Foreign Accounts Tax Compliance Act (FATCA)
In 2009, Swiss banks reported earnings to all American Citizens with offshore accounts. As a result, UBS paid $780 million to the Internal Revenue Service. Since then, more international banks have provided income information about American Citizens and Green Card Holders with foreign accounts to the IRS than ever before. If you have numerous years of unfiled U.S. Expat taxes and/or have foreign accounts that had a balance of over $10K that you have not reported, you will want to catch up and file!
The IRS and Department of Justice have been working hard at finding US citizens who have ignored their filing responsibilities. As a result, they have released a number of amnesty programs that are available for you if you are not in compliance with the IRS or FATCA regulations. At this time, coming forward can help you since the amnesty programs offer lighter consequences than if you get caught by the IRS.
All foreign financial accounts with a $10,000 USD balance at any time during the year should be reported on Form TD F 90-22.1. The statute of limitations on the filing of this FBAR (Federal Bank Account Report) is six years, whether or not the account is still open.
Reporting your Worldwide Income
All U.S. Citizens and Green Card Holders must report all of their worldwide income to the IRS. There are many tax benefits and deductions available to American expats so that you are not subject to double taxation. In order to receive these benefits, you must file your tax return!
Foreign Bank Accounts Reporting (FBAR)
All foreign financial accounts with a $10,000 USD balance at any time during the year should be reported on Form TD F 90-22.1. The statute of limitations on the filing of this FBAR (Federal Bank Account Report) is six years, whether or not the account is still open. The FBAR is due June 30.
Statement of Foreign Financial Assets
New for 2011, is Form 8938: Statement of Foreign Financial Assets. Use this form if you have offshore assets valued at $200,000 or more in total at the end of the year or $300,000 for single filers. Joint filers use this form if the balance at the end of the year is $400,000 or $600,000 at any point in the year.
Voluntary disclosure programs are available that enable you to catch up with missed filings and unpaid taxes with limited penalties. If you are in that situation, give us a call to discuss your options.
Make sure you take advantage of every program there is for American Expats that can help you with your taxes. If you need help with your next move, do not be afraid to contact us, we are here to get you on the right track!