Foreign asset reporting: You may need to file two forms

Do you know where your money is? If some of it is offshore, you might have tax reporting responsibilities – and those responsibilities generally go further than checking the familiar box on the Schedule B you submit with your federal income tax return. Here are two.

  1. FBAR. Foreign bank account reporting has been required since 1970, so you may be familiar with “Form TD F 90-22.1,” commonly known as “FBAR.” Unless you qualify for an exception, that’s the form you fill out when you control assets in a foreign financial account and the total value of your account exceeds $10,000 at any time during the calendar year.

The FBAR is an annual information form, filed separately from your federal income tax return. You may need to file it even if you receive no taxable income from your foreign account.

The due date for the FBAR differs from Form 1040 as well. Your 2012 FBAR must be received by the Treasury Department no later than June 30, 2013. No extension is available. “Received by” means you’ll need to mail the FBAR before June 30. Since that’s a Sunday, your return must reach its destination by Friday, June 28.

You can also file electronically.

  1. Form 8938. The requirement to file “Form 8938 – Statement of Specified Foreign Financial Assets” began in 2011. Whether you have to complete Form 8938 depends on your federal income tax filing status, and if you’re living in the U.S. or abroad.

For example, say you’re married filing a joint return, and live in the U.S. You may be required to file Form 8938 if the total value of your reportable foreign assets is more than $100,000 on December 31, or more than $150,000 at any time during the year.

Reportable foreign assets include accounts at foreign banks and financial institutions, as well as certain stocks, bonds, and foreign investments. When determining if you meet the threshold for filing, consider the entire value of accounts you own jointly with someone other than your spouse, as well as assets owned by your dependent children.

File Form 8938 with your federal income tax return. Depending on the amount and type of your foreign accounts and other assets, you might need to file both the FBAR and Form 8938.

Please call if you need details or assistance with your filing responsibilities and options.

 

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