international tax lawyers

2026 Form 8938 Threshold | US International Tax Lawyers

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US taxpayers must file Form 8938 with their US tax returns if they hold foreign financial assets with an aggregate value exceeding a relevant balance threshold. This article discusses the 2026 Form 8938 threshold limits.

2026 Form 8938 Threshold: Form 8938 Background

Form 8938 burst into the US international compliance scene in 2011 as a result of the famous Foreign Accounts Tax Compliance Act (FATCA). FATCA was enacted as part of the Hiring Incentives to Restore Employment Act of 2010 (“HIRE Act” or “Act”) which was signed into law by President Obama in 2020.

FATCA revolutionized international tax compliance of the world by forcing foreign banks to report their US-held accounts to the IRS. In essence, it created the third-party verification of foreign accounts that FBAR has always lacked. This third-party verification was supported on the other side by creation of a new requirement to report foreign assets by US taxpayers as part of their US tax returns – Form 8938.

Form 8938’s scope of disclosure is very broad. It generally includes two types of “specified foreign financial assets”: (a) any financial account (also defined very broadly) maintained by a foreign financial institution (again defined broadly); and (b) other specified foreign financial assets not held in an account maintained by a foreign institution.  Other Specified Foreign Financial Assets is a term with a reach far and beyond any other US international tax form, making Form 8938 a unique “catch-all” international tax reporting requirement.

2026 Form 8938 Threshold: Form 8938 is a Dangerous Form

The huge scope of Form 8938 presents a grave danger to US taxpayers, because US Congress armed the form with a wide range of penalties, including a $10,000 failure-to-file fee.  For these reasons, it is highly important to understand when a particular situation triggers the Form 8938 filing requirement. One of the most important filing criteria is the subject of this article — the 2026 Form 8938 filing threshold limits.

2026 Form 8938 Threshold: Filing Threshold Factors

When considering the Form 8938 threshold requirements, there are two most important factors that influence which filing threshold will apply in a particular situation. First, the filing status of the taxpayer(s): married filing jointly, married filing separately, single, et cetera.

The second factor is whether the taxpayer lives in the United States or lives abroad. 

2026 Form 8938 Threshold: Legal Test for Living Abroad

The IRS will agree that a taxpayer lives abroad if he meets one of the two “presence abroad” tests.

The first presence abroad test is satisfied if the taxpayer is a US citizen who has been a bona fide resident of a foreign country or countries for an uninterrupted period of an entire tax year.

The second presence abroad test is satisfied if the taxpayer is a US citizen or resident who is present in a foreign country or countries at least 330 full days during any period of twelve consecutive months in the relevant tax year.

Of course, these tests are almost exact replicas of the test for Foreign Earned Income Exclusion.

2026 Form 8938 Threshold: Taxpayers Living in the United States

Let’s first discuss the Form 8938 filing thresholds for taxpayers who live in the United States category by category:

Unmarried Taxpayers Living in the United States: the taxpayer is required to file Form 8938  if the total value of his specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during that tax year.

Married Taxpayers Filing a Joint Income Tax Return and Living in the United States: if the taxpayer is married and files joint income tax return with his spouse, Form 8938 must be filed if the spouses’ specified foreign financial assets are either more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the tax year.

Married Taxpayers Filing Separate Income Tax Returns and Living in the United States: if the taxpayer is married and lives in the United States, but files a separate income tax return from his spouse, then the reporting threshold is satisfied if the total value of his specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. Therefore, this category is very similar to that of the unmarried taxpayer who resides in the United States.

2026 Form 8938 Threshold: Taxpayers Living Abroad

Here are the Form 8938 filing thresholds for taxpayers who live abroad:

Married Taxpayers Filing a Joint Income Tax Return and Living Abroad: if the taxpayer lives abroad (as described above) and files a joint tax return with his spouse, then the reporting threshold is satisfied if the value of all specified foreign financial assets that the spouses own is either more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.

Taxpayers Filing Any Return Other Than Joint Tax Return and Living Abroad: if that taxpayer lives abroad and does not file a joint income tax return (instead he files a different type of tax return such as married filing separately, head of household or unmarried), then the reporting threshold is satisfied if the value of all specified foreign financial assets is either more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the tax year.

2026 Form 8938 Threshold: Specified Domestic Entity

Specified Domestic Entities are also required to file Form 8938. The filing threshold for a specified domestic entity is satisfied if the total value of such an entity’s specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.

Contact Sherayzen Law Office For Help With IRS Form 8938

The reporting requirements under Form 8938 can be very complex. Moreover, Form 8938 noncompliance often occurs in conjunction with noncompliance with FBAR and other reporting requirements (such as Forms 5471, 8621, 8865 et cetera).  In such cases, filing of a late Form 8938 is often should be done through an IRS offshore voluntary disclosure option in order to reduce additional IRS tax penalties.

Sherayzen Law Office is an international tax law firm that specializes in US international tax compliance, including Form 8938. We are highly experienced with Form 8938 issues, including offshore voluntary disclosures involving Form 8938.  We can help you!

Contact us today to schedule your confidential consultation!

2026 Foreign Earned Income Exclusion | International Tax Lawyer & Attorney

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The Foreign Earned Income Exclusion (“FEIE”) is a valuable tax strategy available to US tax residents who live and work abroad. It allows US citizens to exclude a certain amount of foreign earned income from their US taxable income. The IRS adjusts the precise amount every year.  In this article, I will discuss the 2026 Foreign Earned Income Exclusion.

2026 Foreign Earned Income Exclusion: Background Information

FEIE was born out of the fact that the US tax system is unique and taxes its citizens and even more broadly its residents on their worldwide income irrespective of where they reside. In many countries, such taxpayers are subject to local foreign income taxes on the same income. In order to alleviate the potential burden of double taxation, the US Congress enacted Section 911 of the Internal Revenue Code. This section codified FEIE.

Section 911 allows qualifying individuals to exclude a specified amount of foreign earned income from US taxable income. The IRS adjusts this amount every single year.  A taxpayer must use Form 2555 to claim FEIE.

2026 Foreign Earned Income Exclusion: Eligibility

In order to claim FEIE, a taxpayer must meet certain requirements set forth in IRC §911. I will provide only a brief outline of these requirements in this article. They are discussed in more detail in other articles on our website.

First of all, FEIE applies only to foreign earned income, not passive income and not US-source income.

Second, the taxpayer must maintain his tax home in a foreign country. “Tax Home” is a term of art that has its specific meaning.

Third, you must pass either the physical presence test or the bona fide residence test.

2026 Foreign Earned Income Exclusion: Additional Considerations

While FEIE brings a huge benefit of income exclusion, it often is not the best option for US taxpayers who reside overseas. Let’s focus on the four most important considerations.

First, FEIE limits and in some cases completely eliminates the ability to take Foreign Tax Credit (“FTC”). If you use FEIE, you cannot use the FTC to reduce US taxes on income already excluded under the FEIE.  The problem arises when FTC is actually higher than the US tax.  In this case, you may be losing a very important tax strategy to reduce your US taxes not only in the current year, but also in the future.

Second, FEIE may result in ineligibility to take other tax credits normally available to a taxpayer.

Third, despite the income tax exclusion, your tax bracket will still be the same as if you were taxed on the whole amount (i.e. as if you had not claimed the foreign earned income exclusion).

Finally, while not a tax consideration, usage of FEIE by US permanent residents may result in the abandonment of their green card. In other words, FEIE may present a huge risk to the immigration goals of a taxpayer.

2026 Foreign Earned Income Exclusion: Adjustment for 2026

On October 9, 2025, the IRS announced that the foreign earned income exclusion amount under §911(b)(2)(D)(i) is going to be $132,900 for the tax year 2026. This is up from $130,000 in the tax year 2025.

Contact Sherayzen Law Office for Professional Help with Foreign Earned Income Exclusion

The Foreign Earned Income Exclusion is a vital tax tool for US taxpayers working abroad, but it must be used cautiously and after careful consideration of all circumstances.  Hence, if you are a US taxpayer who lives abroad or you are planning to accept a job overseas, you need to secure the help of Sherayzen Law Office, a premier firm in US international tax compliance. We can help you navigate the complexities of FEIE, determine your eligibility for it and build a tax strategy to help you maximize the advantages offered by the Internal Revenue Code. Contact Us Today to Schedule Your Confidential Consultation!

Fourth Quarter 2025 IRS Interest Rates on Overpayment & Underpayment of Tax

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On August 25, 2025, the IRS announced that the Fourth Quarter 2025 IRS interest rates on overpayment and underpayment of tax will remain the same as in the Fourth Quarter of 2025.

This means that, the Fourth Quarter 2025 IRS interest rates will be as follows:

seven (7) percent for overpayments (seven (7) percent in the case of a corporation);

seven (7) percent for underpayments;

nine (9) percent for large corporate underpayments; and

five (5) percent for the portion of corporate overpayment exceeding $10,000.

How the IRS Calculated Fourth Quarter 2025 IRS Interest Rates

The IRS calculates the IRS interest rates based on specific tax provisions. We begin with the Internal Revenue Code (“IRC”) §6621, which establishes the IRS interest rates on overpayments and underpayments of tax. Under §6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points for individuals and 2 percentage points in cases of a corporation. There is an exception to this rule: with respect to a corporate overpayment of tax exceeding $10,000 for a taxable period of time, the rate is the sum of the federal short-term rate plus one-half of a percentage point.

Additionally, under §6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points. Similarly to overpayments, there is an exception for a large corporate underpayment: in such cases, §6621(c) requires the underpayment rate to be the sum of the relevant federal short-term rate plus 5 percentage points. Also, the readers should see §6621(c) and §301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date.

Finally, pursuant to the IRC §6621(b)(1), the IRS computed the Fourth Quarter 2025 IRS interest rates based on federal short-term rates in July of 2025.

Importance of the Fourth Quarter 2025 IRS Interest Rates

The IRS interest rates are relevant for a great variety of purposes. Let’s highlight three of its most important uses. Firstly, these rates will determine the interest a taxpayer will get on any IRS refunds.

Second, the IRS and the taxpayers use these rates to calculate the interest on any additional US tax liability on amended or audited tax returns. This also applies to the amended (and, in case of SFOP, original) tax returns that the taxpayers submit pursuant to Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures.

Finally, the Fourth Quarter 2025 IRS interest rates will be used to calculate PFIC interest on any relevant §1291 PFIC tax. This PFIC interest will be reported on the relevant Form 8621 and ultimately Form 1040.

We at Sherayzen Law Office constantly deal with the IRS interest rates on overpayments and underpayments of tax. This is why we closely follow any changes in these IRS interest rates, including the Fourth Quarter 2025 IRS interest rates.

Sherayzen Law Office Successfully Completes Its 2025 Spring Tax Season

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On April 15, 2025, Sherayzen Law Office, Ltd., successfully completed its 2025 Spring Tax Season. It was a challenging and interesting tax season. Let’s discuss it in more detail.

2025 Spring Tax Season: Sherayzen Law Office’s Annual Compliance Clients

Annual tax compliance is one of the major services offered by Sherayzen Law Office to its clients. The majority of our annual compliance clients are individuals and businesses who earlier retained our firm to help them with their offshore voluntary disclosures. They liked the quality of our services so much that they preferred our firm above all others to ensure that they stay in full compliance with US tax laws.

It is natural that this group of clients is the largest among all other groups, because the unique specialty of our firm is conducting offshore voluntary disclosures.

A smaller group of our annual compliance clients consists of tax planning clients who also asked Sherayzen Law Office to do their annual compliance for them. While the group is smaller, it is usually the one always has a complex set of US tax compliance requirements due to the size of each client.

Finally, the last group of our annual compliance clients consists of businesses and individuals who were referred to our firm specifically for help with their annual compliance. These are usually foreign businesses who just expanded to the United States and foreign executives and professionals who just arrived to the United States to start working here. An important part of this group also includes foreign students.

2025 Spring Tax Season: Sherayzen Law Office’s Annual Compliance Services

Virtually all of our clients have exposure to foreign assets and international transactions. Hence, in addition to their domestic US tax compliance, Sherayzen Law Office prepares the full array of US international tax compliance forms related to foreign accounts (FBAR and Form 8938), PFIC calculations (Forms 8621), foreign business ownership and Section 367 notices (Forms 926, 5471, 8858, 8865, et cetera), foreign trusts (Form 3520 and Form 3520-A), foreign gifts/foreign inheritance (Form 3520), foreign ownership of US businesses (Form 5472) and other relevant US international tax compliance issues.

2025 Spring Tax Season: Unique Challenges and Opportunities

The 2025 Spring Tax Season was especially challenging because of the record number of deadlines that Sherayzen Law Office had to complete. During the season, Sherayzen Law Office filed a large number of FBARs, US income tax returns and US international tax returns such as Forms 3520, 5471, 8865, 8621 and 926.  Despite a very large number of deadlines that we timely finished prior to April 15, due to the international nature of our cases, Sherayzen Law Office extended ever more deadlines.

This year we also implemented on a grander scale new spreadsheets for clients, including the 3.2 version of Account Summary and 3.1 version of Summary of Entities. We also replaced the older versions of the Schedule C and Schedule E spreadsheets with the new 2025 versions. We hope to complete the process of firm-wide usage of updated spreadsheets by the end of the fall tax season.

Looking Forward to Completing Offshore Voluntary Disclosures, Additional Tax Planning and 2025 Fall Tax Season

Having completed such a challenging 2025 Spring Tax Season, Sherayzen Law Office now looks forward to completing our outstanding offshore voluntary disclosures and IRS audits.  During the Spring of 2025, we also expanded our portfolio of international tax planning clients. Finally, we will be working on completing the extensions prior to the October 15th, 2025 deadline.

Contact Sherayzen Law Office for Professional Help with US International Tax Law, including Offshore Voluntary Disclosures

If you have foreign assets or foreign income, contact Sherayzen Law Office for professional help. Our firm specializes in US international tax compliance. We have helped hundreds of US taxpayers to bring themselves into full compliance with US tax laws, and We Can Help You! Contact Us Today to Schedule Your Confidential Consultation!

West Virginia IRS Tax Relief: November 3 2025 Deadline | Tax Lawyer News

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On March 14, 2025, the Internal Revenue Service announced a tax relief for individuals and businesses in parts of West Virginia affected by severe storms, straight-line winds, flooding, landslides and mudslides that began on February 15, 2025. On March 20, 2025, the tax relief expanded to four more counties. Let’s discuss this West Virginia IRS tax relief in more detail.

West Virginia IRS Tax Relief: Who is Affected

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, individuals and households that reside or have a business in Greenbrier, Lincoln, Logan, McDowell, Mercer, Mingo, Monroe, Summers, Wayne and Wyoming counties qualify for tax relief.

The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.

West Virginia IRS Tax Relief: New Tax Deadline for Affected Counties

All taxpayers who reside in the aforementioned countries (as updated later by the IRS) will now have until November 3, 2025, to file various federal individual and business tax returns and make tax payments.

West Virginia IRS Tax Relief: What Tax Deadlines are Postponed by the IRS

The tax relief postpones various tax filing and payment deadlines that occurred from February 15, 2025, through November 3, 2025 (“postponement period”). As a result, affected individuals and businesses will have until November 3, 2025, to file returns and pay any taxes that were originally due during this period.

Here is a non-exclusive list:

  • Individual income tax returns and payments normally due on April 15, 2025.
  • 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
  • Quarterly estimated tax payments normally due on April 15, June 16 and September 15, 2025.
  • Quarterly payroll and excise tax returns normally due on April 30, July 31 and October 31, 2025.
  • Calendar-year partnership and S corporation returns normally due on March 17, 2025.
  • Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
  • Calendar-year tax-exempt organization returns normally due on May 15, 2025.

West Virginia IRS Tax Relief: Additional Penalty Abatement

In addition, penalties for failing to make payroll and excise tax deposits due on or after February 15, 2025, and before March 3, 2025, will be abated as long as the deposits were made by March 3, 2025.

The Disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

West Virginia IRS Tax Relief: Tax Relief is Automatic

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the IRS Special Services toll-free number at 866-562-5227 to update their address and request disaster tax relief.

Moreover, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. In such cases, taxpayers qualifying for relief who live outside the disaster area need to contact the IRS Special Services toll-free number at 866-562-5227. Of course, this also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. Disaster area tax preparers with clients located outside the disaster area can choose to use the bulk requests from practitioners for disaster relief option, described on IRS.gov.

West Virginia IRS Tax Relief: Additional Tax Relief

So, when should the taxpayers claim their losses disaster? Actually, there is a choice. Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2025 return normally filed next year), or the return for the prior year (2024). Also, taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means October 15, 2026. Be sure to write the FEMA declaration number – 4861-DR − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

West Virginia IRS Tax Relief: Taxation of Qualified Disaster Relief Payments

The IRS generally allows to exclude qualified disaster relief payments from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents.

West Virginia IRS Tax Relief: Impact on Offshore Voluntary Disclosures

Sherayzen Law Office tracks carefully the IRS announcements of tax relief because they may affect the schedule of an offshore voluntary disclosure.  There are many reasons for it. For example, some taxpayers simply may not have the ability to tackle the document collection tasks for a while, others may benefit from the tax deadline postponement which would allow the voluntary disclosure to proceed before making any current-year tax compliance filings.