With tax season nearing its end, many throughout the United States are making sure they’ve covered all of their bases. While domestic taxes may be at the forefront of your consideration set at the moment, it’s important to stress that the April 15 deadline applies to more than just assets within our country. The Internal Revenue Service recently echoed this sentiment by issuing a reminder to all citizens who maintain a foreign bank account: File your taxes, or risk accruing fines and penalties.
Here’s what you need to know:
The Report of Foreign Bank and Financial Accounts (FBAR) is a required filing for U.S. citizens, resident aliens, and dual citizens who have $10,000 or more in foreign assets. Because of this threshold, IRS officials maintain that anyone filing should also check to see if they have a U.S. tax liability and a federal tax return filing requirement. They’ve compiled a handy fact sheet to help answer the most commonly asked questions. If you meet the listed requirements for filing, you must either fill out a Form 114 with the Financial Crimes Enforcement Network (FinCEN), or request an extension for a later date.
Expatriots and Citizens Abroad
Whether you live in the United States or not, the filing deadline is still a requirement. Any American citizens living abroad, as well as expatriots, must report their assets to the federal government, or risk being charged interest on their payments, currently at the rate of 6 percent per year, compounded daily starting April 16. If you have an adjusted gross income of $66,000 or less, the IRS encourages you to use their free file system. For answers to broader questions regarding international taxation, visit the International Taxpayers page to learn more.
While the free file system may only apply to individual taxes, we understand that your business interests may also contain foreign assets. If you’d like to work with an accountant in the Orange County community to examine your finances and find the most cost effective route for filing on your company’s behalf, please get in touch. Our offices are located in Irvine. For more information on financial topics, check out our blog.