Mandatory FATCA Filing for Eligible Individuals & Married U.S. Taxpayers
Haven’t you been filing FATCA when you are eligible? Attn! This could be a huge costly affair. Thousands of taxpayers who are citizens or residents of the United States being eligible to report FATCA could not report, due to U.S. tax knowledge and are receiving thousands of dollars hefty penalty notices from the IRS. The keen note to have in mind is to report FATCA and foreign accounts value with the IRS. This article will help you to sum up the threshold attest value, and remember the whole reason to report FATCA is to pay taxes on the income connected with FATCA accounts about your foreign (other than U.S.) financial accounts.
The taxpayers usually think that they just need to report U.S. income and pay taxes, in fact they miss reporting their foreign and U.S. incomes like: tips, gambling winnings, interest and dividend income etc., for this matter they are receiving hefty penalty notices from the IRS and State income tax departments.
This information will fully help you in knowing why to file FATCA, types of foreign accounts reported, and types of foreign income reported to avoid hefty penalty and notices from the IRS. We have been helping more than 40,000 tax payers in avoiding FATCA penalty notices, so we too can help you avoid notices and penalties to save your hard-earned money.
What Is FATCA?
FATCA stands for Foreign Account Tax Compliance Act, and as per the foreign financial account’s threshold limitation FATCA reporting is determined.
Who Has To File FATCA?
As per the U.S. tax law any individual who is a citizen (lawful resident) or a resident alien, having foreign (other than United States) financial accounts value over threshold set the IRS will have to report the all foreign financial accounts details on form 8938 (Statement of Specified Foreign Financial Account).
What Is A Foreign Financial Account?
A financial account which is located outside the United States, it means a financial account in a different country.
What Are The Details Of Foreign Accounts Reported On FATCA?
The below mentioned details of foreign financial accounts are reported, and also kept for submission in case of any enquiry or audit.
- Account Number
- Name of the Account
- Type of Account
- Highest Value of the Account
- Name and Address of the Bank
Is It Enough To Report Foreign Financial Account Details?
Along with reporting all foreign financial account details, a taxpayer has to report foreign income like: interest, dividends, rents etc.
Are There Any Eligibility Criteria To Report FATCA?
Not everybody having foreign financial accounts need to report FATCA, there are defined eligibility set by the IRS and the eligibility is the whole value & threshold. The below mentioned eligibility criteria with the specified whole value is applicable to Married and Unmarried taxpayers need to file Foreign Account Tax Compliance Act.
Living in United States:
- Unmarried individual who is a citizen or resident alien staying in the United States, and having the foreign financial accounts value over $50,000.
- Married individuals with married filing joint tax return, who are citizens or resident aliens staying in the United States having foreign financial accounts value over $100,000.
Living on Outside United States:
- Unmarried individual who is a citizen or resident alien staying outside the United States, and having the foreign financial accounts value over $200,000.
- Married individuals with married filing joint tax returns, who are citizens or resident aliens staying outside the United States, and having foreign financial accounts value over $400,000.
Are There Any Penalties For Not Reporting FATCA?
Non reporting FATCA will attract Failure to report penalty for the amount of $10,000, and additional penalty for the amount of $10,000 for every 30 days soon after issuing failure to disclose notice by the IRS, and the penalty may go up to $60,000 along with civil and criminal penalties.
What Are The Types Of Reportable Foreign Financial Accounts?
The below mentioned accounts are considered for FATCA filing.
- Custodial and deposit accounts held in foreign countries
- Securities and foreign stock held in foreign countries
- Foreign mutual funds
- Interests of foreign partnership
- Insurance held in foreign countries or any other financial account located outside the United States.
Can I Report FATCA For Previous Years?
Yes, you can report Foreign Account Tax Compliance Act for non-reported tax years if your foreign financial accounts balance crossed the threshold as per the IRS set amount, you can find the thresholds mentioned above. Taxpayers do miss reporting FBAR and FATCA due to lack of tax knowledge or ignorance or tax law.
How To File FATCA?
Reporting FATCA appropriately is most important, since incorrect reporting can lead to civil and criminal penalties. You can call us and talk with our tax professionals, who can give you enough information about the reporting accounts and also assess your income generated by the financial accounts.
Crescenttaxfiling.com will email you with a FATCA questionnaire form along with the tax information form, to capture your United States income, foreign financial accounts details and foreign active or passive income, to prepare your tax return and report FATCA. The whole concept of FATCA reporting disclose your foreign active and passive income.
The movement you avail of tax filing and FATCA reporting service, you will be covered with our free of cost audit support on your already filed tax return though you have not filed them through us. You can also enjoy our throughout the year tax expert support and many other tax services worth TWO THOUSAND DOLLARS without any cost.