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Foreign Bank Accounts - New Filing Requirements & New Form 8938

Posted by Admin Posted on Jan 16 2015

There are significant penalties for not filing the two forms listed below if they are required to be filed and are not.  If you are above the filing thresholds listed below I will need account information in order to prepare these forms.  If you have any questions please call and we can discuss, or we can discuss when we meet.

Form FinCEN 114:

In past years I have had a few clients that had to file with the U.S. Treasury the FBAR form TD F 90-22 1.  That form has been superseded with the new form FinCEN 114.  The reporting threshold for filing this form is set at $10,000 for total value of financial assets in foreign accounts.  This form is not filed with your individual tax return but is rather filed separately through the Financial Crimes Enforcement Network's (FinCEN's) BSA e-filing system which is part of the U.S. Treasury, not the Internal Revenue Service.  This form is due no later than June 30th of the year immediately following the calendar year being reported.

Form 8938:

If you are a U.S. citizen or resident alien who has an interest in certain specified financial assets and meet the reporting thresholds then we will need to file the new Form 8938 "Statement of Specified Foreign Financial Assets" with your 2014 Federal tax return.  The reporting thresholds for taxpayers living in the United States are the following: value of your specified financial assets more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.  For married taxpayers filing value of your specified financial assets more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.

The term "specified foreign financial assets" include in part the following: 1) Financial accounts maintained by a foreign financial institution (foreign financial investments maintained by a U.S. domestic financial institution should not be included in determining if you meet the thresholds). 2. The following foreign financial assets if held for investment and not held in an account maintained by a financial institution: a. Stock or securities issued by someone that is not a U.S. person. b. Any interest in a foreign entity and c. Any financial instrument or contract that has an issuer or counterparty that is not a U.S. person.

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