tax forms

FATCA Form 8938 Tax Filing Info

American expats living abroad in 2013 will have to file a new form with their taxes in 2013. FATCA is a new law aimed at Americans living abroad and foreign banks to cut down on tax evasion. It essentially will give the IRS a view in Americans foreign bank accounts and provide the IRS much need information for tax enforcement and will prevent tax evasion.

 

Information About FATCA Form 8938

However, this law presents a set of new compliance requirements for american expats who live abroad and who might have foreign bank accounts. According to the IRS, U.S. citizens, U.S. individual residents, and a very limited number of nonresident individuals who own certain foreign financial accounts or other offshore assets (specified foreign financial assets) must report those assets.

 

FATCA Form 8938 Tax Filing Info

  • American Taxpayers with a total value of specified foreign financial assets below a certain threshold do not have to file Form 8938 with their tax returns.
  • However, if the total value of their accounts is at or below $50,000 at the end of the tax year, there is no reporting requirement for the year, unless the total value was more than $75,000 at any time during the tax year
  • The threshold is higher for individuals who live outside the United States and certain other requirement.
  • Thresholds are different for married and single taxpayers

These Americans who must file FATCA Form 8938 should begin gathering information about their foreign bank accounts well before any tax return is due. Since the IRS will have foreign banks in compliance by 2015, the IRS will essentially know which taxpayers have not complied with FATCA

 

FATCA Reporting Requirements for Form 8938

The reporting requirement for Form 8938 is separate from the reporting requirement for the FinCEN Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”) (formerly TD F 90-22.1). An individual may have to file both forms and separate penalties may apply for failure to file each form. Again, since the IRS will have bank account details provided by the banks, they will eventually know which Americans have not properly filed the FBAR form.