Are you residing in the US and wish to know about FATCA filing needs? Then, don’t worry, you have come to the right place at USTAXFiling.in. Stay tuned to know more about FATCA.
FATCA filing needs all US citizens to report particular foreign assets to the IRS if they cross particular thresholds that are different for people staying abroad or residing in the United States of America. Also, people reporting needs, foreign financial institutions have to report on the assets of their American prospects to eliminate 30 percent withholding on particular payments from the United States.
While the main objective of FATCA is to force tax evaders to step forward, US professionals are sort of caught in this process. It makes sense that professionals might have accounts or assets overseas as it is a part of their daily routine. With the private reporting nature and additional reporting, the act has been known for violating privacy.
Also, the truth remains that FATCA is a need for every citizen, including expats too. So, what do you have to do to remain compliant?
You might encounter banking problems
Overseas Americans might face problems with foreign banks. FATCA reporting needs for banks have become strict, and several banks prefer to eliminate it altogether by simply refusing to work with American prospects. Regardless of whether US professionals are well-established citizens, the report’s needs are not worth the effort for banks. Also, citizens might find it difficult to open accounts, or they might be dropped by the bank without any information. This is necessary that Americans are prepared for this scenario and keep a bank account in the United States if something like this takes place.
Charges are harsh for non-compliance
The IRS says that charges for failing to file are $10,000 for every violation. Also, extra charges are applicable up to $50,000 for constant failure to file after notification of IRS and a 40% charge on an understatement of attributable tax to non-disclosed assets.
There are many options available to become compliant if you are unaware of the reporting needs. The most famous option for professionals is to file under the streamlined process of filing, an IRS program that helps innocent delinquent filers the chance to get caught up without late filing charges. There are no limits to filing under the program, except you should certify that your filing was not purposeful or willful.
Expats who hesitate to alert the IRS to their existence tend to lean towards doing quiet disclosures, which means you file back returns outside the IRS program and slide in under the radar. This is no doubt a risky option. If the IRS knows that you are opting for quiet disclosure and reaches out to you, you become ineligible to participate in the IRS program that opens up to astronomical charges.
USTAXFiling.in recommends US expats file under the streamlined process to reduce risks. There are no charges, and by filing six years of FBARs and three years of taxes, you become compliant. Also, the decision is up to you.
It is the same but different from FBAR.
FBAR or foreign bank account report is the same as FATCA. It is well-designed to uncover tax evaders who use bank accounts overseas to hide their money. FBAR reporting is entirely different as it pertains to account balances $10000 or higher. It is applicable for people with huge amounts, and you should file FinCEN14 by the 15th of October every year electronically. FBAR is all about bank accounts and no need to show other assets.
On the other hand, FATCA is comprehensive. You should report foreign assets and bank accounts, and the thresholds are higher. You have to file FATCA if your assets exceed the values:
Married taxpayers staying abroad:
$400,000 on the last day of the tax year and $ 600,00 at any time of the year
Single taxpayer staying overseas:
$300000 at any time of the year and $200000 on the last day of the tax year.
Married taxpayers staying in the United States:
$100,000 any time of the year and $150000 on the last day of the tax year
Single taxpayer staying in the United States:
$75000 at any time of the year and $50000 on the last day of the year The toughest part of FATCA is to identify what should be reported. Reporting needs for FBAR are straightforward, but for FATCA reporting, not that much. Specified foreign assets make it hard to decipher what assets are within their definition. IRS defines assets as:
- Foreign mutual funds
- Foreign stockholdings
- Foreign hedge funds
- Foreign pension
- Foreign financial accounts
- Foreign partnership interests
- Foreign issued life insurance
- Foreign real estate at a foreign entity. You don’t have to report real estate, but the entity is a foreign financial asset, and its value includes the real estate value.
- Your foreign house should not be reported.
If you are confused, don’t worry, as USTAXFiling.in experts will aid you in knowing which assets you have to report.
Renouncing to eliminate FATCA might be unrealistic for some
With the increased details about the invasive property of FATCA, several Americans are considering the alternative of renouncing their citizenship. If you give up your citizenship will relieve you from FATCA reporting needs. But, this is not at all easy. The first thing is that renouncing citizenship will cost you $2,350. You have to pay fees to hand in your passport. The price is too much for a few expats, and they might be forced to continue filing their US taxes as a citizen as they cannot pay such a huge amount. Another reason is that there is a possibility that you might be considered a covered expat. It means that you are subject to the exit tax.
It is necessary to understand that if you expatriate, you should prove five years of compliance with US expat taxes. So, if you are not paying your US taxes, you have to become compliant before you file for renunciation.
FATCA reporting doesn’t have to be complicated
Foreign financial reporting might be confusing for you. But, if you know that you have to file FATCA, the best thing is that you don’t have to go it alone. We are there to help you to meet your FATCA reporting needs and file form 8938, and eliminate charges for non-compliance
Still, have questions about FATCA?
If you have any doubts about FATCA, don’t hesitate to contact us at USTAXFiling.in. We are there to help our clients in the best possible way. We know how challenging it is for you to know about FATCA, and if you are unaware of the process, don’t worry, as our USTAXFiling experts are there to help you. They will tell you everything about FATCA and provide you with the best possible solution. If you have any doubts, our USTAXFiling experts will resolve all your queries. Our tax experts at USTAXFiling.in make sure to discuss everything with our prospects and help them to report FATCA. They are available 24*7 so that you can reach out to them at your convenience. When you choose USTAXFiling.in, you don’t have to worry about FATCA filing requirements, as everything is taken care of by our USTAXFiling experts. So, what are you waiting for? Schedule your call with USTAXFiling.in to file your FATCA.