This past week, the IRS issued a reminder to US citizens and resident aliens to find out whether or not they have a tax liability. They also noted that the April deadline pertains to FBARs (foreign bank account reports) as well. This year the reminder bears special heeding as the end of the OVDP (Offshore Voluntary Disclosure Program) is on the horizon. Keep the following tips in mind as we approach the April deadline.
Foreign Bank Account Reporting Deadline
If you’re wondering who has to file an FBAR, the answer is typically anyone who has a foreign bank account or accounts whose combined total amounts to more than $10,000. If applicable, you’ll file this report with FinCEN, or Financial Crimes Enforcement Network, rather than the IRS. Though the deadline for FBAR is April 17, 2018 (aligning with the deadline for Federal Tax Returns), taxpayers receive an automatic extension until October 15, 2018.
FATCA Form 8938
All US citizens – even those residing abroad – must report their worldwide income in the form of a tax return each year. Expats may find that they also have to fill out Form 8938 to fulfill their FATCA (Foreign Account Tax Compliance Act) requirement. The filing threshold for FATCA is $200,000 in the total value of assets for unmarried individuals on the last day of the year or $300,000 at any point. For married individuals, those thresholds rise to $400,000 and $600,000, respectively.
Citizens Living Abroad Must File
Though expats are granted an automatic extension until June 15th on their tax returns, the fact remains that they must file even while living abroad. Exclusions and credits apply, however. So though you must file, you may find you do not owe money.
End of OVDP Scheduled for 2018
The OVDP is an amnesty program offered by the IRS that will end September 28, 2018. This program helps those who were purposefully hiding money in overseas accounts to become tax compliant without fear of prosecution. Many expats’ failure-to-file was non-willful because they did not know there was a requirement. These expats can use the Streamlined Filing Procedures to get caught up.
Even if you renounced your US citizenship in 2017, you must still file a dual-status alien return utilizing Form 8854. This is the last step in the renunciation process, so it’s an important one to remember!
Have More Questions About Who Has to File an FBAR or Tax Return?
Contact Greenback today, and we can make getting caught up on your expat taxes painless!