For All of You US Citizens Living Abroad – It’s FBAR Time Again

Who Must File an FBAR

United States persons are required to file an FBAR if:

1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

For the full details and to use the IRS’s free on-line submission form……Go to:

https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

PS just so you know one on-line service charges $150 to use their service and submit the FBAR.  So using the above IRS site saves you $150…

Obamacare (Affordable Care Act) and the Expat

Obamacare (Affordable Care Act) goes into effect January 1, 2014.

How will it affect Expats living in Ecuador or elsewhere outside of the US? And more specifically, how will Obamacare affect those who live here full-time but use an address in the states as your residence address for banking, tax returns and social security?

From what I have read it can affect us in our pocketbooks.

If the US government has not been informed that we are living abroad then we will be considered living in the US and we’ll be required to participate in the new health care program, not usable in Ecuador. Or pay a fine.

We have read that 15,000 to 20,000 new enforcement agents will be hired for the IRS to enforce this new law.

Anyone who is interested in researching this further can go online Expat and Obamacare.  One more question would be if you have Medicare or other insurance, does that fulfill your requirements even if you show a US residence address?

 

Internal Revenue Service – Expat Information – FBAR Form TD F 90-22.1

The IRS requires that the FBAR form be filed annually:

Who must file an FBAR:

United States persons are required to file an FBAR if:

1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

See the full IRS guideline at: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-(FBAR)

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

TD F 90-22.1 can be found at:  http://www.irs.gov/pub/irs-pdf/f90221.pdf

The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.

The filing date is June 30 of each year. Add this one to your calendars.

IRS and Social Security Forms

It is almost Income Tax filing time again, but when you think you have completed every form that the IRS wants, think again. There are just a few more plus one from Social Security.

These are the forms that the IRS and Social Security require that you complete each year if you are living abroad.  Just to give you a quick review of these forms:

1. IRS form 8938 is to list assets held outside of the US, this form is only required if you file a tax return.
2. SS form 7162 is to update Social Security of your current status. This is required if you have informed Social Security of your move outside of the US or are receiving your Social Security payments outside of the US. This is required annually.
3. IRS FBAR is required to list any bank accounts held outside of the US if at any time during the year you had an aggregate total of $10,000 in those foreign accounts. This is required annually.

A more detailed description is listed below:

• The IRS requires that Form 8938 Statement of Specified Foreign Financial Assets be completed as part of your tax return

The IRS requires that you submit Form 8938 (Statement of Specified Foreign Financial Assets) should be filed by taxpayers with specific types and amounts of foreign financial assets or foreign accounts.  It is important for taxpayers to determine whether they are subject to this new requirement because the law imposes significant penalties for failing to comply.

Form 8938, the instructions, regulations implementing this new foreign asset report, and other information to help taxpayers determine if they are required to file Form 8938 is available on the web at: http://www.irs.gov/businesses/corporations/article/0,,id=236667,00.html .

• Social Security requires that you submit a completed form 7162 each year

The FEP is one of the integrity measures used by the Social Security Administration (SSA) to verify the existence and identity of beneficiaries living outside the United States. It does not apply to countries where Treasury restrictions prohibit delivery of SSA payments (see RS 02650.001C.). Contacts are made annually or biennially to help us determine if any events have occurred that affect the beneficiaries’ eligibility to benefits or their ability to handle their own funds.

https://secure.ssa.gov/poms.nsf/lnx/0302655001

• The IRS requires that the FBAR form be filed:

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.

http://www.irs.gov/businesses/small/article/0,,id=148849,00.html

We complete these forms and have someone going back to the states take them with them to mail. Our friend Joe Tana has just mailed ours this week.

Fbar

Fbar is also know as TD F 90-22.1 (Rev. March 2011) Department of the Treasury

There is an IRS form that is required to be completed each year if you have a aggregate total of over $10,000 in foreign bank accounts. Below are the general instructions right from the form. From what we have read the IRS will allow this form to be completed this year and forgive it not being prepared and filed in past years. If you have not completed this form in past years this is your last chance to be given amnesty.

General Instructions
Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (the
“FBAR”), is used to report a financial interest in or signature authority
over a foreign financial account. The FBAR must be received by the
Department of the Treasury on or before June 30th of the year
immediately following the calendar year being reported. The June 30th
filing date may not be extended.

Who Must File an FBAR. A United States person that has a financial
interest in or signature authority over foreign financial accounts must file
an FBAR if the aggregate value of the foreign financial accounts
exceeds $10,000 at any time during the calendar year. See General
Definitions, to determine who is a United States person.

I have attached a link to the form and the instructions for your review. This is a pdf file.

Fbar