Foreign Asset Reporting
As an expat living abroad, it is likely that at some point you will open foreign bank accounts or own foreign financial assets such as foreign mutual funds, pensions, and life insurance schemes, that need to be reported. Likewise, if you live in the US and have foreign financial assets and accounts, they may also need to be reported. This also includes green card holders and certain visa holders.
Depending on the nature of these assets and accounts, they may or may not trigger a tax obligation in the US. However, as a US citizen, even if your assets do not generate any US tax, you are still required to report all foreign financial assets and accounts once their aggregate value reaches certain thresholds. Failure to do so may result in severe fines. We can help you report these assets and keep you compliant with FATCA.
Typical questions we often answer:
There are two different reporting mechanisms, depending on the type and value of your assets abroad:
FBAR (Form FinCen114)
Foreign Bank Account Report
An FBAR has to be submitted if the combined value of all your foreign bank accounts exceeds $10,000 at any point in time during the tax year. FBAR is filed separately from your tax return to the Department of the Treasury.
Form 8938
Statement of Specified Foreign Financial Assets
The threshold for Form 8938 varies depending on your situation, starting at $50,000 for US based taxpayers and $200,000 for US expats. It is filed as part of your tax return.
Foreign asset reporting is an important part of US tax obligations but often overlooked by US citizens abroad. We can help you determine if you have to report foreign assets and prepare the appropriate forms for you.