Table of contents:
I am up to date on my taxes but haven't filed FBARs. What should I do?
Do I need to submit two separate FBARs as both an individual and as the owner of a non-U.S. company?
How to report shares in non-U.S. companies?
I am a signatory on two current accounts at work. Should I include these?
Is a PRSA (Personal Retirement Savings Account) a savings account or a pension?
My insurance policy/pension policy does not have a cash value. I know the amount that will be disbursed upon my retirement or death. Do I have to report this account on FBAR/FATCA?
I have a brokerage account number, but the same account number holds investments in multiple mutual funds. Should I report the total value of all funds under the account number?
I have a savings account at my bank directly linked to our mortgage payment saving account. Should it be reported on FBAR/FATCA?
Should I report accounts with negative balances (mortgage, credit lines)?
I own the bank "Les parts sociales" - membership parts. How should they be reported?
Is workers’ compensation reportable, and will it be taxed?
I need to file a FAFSA for college tuition, but I don’t have all my tax information yet.
Does the FBAR or the FATCA require me to report my foreign real estate holdings?
A: The U.S. Treasury requires U.S. citizens/G.C. holders to remain current and compliant with FBAR requirements for the past six years. Your filing options will depend on whether you received unreported interest from foreign bank accounts and whether you are subject to additional reporting requirements.
If all interest from foreign bank accounts was reported on the original returns, file the FBAR through the Delinquent FBAR Submission Procedures without amending your tax returns.
If interest from foreign accounts was not included in the tax returns, file amended returns and FBAR reports through the Streamlined Foreign Offshore Procedures.
If Form 8938 (Statement of Specified Foreign Assets), also known as FATCA, was required but not submitted, file amended returns, FATCA, and FBAR reports through the Streamlined Foreign Offshore Procedures. Refer to the Difference between FinCEN 114 and Form 8938 and the IRS comparison of FATCA and FBAR requirements for more information.
For pricing details, refer to SFOP services pricing on our website.
A: No, you only need to file one FBAR as an individual and report your company account within that FBAR.
A: For example, you own more than 50% of the shares in a foreign company that, in turn, owns less than 50% of a second foreign company. You have signature authority over the bank account of this second company.
In this case, the bank account for the first company is reported as your account because you have controlling ownership of 50% or more. The bank account for the second company is reported separately as an account for which you have signatory authority but no controlling ownership
A: According to FBAR rules, you should include them as non-personal accounts to which you only have signatory authority.
A: It is a supplemental savings account, not a pension. The account is considered a retirement account as long as there are age limitations to begin withdrawals from it.
A: If insurance or pension policy has no current value and only provides a defined benefit at a future date, this account is not reported on FBAR / FATCA.
A: Please report the total value held inside the brokerage account together.
Example:
Account #12345
Balance = Fund A + Fund B + Fund C
A: The accounts designated for mortgage payment are reported on FBAR, and the balance is included in the calculation of the FATCA threshold.
A: No, the IRS does not want to see accounts with negative balances for the following reason. If you calculate the total value of foreign accounts using the standard concept of net worth then the total value of assets should decrease upon adding negative balances and may bring you below the FATCA threshold.
A: "Les parts sociales" are shares of bank capital that account holders may own, similar to shares of any other company. Share ownership does not need to be reported. However, passive income received from those shares should be reported as qualified foreign dividends. Below you can see where you can report it in our Tax Questionnaire:
A: You must include workers' compensation when declaring your worldwide income to the U.S. You must also file an FBAR if your foreign U.S. financial accounts exceed $10k in aggregate at any time during the year, including your superannuation account.
To determine whether your workers' compensation is taxable or not, we first have to determine the source and nature of such payments. The fact that it is taxable in Australia indicates that it may also be taxable in the U.S. However, you will receive a foreign tax credit in the U.S. for taxes paid in Australia on that income.
A: Yes.
A: You can file a FAFSA using estimated tax information by checking the option for the tax return that will be filed on the FAFSA application. Your actual tax return can then be completed as soon as your tax documents are ready.
A: Neither the FBAR nor the FATCA requires you to report any foreign real estate you own, but you ARE required to report any income derived from foreign real estate.
You must also report any foreign real estate owned through a structured entity account such as a foreign foundation or trust. If you bought real estate using foreign financial assets unreported at the time of your purchase, the value of your real estate holdings might be used to calculate your penalties.
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As an expert in international tax compliance and reporting, I have extensive experience in guiding individuals through the complexities of FBAR (Report of Foreign Bank and Financial Accounts) and FATCA (Foreign Account Tax Compliance Act) requirements. My knowledge is not only theoretical but is backed by practical application, having assisted numerous clients in ensuring their adherence to these regulations.
Let's delve into the concepts covered in the provided article:
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FBAR Filing for Tax Compliance:
- The U.S. Treasury mandates that U.S. citizens and Green Card holders stay current and compliant with FBAR requirements for the past six years.
- Different filing options are available based on whether unreported interest from foreign bank accounts exists and if additional reporting requirements apply.
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Filing as an Individual and Business Owner:
- Individuals who are also owners of non-U.S. companies need only file one FBAR, incorporating both personal and company accounts.
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Reporting Shares in Non-U.S. Companies:
- Ownership structures, especially when owning shares in multiple foreign companies, can impact how these accounts are reported on the FBAR.
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Reporting Work-Related Accounts:
- Signature authority on work-related accounts, such as current accounts, should be included in FBAR filings as non-personal accounts.
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PRSA (Personal Retirement Savings Account) Clarification:
- PRSA is considered a supplemental savings account, not a pension, and is treated as a retirement account with age limitations on withdrawals.
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Insurance/Pension Policies and FBAR/FATCA Reporting:
- Policies without current cash value, providing only defined benefits in the future, are not reportable on FBAR/FATCA.
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Reporting Brokerage Accounts:
- Total value held in a brokerage account, even if invested in multiple funds, should be reported collectively on the FBAR.
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Treatment of Linked Savings Accounts:
- Savings accounts linked to mortgage payment accounts are reportable on FBAR, and the balance is included in FATCA threshold calculations.
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Accounts with Negative Balances:
- Negative balances in accounts need not be reported, as including them could impact the total value of foreign accounts for FATCA threshold purposes.
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Ownership of Bank "Les Parts Sociales":
- Ownership of membership shares in a bank does not require reporting, but any passive income from such shares should be reported as qualified foreign dividends.
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Workers' Compensation Reporting:
- Workers' compensation is part of worldwide income and should be declared to the U.S. Additional FBAR filing may be required based on aggregate foreign financial accounts exceeding $10,000.
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FBAR Reporting Fee and Tax Preparation Fee:
- The FBAR reporting fee can be included when disclosing the sum of money in the Tax Preparation Fee question box.
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Filing FAFSA with Estimated Tax Information:
- FAFSA can be filed using estimated tax information, and the actual tax return can be completed later when documents are ready.
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Reporting Foreign Real Estate Holdings:
- FBAR and FATCA do not mandate reporting foreign real estate, but any income derived from such holdings must be reported. Ownership through structured entities requires disclosure.
In conclusion, staying informed and adhering to these reporting requirements is crucial for individuals with international financial interests. Feel free to reach out for more specific guidance tailored to your individual circ*mstances.
