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Wondering if you need to disclose your foreign bank accounts with your IRS tax return? If you have foreign assets, it might be time to start working with your tax attorney.
You might be obligated to disclose these assets in an attachment to your tax return this year. And the process isn't exactly painless.
The Form 8938 Statement of Specified Foreign Financial Assets can take a whole day to complete, if not more.
Form 8938 is in addition to any foreign bank account reporting (FBAR) reporting that you may have to do on Form TD F 90-22.1.
Both forms are independent of one and other.
But we're not here to talk about FBAR today. The requirement to file the Form 8938 comes from a law called FATCA, or the Foreign Account Tax Compliance Act. On the form, you will have to provide detailed information on foreign financial accounts, including information on the income derived from the foreign accounts.
The filing requirements are determined by how much you have in "specified foreign assets."
Here's who needs to file Form 8938:
There are many other technicalities here. The amounts above refer to "specified foreign assets," as we've already mentioned. This can get tricky. Furthermore, determining whether you are a U.S. taxpayer "living abroad" for the purposes of this filing can also be tricky.
If you haven't filed this form yet and think you might need to, talk to a tax lawyer as soon as possible. The penalties are steep for failing to file this form.