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FBAR : The Foreign Bank Account Report (FBAR) requires U.S. persons with foreign financial accounts exceeding $10,000 to report them annually using FinCEN Form 114. This applies to accounts like bank accounts, brokerage accounts, and certain foreign retirement plans.
FATCA: The Foreign Account Tax Compliance Act (FATCA) mandates U.S. taxpayers to report specified foreign financial assets on Form 8938 if their value exceeds set thresholds. FATCA also requires foreign financial institutions to report U.S. account holders to the IRS.
If you’re a U.S. person with foreign financial accounts, you must comply with FBAR (Foreign Bank Account Report) filing requirements. You need to file an FBAR if the total value of your foreign accounts exceeds a certain threshold at any point during the year. This includes various types of accounts such as bank accounts, brokerage accounts, and certain foreign retirement plans. The FBAR is due annually by mid-April, but you can extend this deadline to October. Proper reporting helps you avoid significant penalties, so maintain accurate records of all foreign accounts to ensure a smooth filing process.
Under FATCA (Foreign Account Tax Compliance Act), U.S. taxpayers are required to report their foreign financial assets. If the value of these assets exceeds specified thresholds by the end of the year or at any time during the year, you must file Form 8938 along with your tax return. This form provides detailed information about your foreign accounts and assets. Meeting U.S. FATCA reporting requirements is crucial to avoid penalties, so gather all necessary documentation, such as account statements and ownership proof, to fulfill your obligations effectively.
Use the IRS streamlined filing procedures to mitigate penalties.
Ensure accurate reporting by using correct currency conversions and consistent valuations.
Regularly review all foreign holdings to prevent oversight.
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