real & Personal Property Insurance
  • Rental of Furniture and Accessories
  • Parking
  • Household Repairs

 

The IRS sets higher exclusion limits for those who live in cities with a higher cost of living. This list is updated each year so you should visit www.irs.gov for the latest information.

 

  1. You May Need to File FBAR

FBAR, Foreign Bank Account Report, is part of the US initiative to prevent US citizens from hiding money in offshore accounts. You are required to file Form FinCEN 114 electronically to the US Department of the Treasury if you have $10,000 or more in foreign bank accounts at any point during the tax year. This is an aggregate amount—meaning if you have $4,000 in one account and $6,500 in another, you are required to report both accounts. Note that this is filed separately from your US Federal Tax Return, which goes to the IRS.

Penalties for failing to file FBAR if required can be quite steep. You certainly don’t want the IRS to track you down, so make sure you file FBAR by June 30th each year if your accounts meet the requirement, as no extensions are granted.

 

  1. FATCA

If you haven’t heard about FATCA, Foreign Account Tax Compliance Act, it’s time to get acquainted! FATCA is another piece of the US crackdown on tax cheats storing assets in offshore accounts. FATCA requires individuals to file Form 8938 with their Federal Tax Return if their offshore assets exceed certain thresholds (which vary by filing and residency status). As of July 2014, FATCA also requires foreign financial institutions to report on the accounts of their American clients.

This is the piece that is causing an international uproar. This system of ‘checks and balances’ so to speak ensures no one can slip through the cracks. But what is happening is that many foreign banks are simply refusing to work with Americans to avoid the hassle and burden of FATCA reporting, causing serious banking issues for innocent American expats. Like FBAR, penalties for failing to report your assets when required can be huge and can even result in criminal prosecution (however, that is very unlikely).

Form 8938 is filed along with your US Federal Tax Return and if you file for an extension on that it applies to Form 8938 as well.

 

  1. Getting caught up

You may be wondering what on earth you should do if you haven’t been filing US tax returns. The solution is actually quite simple! The IRS created the Streamlined Filing Procedures specifically to help US citizens get caught up on their US taxes.

With this program, you file the last three years of tax returns and last six years of FBARs and you are considered caught up. The IRS has currently waived all late filing and FBAR penalties, so you truly won’t be penalized for coming forward to become compliant. If you owe back taxes, you will, of course, be responsible for those (as well as any interest owed) but that is the extent of the financial outlay. The program has no official closing date but the IRS has warned that it could end the program at any time.

 

If you have questions about what you need to file on your US expat tax return, you are encouraged to speak with an expat tax professional who can help you fully understand your personal tax situation.

This article was written by David McKeegan, co-founder of Greenback Expat Tax Services, which provides expert expat tax preparation for Americans living overseas. If you have questions about FBAR, FATCA or other expat tax concerns, please Greenback Expat Tax Service.

 

Your Team of PraguExpats