What Do You Know About FATCA?
Well, the IRS is up to their tricks again, making life a little more difficult on our expat citizens. The Foreign Account Tax Compliance Act is designed to improve tax compliance regarding offshore bank accounts. An interesting statistic…of the 7.2 billion expats, the US Department of Treasury has only received 885,000 FBARS!
The US Department of Treasury is expecting compliance from over 50 banking institutions which means that they will be reporting account information and income to all US citizens who fall under the FATCA rules starting January 2014.
In addition to the Foreign Bank Account Report, in 2011 the IRS added the form 8938 to their list of required forms for US citizens living offshore who have more than $200,000 ($400,000 joint) of foreign financial assets. The Form 8938 must be attached to your Federal Income Tax return.
On a side note, all FBARS (starting July 1, 2013) need to be filed electronically using the “bsa-efiling system”. The site is available to taxpayers and tax professionals since both fall under the efiling requirement, and is not particularly user-friendly. Surprise!