American Taxpayer Relief Act of 2012: Tax Implications for U.S. Taxpayers Living AbroadJanuary 2013
Although the American Taxpayer Relief Act of 2012 ("Fiscal Cliff Legislation") passed last week does not contain any sweeping changes targeted at U.S. taxpayers living abroad, a number of provisions are relevant to such U.S. taxpayers - in particular, the sections dealing with income tax rates, itemized deductions (including the deduction permitted for foreign taxes not claimed as a credit against U.S. tax), personal exemptions, limits on itemized deductions, the alternative minimum tax and payroll taxes. Below is a brief summary of some of the more pertinent sections. We note that additional tax legislation is likely forthcoming in 2013, which may have retroactive effect, and that we also expect the Treasury Department to issue final regulations pursuant to the Foreign Account Tax Compliance Act (FATCA) in the coming months.
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