Do you have foreign bank accounts or foreign assets?
If you are a United States person and you have over $10,000 in a financial institution outside the U.S. you will need to file a Report of Foreign Bank and Financial Accounts (FBAR) on FinCen Form 114.
This applies to a U.S. person including a citizen, resident, corporation, partnership, limited liability company, trust and estate that has:
a financial interest in or signature or other authority over at least one financial account located outside the United States, andthe aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
Generally, an account at a financial institution located outside of the United States is a foreign financial account including bank accounts, brokerage accounts and mutual funds.
Form 8938 - Statement of Specified Foreign Financial Assets, is a separate informational filing that is broader than the FBAR and it includes assets in addition to foreign financial accounts such as foreign pensions, life insurance policies with a cash value, partnership interests and trusts. The reporting threshold for Form 8938 starts as low as $50,000 if the total value of assets exceeds this amount.
Are you a U.S. citizen or green card holder expat living or working outside the U.S.?
The U.S. taxes its citizens and residents on worldwide income, therefore, when you are living or working outside of the U.S. your tax filings become more complex. You may also continue to have state tax filing obligations, depending on whether you own property or your days of presence in that state.
Plan ahead for tax purposes if you are obtaining your U.S. green card.
If you are in the process of obtaining your green card, here is what you need to know to file your federal and state taxes.
You will become a U.S. tax resident upon receipt of your green card, meaning you will be taxed on your worldwide income.
Income from sources outside of the U.S. will be subject to U.S. tax, even if taxed by another country. You may be subject to complex informational filings related to foreign assets and accounts. In some cases, it may make sense to dispose of certain assets prior to triggering U.S. tax residency.
Froehling Anderson can help you remain compliant and help minimize double taxation that could arise between the U.S. and your host country, understand your tax filing requirements and to identify planning opportunities ahead of obtaining your green card.
