FATCA

U.S. taxpayers who live overseas may still have a Foreign Bank Account Report (FBAR) and form 8938 filing report for their foreign financial accounts. In general, your FBAR obligations will not be impacted by the fact that you live overseas. If you are a U.S. person and your aggregate account balance of foreign accounts exceeded $10,000 during the year, you must file an FBAR, regardless of where you live.

Your Foreign Account Tax Compliance Act (FATCA) obligations using form 8938 require a bit more discussion. Whether you need to file a form 8938 could be impacted by country of residency because there are different threshold amounts depending on whether you live in the U.S. or abroad.

Form 8938 Thresholds for Taxpayers Living Abroad

The Foreign Account Tax Compliance Act (FATCA) sets reporting requirements for both foreign financial insinuations and U.S. taxpayers who hold specified foreign assets. If your foreign financial institution is in a country that has an agreement with the United States, then you will be asked whether or not you are a U.S. person for tax purposes. Answering “yes” to this question will trigger a requirement on behalf of the financial institution to report your account information to the IRS.

Individual Requirements Under FATCA

By requiring foreign financial institutions to report account information for U.S. taxpayers, the government and the IRS have made it easier to track tax evasion by individuals who are hiding money in foreign bank accounts. In addition, taxpayers must file their own report of their foreign accounts, which is done on form 8938.

Articles Tagged with FATCA

How Does Living Overseas Impact Your FBAR and FATCA Obligations?

What is the Foreign Account Tax Compliance Act?