Question 1

Do I need to file an FBAR?

Accepted Answer

If you are a U.S. person and the combined highest balance of all your foreign financial accounts went over $10,000 at any point in the year, you file. It is the combined total that matters, not the balance of any single account, and it counts accounts you only have signature authority over. The FBAR is filed with FinCEN, separately from your tax return, and filing it does not by itself create any tax.

Question 2

What is the difference between the FBAR and Form 8938?

Accepted Answer

They are two separate reports with different thresholds, different agencies and different definitions of what counts. The FBAR goes to FinCEN; Form 8938 is attached to your tax return and goes to the IRS. Many people have to file both for the same accounts, and filing one does not satisfy the other.

Question 3

I was in the U.S. for more than 183 days. Am I now a U.S. tax resident?

Accepted Answer

Possibly, but the test is not simply counting this year's days. The substantial presence test weights the current year fully, the previous year at one third and the year before that at one sixth. Certain visa categories are exempt from counting days at all, and a treaty or the closer-connection exception can change the answer even when the count is met.

Question 4

If I become a U.S. tax resident, what income do I have to report?

Accepted Answer

Worldwide income — not only what you earned in the United States. That includes foreign salary, foreign rental income, foreign interest and dividends, and gains on assets held abroad. Foreign tax credits or a treaty may reduce the U.S. tax, but the income still has to be reported.

Question 5

I own shares in a company overseas. Do I have to file Form 5471?

Accepted Answer

Very likely, if your ownership reaches the thresholds the form sets. The form reports the company, and its figures can also feed a U.S. tax calculation on the owner: Subpart F income has worked that way since 1962, and since 2018 GILTI (renamed net CFC tested income, NCTI, from tax year 2026) reaches much more of a foreign company's ordinary profit. It is not something to attach and forget.

Question 6

What is GILTI (now NCTI), in plain terms?

Accepted Answer

It is a rule that can tax you in the United States on profits your foreign company has earned but has not paid out to you. Before it existed, profits left inside an overseas company were generally not taxed in the U.S. until distributed. GILTI changed that for many owners of foreign corporations from 2018. For tax years beginning in 2026 the rule is called net CFC tested income (NCTI) and works somewhat differently — among other changes, the exclusion for a return on the company's tangible assets is gone (26 U.S.C. §951A as amended by Pub. L. 119-21).

Question 7

Can I apply for an ITIN if I cannot travel to the United States?

Accepted Answer

Yes. The difficulty is not the Form W-7 itself but proving your identity and foreign status, which normally means the passport. Because the IRS will not accept an ordinary photocopy, the passport is handled either through a certified copy from the issuing authority or through an IRS-authorised Certifying Acceptance Agent, so the original never has to be posted abroad.

Question 8

Is an ITIN the same as a Social Security number?

Accepted Answer

No. An ITIN exists only so that someone who is not eligible for a Social Security number can meet a U.S. tax filing obligation. It does not grant work authorisation, it is not an immigration status, and it does not make you eligible for Social Security benefits.

Question 9

I am giving up my green card. Is there an exit tax?

Accepted Answer

There can be. If you held the green card in at least 8 of the 15 tax years ending with the year you give it up (a “long-term resident”), you must file Form 8854 whether or not any tax is due. Green-card residence ends when the card is formally surrendered with Form I-407 (or by a treaty tie-breaker election), not by handing it back informally, and skipping Form 8854 makes you a covered expatriate by default and can cost a $10,000 penalty. Whether the exit tax itself applies then turns on your net worth, your recent tax history and whether you certify five years of compliance.

Question 10

I have had foreign accounts for years and never reported them. What now?

Accepted Answer

This is a common situation and there are established procedures for it, which generally treat a genuine oversight very differently from deliberate concealment. What matters most is that the correction is started before the IRS contacts you, because the routes available narrow considerably afterwards. Bring what you have and we will work out which route fits.

Question 11

I sold a property overseas. Does the U.S. tax the gain?

Accepted Answer

If you are a U.S. person, the gain is generally reportable in the United States even though the property and the sale were entirely abroad. Tax paid in the other country may be creditable, and the exchange rate on the purchase date as well as the sale date matters to the calculation.

Question 12

I rent out a property overseas. What does the U.S. need from me?

Accepted Answer

If you are a U.S. person, the rent is reportable in the United States each year on Schedule E, less the expenses of the property, including the local property tax. A foreign rental is depreciated over a longer period than a U.S. one, income tax paid on the rent abroad may be creditable, and every figure is converted to dollars. The bank account the rent is paid into may also need an FBAR.

Question 13

My parents overseas sent me money. Is that taxable?

Accepted Answer

A genuine gift from a foreign person is generally not income to you. There can still be a reporting obligation once the amount from a foreign individual passes the threshold, and that report is informational rather than a tax. The distinction that matters is whether it is truly a gift or actually payment for something.

Question 14

What is a Trump Account?

Accepted Answer

A new tax-advantaged investment account for children, opened through the IRS using Form 4547. It is aimed at long-term investment for a child rather than at education costs specifically, and regular contributions have been allowed since 4 July 2026.

Question 15

Which children qualify for the $1,000 federal contribution?

Accepted Answer

The one-time $1,000 pilot contribution is limited to U.S. citizen children born between 1 January 2025 and 31 December 2028 who have a valid Social Security number and for whom the proper election is made. An older child may still be able to have an account, but without that pilot contribution.

Question 16

How much can be put into a Trump Account each year?

Accepted Answer

$5,000 per child per year in total — across family, friends, the child and any employer contribution. It is a cap on the account, not $5,000 from each donor. The federal $1,000 pilot contribution does not count against it.

Question 17

Can I open a Trump Account at Fidelity, Schwab or Vanguard?

Accepted Answer

Not as the initial account. The account is opened through the official Treasury and IRS process; at launch BNY acted as Treasury's financial agent and Robinhood as the brokerage and initial trustee. Some firms said they expected to accept transfers once Treasury issued further guidance — as of September 2026, check trumpaccounts.gov for whether transfers are open yet.

Question 18

When can the child take the money out?

Accepted Answer

Generally not before the year the child turns 18, apart from a few narrow exceptions. From that year the account is broadly subject to traditional IRA distribution rules, which can mean ordinary income tax and possibly an early-distribution penalty unless an exception applies.

Question 19

Should this replace our 529 plan?

Accepted Answer

Not automatically. A Trump Account is best thought of as a long-term investment account for the child, while a 529 is built specifically for education costs and has its own tax treatment for them. For most families it is a supplement to a 529, a custodial account or a Roth IRA rather than a replacement — which is worth going through together.

Question 20

I have a side business. What do I need to file and pay?

Accepted Answer

Run as a sole proprietorship or single-member LLC, the profit goes on Schedule C with your personal return, and once net self-employment earnings reach $400 you also owe self-employment tax on Schedule SE. The same profit is taxed on your California return, where estimated payments start once you expect to owe $500, and most cities, Alhambra included, expect a business license. If it is an LLC, California also requires Form 568 and the $800 annual tax each year, even with no profit. Nothing is withheld from that income, so if you expect to owe $1,000 or more for the year you generally pay estimated tax each quarter. Keep the 1099-NEC and 1099-K forms, receipts and mileage records that support the figures.

Question 21

My spouse earns very little, so why is our estimated payment so high?

Accepted Answer

Because a joint return stacks both incomes together, so the second income is taxed on top of the first rather than starting again at the lowest rate. And when the second income is self-employment, nothing is withheld from it at all, and it also carries self-employment tax (both halves of Social Security and Medicare), separate from income tax. Estimated payments are how that tax gets paid during the year.

Question 22

I did a 1031 exchange. What does my CPA need from me?

Accepted Answer

The closing statements for both the property sold and the property bought, the qualified intermediary's documents, the dates that fix the 45-day and 180-day windows, and details of any loan paid off or taken on. If you received any cash or debt relief in the deal, that part is generally taxable even though the exchange itself defers the rest.

Question 23

I found a mistake on a return I already filed. Can it be fixed?

Accepted Answer

Yes, through an amended return. There is a time limit for claiming a refund, so an error in your favor is worth acting on rather than leaving. An error the other way is generally better corrected voluntarily than found later.

Question 24

I received a letter from the IRS. What should I do?

Accepted Answer

Do not ignore it, and do not pay it simply because it arrived — notices are sometimes wrong. Every notice carries a deadline, and those deadlines are shorter than people expect. Contact Kit as soon as it arrives, and ask how to send her a copy of every page. As an Enrolled Agent, Kit can deal with the IRS on your behalf.

Question 25

How long should I keep my tax records?

Accepted Answer

Longer than most people do. The ordinary assessment window is three years, but it extends where income was substantially understated, and there is no limit at all where no return was filed. Records supporting the cost of a property should be kept for as long as you own it and for several years after you sell.

Question 26

Should my business be an LLC or an S-corp?

Accepted Answer

They are not alternatives in the way the question suggests — an LLC is a legal entity and the S-corp is a tax election an entity can make. The election can reduce self-employment tax once profits are consistently high enough to justify running payroll, and below that point it usually adds cost without benefit. The number that decides it is your actual profit, not your revenue.

Question 27

I am an S-corp owner. Do I have to pay myself a salary?

Accepted Answer

If you work in the business, yes — the IRS expects reasonable compensation through payroll before profit is taken as a distribution. Taking everything as distributions is one of the more commonly examined positions, and the fix afterwards costs more than doing it correctly from the start.

Question 28

Can I pay my workers on a 1099 instead of putting them on payroll?

Accepted Answer

Only if they genuinely are independent contractors, and California applies a strict test to that question. Classification is decided by how the work is actually controlled and whether it sits outside your usual course of business, not by what the agreement is called. Getting it wrong brings back taxes and penalties.

Question 29

What can my business actually deduct?

Accepted Answer

Expenses that are ordinary and necessary for the business. The practical difficulty is rarely the rule itself but the record: a deduction you cannot document is a deduction you may lose on examination. Meals, vehicle use and anything with a personal element need the strongest records.

Question 30

I live outside the U.S. and own a U.S. LLC. What do I have to file?

Accepted Answer

More than most people expect. A foreign-owned single-member LLC that many assume has no filing requirement generally still has to file Form 5472, attached to a pro forma Form 1120, and the penalty for missing it is substantial and applies even where no tax is owed. This is worth checking early rather than at the deadline.

Question 31

Can we do all of this in Chinese?

Accepted Answer

Yes, in Mandarin or Cantonese — meetings, documents and correspondence. Tax terminology is exactly where a rough translation causes real problems, so being able to discuss it properly in your own language matters more here than in most professional work.

Question 32

What does it mean that you are an Enrolled Agent as well as a CPA?

Accepted Answer

An Enrolled Agent is a federal credential granted by the IRS that carries unlimited rights to represent taxpayers before it. A CPA also carries those rights; the Enrolled Agent credential adds that the IRS has tested Kit specifically on federal tax. Either way, Kit can deal with the IRS directly on your behalf — on notices, examinations and appeals — rather than only preparing the return.

Question 33

I do not live in California. Can you still act for me?

Accepted Answer

Yes. Federal work is not limited by state, and this office works with clients who live outside California or outside the United States. Meetings happen in the office or by Zoom, Teams, Google Meet, WeChat or WhatsApp. You can send documents by email, WeChat or WhatsApp, or bring them to our office. For very sensitive papers, bringing them in person is safest.

Question 34

What does it cost?

Accepted Answer

It depends on what the work actually involves. We tell you the fee before any work starts, after a first meeting. A tax consultation, for advice on a tax question, is a separate paid service, and we tell you its fee when you book. The Fees page explains what moves the price.

Question 35

Is the first meeting free?

Accepted Answer

A first meeting to start a service, such as a tax return, business formation, bookkeeping or payroll, is free. A tax consultation, where Kit gives advice on a tax question about your own situation, is a separate, paid service; we tell you the fee when you book. On the contact form, choose “Start a service (free meeting)” or “Tax question (paid consultation)”.

Questions and answers

Foreign accounts, income and residency

Trump Accounts

Individual returns

Business and payroll

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