Reporting Foreign Income & Accounts

Reporting Foreign Income & Accounts

The purpose of this page is to make you aware of the possible need to report foreign income and accounts each year. Each form has very specific requirements and you should see their instructions for more detailed information.

Unless an exception applies, you must file Form #8938 if you are a specified person that has an interest in specificed foreign financial assets and the value of those assets is more than the applicable reporting threshold.

If you are required to file Form #8938, you must report the specified financial assets in which you have an interest even if none of the assets affects your tax liability for the year. 

Form #8938 is filed with your federal income tax return.

Exception if no income tax return is required: If you do not have to file an income tax return for the tax year, you do not have to file Form #8938, even if the value of your specified foreign financial assets is more than the reporting threshold.

Specified Person is either a specified individual or a specified domestic entity: Specified Individuals include U.S. Citizens, resident aliens for any part of the tax year, and Nonresident aliens who make an election to be treated as a resident alien for filing a joint income tax return with their spouse may also be required to report foreign accounts and income. Specified domestic entity includes closely held domestic corporation (or partnership) that has at least 50% of its gross income from passive income; closely held domestic corporation (or partnership) if at least 50% of its assets produce or are held for the production of passive income; 

Beware: Failing to file Form #8938 when required could result in significant tax penalties and interest charges.

For specific details on the items below, see the instructions for Form #8938:

Reporting Thresholds Applying to Specified Individuals: Your applicable reporting threshold depends upon whether you are married, file a joint federal income tax return, and line inside or outside the United States.

Reporting Thresholds Applying to Specified Domestic Entities: You satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the tax year.

Specified Foreign Financial Assets Defined: See the instructions for Form 8938, Page 5

Interests in Specified Foreign Assets Defined: See the instructions for Form #8938, Page 6

Reporting Maximum Value: See the instructions for Form #8938, Page 7

Assets Not Required To Be Reported: See the instructions for Form #8938, Page 8

FinCEN #114 FBAR. For more detaileds see the instructions for FinCEN #114

U.S. Citizens, resident aliens, and any domestic legal entity such as a corporation, partnership, limited liability company, estate or trust may be required to file FinCEN #114.

This form is required if the monetary threshold (total aggregate value of all foreign financial assets or accounts) is $10,000 or more at any time of the tax year,

It is an annual form due on June 30 and no extensions are allowed.

The form must be filed electronically through FinCEN BSA E-Filing System.

This form is NOT filed with the taxpayer's federal income tax return.

Beware: Failing to file FinCEN #114 may result in significant civil & criminal penalties.

FinCEN #114 Help Telephone Numbers: 866-270-0733; 866-346-9478; 800-949-2732

CALL ME NOW at 561-746-1926 or 561-339-8102 to schedule a FREE, Confidential, No-Obligation Tax Consultation.