Table of contents:
Q: I am up to date on my taxes but haven't filed FBARs. What should I do?
A: The U.S. Treasury requires U.S. citizens/G.C. holders to remain current and compliant with FBAR requirements for the past six years. Your filing options will depend on whether you received unreported interest from foreign bank accounts and whether you are subject to additional reporting requirements.
If all interest from foreign bank accounts was reported on the original returns, file the FBAR through the Delinquent FBAR submission procedures without amending your tax returns.
If interest from foreign accounts was not included in the tax returns, file amended returns and FBAR reports through the Streamlined Foreign Offshore Procedures.
If Form 8938 (Statement of Specified Foreign Assets), also known as FATCA, was required but not submitted, file amended returns, FATCA, and FBAR reports through the Streamlined Foreign Offshore Procedures. Refer to the Difference between FinCEN 114 and Form 8938 and the IRS comparison of FATCA and FBAR requirements for more information.
For pricing details, refer to SFOP services pricing on our website.
Q: Do I need to submit two separate FBARs as both an individual and as the owner of a non-U.S. company?
A: No, you only need to file one FBAR as an individual and report your company account within that FBAR.
Q: How to report shares in non-U.S. companies?
A: For example, you own more than 50% of the shares in a foreign company that, in turn, owns less than 50% of a second foreign company. You have signature authority over the bank account of this second company.
In this case, the bank account for the first company is reported as your account because you have controlling ownership of 50% or more. The bank account for the second company is reported separately as an account for which you have signatory authority but no controlling ownership
Q: I am a signatory on two current accounts at work (or any other accounts which are not mine). Should I include these?
A: According to FBAR rules, you should include them as non-personal accounts to which you only have signatory authority.
Q: Is a PRSA (Personal Retirement Savings Account) a savings account or a pension?
A: It is a supplemental savings account, not a pension. The account is considered a retirement account as long as there are age limitations to begin withdrawals from it.
Q: My insurance policy/pension policy does not have a cash value. I know the amount that will be disbursed upon my retirement or death. Do I have to report this account on FBAR/FATCA?
A: If the insurance or pension policy has no current value and only provides a defined benefit at a future date, this account is not reported on FBAR / FATCA.
Q: I have a brokerage account number, but the same account number holds investments in multiple mutual funds. Should I report the total value of all funds under the account number, or should I list them separately?
A: Please report the total value held inside the brokerage account together.
Example:
Account #12345
Balance = Fund A + Fund B + Fund C
Q: I have a savings account at my bank directly linked to our mortgage payment saving account. Should it be reported on FBAR/FATCA?
A: The accounts designated for mortgage payment are reported on FBAR, and the balance is included in the calculation of the FATCA threshold.
Q: Should I report accounts with negative balances (mortgage, credit lines)?
A: No, the IRS does not want to see accounts with negative balances for the following reason. If you calculate the total value of foreign accounts using the standard concept of net worth then the total value of assets should decrease upon adding negative balances and may bring you below the FATCA threshold.
Q: I own the bank "Les parts sociales" - membership parts. How should they be reported?
A: "Les parts sociales" are shares of bank capital that account holders may own, similar to shares of any other company. Share ownership does not need to be reported. However, passive income received from those shares should be reported as qualified foreign dividends. Below you can see where you can report it in our Tax Questionnaire:
Navigate to the Life & Income > Income TQ section on the left side and click Yes next to the statement I receive dividend income.
Navigate to Income > Passive Income > Dividends tab at the top and click Yes under the question Did you receive non-U.S. dividends?
Fill in the table.
Q: Is workers’ compensation reportable, and will it be taxed?
A: You must include workers' compensation when declaring your worldwide income to the U.S. You must also file an FBAR if your foreign U.S. financial accounts exceed $10k in aggregate at any time during the year, including your superannuation account.
To determine whether your workers' compensation is taxable or not, we first have to determine the source and nature of such payments. The fact that it is taxable in Australia indicates that it may also be taxable in the U.S. However, you will receive a foreign tax credit in the U.S. for taxes paid in Australia on that income.
Q: Can I include the FBAR reporting fee when adding the sum of money into the Tax Preparation Fee question box?
A: Yes.
Q: I need to file a FAFSA for college tuition, but I don’t have all my tax information yet.
A: You can file a FAFSA using estimated tax information by checking the option for the tax return that will be filed on the FAFSA application. Your actual tax return can then be completed as soon as your tax documents are ready.
Q: Does the FBAR or the FATCA require me to report my foreign real estate holdings?
A: Neither the FBAR nor the FATCA requires you to report any foreign real estate you own, but you ARE required to report any income derived from foreign real estate.
You must also report any foreign real estate owned through a structured entity account such as a foreign foundation or trust. If you bought real estate using foreign financial assets unreported at the time of your purchase, the value of your real estate holdings might be used to calculate your penalties.