New Foreign Asset Reporting Guidelines 

If you hold foreign assets or have signature authority over foreign assets such as bank accounts, stocks, bonds, retirement plans, or sometimes real estate, you may need to report this information to the IRS. The consequences for not reporting are costly, so be sure to take note of deadlines, which have changed since last year, and allow time to prepare.

Which forms do you need to file?

The IRS and the Treasury Department require annual disclosure of foreign assets on one or all of the following reports:

• Individual tax return (Part III of Schedule B – interest and ordinary dividends). This is required for all taxpayers with foreign financial assets.
• FATCA Form 8938 (Statement of Specified Foreign Financial Assets – filed with your individual tax return).

FATCA Form 8938	Living in the US	Living outside the US
Single taxpayers and those married filing separately	Hold at least $50,000 in foreign assets on the last day of the tax year or have more than $75,000 in foreign assets at any time during the year.	Hold at least $200,000 in foreign assets on the last day of the tax year or have more than $300,000 in foreign assets at any time during the year.
Taxpayers married filing jointly	Hold at least $100,000 in foreign assets on the last day of the tax year or have more than $150,000 in foreign assets at any time during the year.	Hold at least $400,000 in         foreign assets on the last day of the tax year or have more than $600,000 in foreign assets at any time during the year.

 

• FinCEN Form 114 (FBAR)
  • Required if you have ownership or signature authority over foreign financial accounts with an aggregate value that exceeds $10,000 at any time during the calendar year.
  • File electronically using the Treasury Department e-filing system.
  • The due date recently changed from June 30, 2017 to April 18, 2017.
  • A six-month extension is available.

What happens if you don’t file?

If you do not file the appropriate reports, you risk incurring penalties of up to $10,000. If the omission is deemed willful, you could lose up to 50% of the balance in the account. Be sure to retain adequate support documentation as it may be required for review.

Reporting guidelines can be confusing. If you have any questions about requirements for reporting foreign assets, contact us today.