The FBAR filing deadline is June 30. Under FATCA, U.S. tax residents must report the existence of foreign accounts and income from them on Schedule B and may be required to file Form 8938.
U.S. citizens and residents must report their worldwide income on their federal income tax return to the Internal Revenue Service (“IRS”). If you lived outside the U.S. on April 15, 2015, the extended filing deadline for your 2014 tax return is Monday, June 15, 2015.
The deadline to report your interest in certain foreign financial accounts on the FBAR is June 30, 2015.
The filing requirements relating to offshore assets can seem burdensome. An individual with an interest-bearing checking account in Germany, for example, may not realize that they had to file FBARs or report this account on Schedule B of their Form 1040. The potential civil and criminal penalties for such failures can be enormous.
The experienced international tax lawyer at Columbus, Ohio-based law firm Porter Law Office, LLC represents U.S. taxpayers residing in the U.S. and abroad in reporting their foreign accounts under one of several Internal Revenue Service (“IRS”) offshore voluntary disclosure programs, such as the OVDP.
This article provides tips for individuals who may be subject to these reporting rules.
Filing Requirements Under FATCA
The Foreign Account Tax Compliance Act ( FATCA) requires U.S. citizens and resident aliens to report any worldwide income. As part of reporting your worldwide income, you must report to the IRS the existence of foreign accounts and income from them. You report this information on Schedule B,-Interest-and-Ordinary-Dividends) (Form 1040), Interest and Ordinary Dividends with your tax return.
In addition, you may also have to file Form 8938, Statement of Special Foreign Financial Assets with your tax return. This form is used to report certain foreign financial assets if the aggregate value of those assets is greater than certain threshold levels.
The instructions to Form 8938 contain more information.
FBAR Filing Requirements
FBAR refers FinCEN Report 114, Report of Foreign Bank and Financial Accounts. The FBAR is not filed with the IRS. Rather, it is filed with the Financial Crimes Enforcement Network (“FinCEN”). FinCEN is a bureau of the Treasury Department. The deadline to file the FBAR is June 30.
Generally, you will need to file the FBAR if you had an interest in (or signature authority over) a foreign financial account that had an aggregate value of more than $10,000 at any time during 2014. FBARs are now required to be filed electronically. You must file FBARs electronically.
The IRS has assembled an FBAR reference guide, which you should review if you believe you have an FBAR filing requirement.
FBAR and Form 8938
A common misconception is that the FBAR and Form 8938 require reporting of the exact same information. While it is true that the information these forms elicit is often very similar, there are nuanced differences that must be understood.
Form 8938 does not replace or affect an individual’s FBAR filing obligation. If you meet the reporting threshold for each, both must be filed. Here is a comparison of the Form 8938 and FBAR requirements.
Contact Experienced Columbus Ohio Tax Lawyer
Voluntary Disclosure and FBAR Representation
The tax attorney at the Columbus, Ohio-based law firm Porter Law Office, LLC has in depth experience resolving difficult voluntary disclosures for reporting income from foreign investments and filing FBARs. By hiring Porter Law Office, LLC, you will be guided through your international tax compliance obligations to the best possible resolution at the least overall cost. Ohio tax lawyer Matthew R. Porter is an experienced international tax attorney who understands what it takes to overcome the legal hurdles associated with FATCA and to file delinquent FBARs under the IRS’s voluntary disclosure procedures. Schedule a free consultation today to discuss your delinquent FBAR filing options.