This is a reminder that if you filed for an extension prior to June 15th, the final deadline for your US expatriate taxes, FBAR, and FATCA filing is October 15th 2018.
FBAR compliance is very important for any taxpayer subject to IRS tax reporting requirements. The failure to file a timely FBAR and remain in IRS compliance can lead to significant fines, penalties and other possible consequences.
It is always best to start your tax filing as soon as possible, even if you are still missing a document or two. Rachel Finch, an IRS Enrolled Agent and her team are here to help make filing your US expat taxes a hassle-free process. Please get in touch either through our contact page or by calling 01934 620011 and we’ll help you get everything ready.
Who Should file an FBAR?
A US expat is required to file an FBAR if their total aggregate balance of foreign financial accounts on any given day exceeds $10,000. The typical accounts held overseas are:
• Your bank accounts
• Investment accounts, and
• Retirement accounts
Remember: this threshold applies to all accounts you own separately and jointly, as well as accounts in which you may not own or have a financial interest in,but do have signature authority over. An example of the latter includes bank accounts that you are in charge of at your place of employment or through a business in which you hold interest.
FATCA Filing Requirements and Form 8938
The Foreign Account Tax Compliance Act (FATCA) is a part of the government’s efforts to combat offshore tax evasion. American expats of all income levels with foreign accounts and assets should know about it. FATCA requirements impact U.S taxpayers and overseas financial institutions:
• U.S. taxpayers with foreign accounts and assets may need to file Form 8938: Statement of Specified Foreign Financial Assets with their annual U.S. Income Tax Return
• Foreign financial institutions must disclose information about U.S. citizens who hold accounts overseas
Form 8938 is the same as an FBAR in many ways. However, it has lower reporting thresholds and requires you to disclose certain “non-account” assets such as:
• Business and trust ownership
• Certain contractual investments with foreign parties
FATCA Due Dates
As Form 8938 is filed with your U.S. income tax return, due dates applicable to Form 1040 apply. Automatic extensions for expats living abroad or additional extensions to October 15th can provide more time to collect needed information from foreign financial institutions and determine your filing requirements.
Form 8938 Filing Thresholds
Filing thresholds differ depending on where you lived during the tax year.
If you live within the U.S. the entire tax year, you must file Form 8938 if the value of your reportable foreign assets exceeds either of these levels:
• More than $50,000 (or $100,000 if married filing jointly) at the end of the year, or
• More than $75,000 (or $150,000 if married filing jointly) at any time in the year
Expats living abroad have an increased reporting threshold. You don’t need to complete this form unless your foreign assets exceed either:
• $200,000 (or $400,000 if married filing jointly) at the end of the year, or
• $300,000 (or $600,000 if married filing jointly) at any time during the year