New York, NY (PRWEB) June 21, 2013
Everything US Expats Need to Know About FBAR
With the June 30th deadline quickly approaching, US expats need to know the basic requirements of the Foreign Bank and Financial Accounts report.
With the June 17th deadline past, taxes may be the last thing on the minds of US expats. Before the bank statements are filed away, however, expat taxpayers need to determine if they meet the requirements for the Foreign Bank and Financial Accounts Report (“FBAR”), also known as form TDF 90-22.1. The FBAR must be received by the US Treasury Department on or before June 30th and is used to report foreign held accounts where the owner or signer of the account has over $10,000 in cumulative foreign accounts. Initiated as part of a larger effort to identify and discourage tax evasion, the FBAR also impacts a significant portion of the US expat community.
Form TDF 90-22,1 is used to collect basic information on overseas financial accounts that are owned or controlled by American citizens. For the purposes of this report a financial account includes bank accounts, brokerage accounts, mutual funds, unit trusts, and a number of other financial accounts.
Any US expat with $10,000 or more in all of their foreign bank or financial institutions at any period (even just for a day) during the last year is required to file and submit form TDF 90-22-1 before June 30, 2013. To clarify, the reporting requirement is based on the total account value, not the number of accounts. Thus you are required to submit Form TDF 90-22-1 if the total value of all of your foreign financial accounts exceeds $10,000. For example, an individual has five foreign bank accounts with $2,000 in each, or $10,000 in total and therefore the individual must file the FBAR.
The FBAR applies to United States persons, which refers to:
The FBAR is a US Department of the Treasury form, not an IRS form, although the IRS is the watchdog. To ensure compliance the FBAR, must be received by the Treasury department no later than June 30th, and there are no extensions, even if you have an extension to file your US tax return. The FBAR is also known as form TDF 90-22-1 and can easily be found on the IRS website along with the instructions for completing the form.
"It is not uncommon for expats to not know about the FBAR," according to Greenback Expat Tax Services President David McKeegan. "There are some who confuse the FBAR with Form 8938, which also reports foreign accounts. Some people miss the separate deadline and some people simply don’t know about the requirement to file an FBAR because they never needed to when they were living in the US. In any case, we encourage expats to file their FBAR forms and to get caught up as quickly as possible if they have fallen behind. Although there are considerable penalties associated with the FBAR, the IRS has historically waved these penalties for expats who did not know they needed to file the FBAR."
FBAR non-compliance can result in serious penalties, criminal prosecution or both. Fortunately, the IRS has been very lenient with expats who have fallen behind with their taxes and did not know about the FBAR filing requirements. In light of the current upheaval at the IRS, Greenback Expat Tax Services advises expats who are not compliant to take advantage of programs like the Streamlined Process while they are available. The Streamlined Process allows taxpayers to get caught up by filing the last 3 years’ worth of US tax returns, the last 6 years’ worth of FBAR’s and submit a questionnaire with about 20 questions on it. There are specific guidelines that must be met in order to file under the Streamlined Program, and you must be considered a low risk.
Expats have the option of filing online via the Financial Crimes Enforcement Network (FinCEN). Paper forms should be mailed to:
United States Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
More About Greenback Expat Tax Services
For more information about Greenback Expat Tax Services, FATCA, FBAR, or other issues related to US expat taxes, please email Greenback Expat Tax Services at info(at)greenbacktaxservices(dot)com. You can also visit us at http://www.greenbacktaxservices.com.
Greenback Expat Tax Services specializes in the preparation of US expat taxes for Americans living abroad. Greenback offers straightforward pricing, a simple, hassle-free process, and CPAs and EAs who have extensive experience in the field of expat tax preparation. For more information, please visit http://www.greenbacktaxservices.com.