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Foreign Account Tax Compliance Act (FATCA)

FATCA will also require certain foreign financial institutions to report directly to the IRS information about financial accounts held by U.S. taxpayers or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. The reporting institutions will include not only banks, but also other financial institutions, such as investment entities, brokers, and certain insurance companies. Some non-financial foreign entities will also have to report certain of their U.S. owners.
FATCA (form 8938) is due with your tax returns.

Frequently Asked Questions (FAQ)

  • Q. Who Must File an FATCA form 8938?

    A. If you have more than $200,000 of specified foreign financial assets at the end of the year and you live abroad; or more than $50,000, if you live in the United States. These thresholds double when you file your returns married filing jointly. You are considered to live abroad if you are a U.S. citizen whose tax home is in a foreign country and you have been present in a foreign country or countries for at least 330 days out of a consecutive 12-month period.

  • Q. What is included in FATCA form 8938?

    A. Specified foreign financial assets such as Foreign Pensions, Foreign Stockholdings, Foreign Partnership Interests, Foreign Financial Accounts, Foreign-issued Life Insurance, Foreign mutual funds etc.

  • Q. What is not included in FATCA form 8938?

    A. Foreign Real Estate held directly, Foreign Currency held directly, Precious Metals held directly, Social Security- type program benefits provided by a foreign government etc.

  • Q. Can I file for FATCA extension?

    A. Yes if you have filed for an extension for your tax returns then FATCA form 8938 also gets an extension.

  • Q. What happens if an account holder is required to file an FATCA and fails to do so?

    A. Penalties are up to $10,000 for failure to disclose and an additional $10,000 for each 30 days of non-filing after IRS notice of a failure to disclose, for a potential maximum penalty of $60,000; criminal penalties may also apply.

  • Q. I am not a US Citizen or Green card holder do I have to file FATCA form 8938?

    A. Yes Specified individuals, which include U.S citizens, resident aliens, and certain non-resident aliens that have an interest in specified foreign financial assets and meet the reporting threshold.

  • Q. How do I file FATCA?

    A. FATCA form 8938 needs to be included with your tax returns.

  • Q. I am filing FBAR do I still need to file FATCA?

    A. Yes, you may have to file both FBAR and FATCA as they both have different requirements. FATCA does not replace or otherwise affect your obligation to file form 114 (FBAR).

  • Q. Is there any overlap between FBAR and FATCA?

    A. There is a large amount of overlap between the FBAR and FATCA reporting requirements but not all of the terminology and definitions are the same, resulting in substantial confusion. The majority of people who require FATCA compliance will also require FBAR, but many FBAR filers do not have to file FATCA.

  • Q. What is the difference between FBAR and FATCA?

    A. The primary difference between FBAR and FATCA is that the Form 114 is an information return that is reported to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), while the FATCA Form(s) 8938 are additional scheduled items individually reported within the Form 1040.

  • A. Detailed comparison between FATCA and FBAR is provided by the IRS website .

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