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US Reporting Requirements for Those with Foreign Assets

U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2013, may have a U.S. tax liability and a filing requirement in 2014.

The filing deadline is June 16, 2014, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. This represents an automatic two-month extension; however, to qualify taxpayers must attach a statement to their tax return explaining which of these two situations applies to their need for extended time to file beyond the normal April 15 filing due date. See U.S. Citizens and Resident Aliens Abroad for details.

Nonresident aliens who received income from U.S. sources in 2013 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 16 depending on sources of income. See Taxation of Nonresident Aliens on IRS.gov.

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to fill out and attach Schedule B to their tax return. Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets.

Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. See the instructions for this form for details.

Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2013 must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). This form replaces TD F 90-22.1, the FBAR form used in the past. It is due to the Treasury Department by June 30, 2014, must be filed electronically and is only available online through the BSA E-Filing System website. For details regarding the FBAR requirements, see Report of Foreign Bank and Financial Accounts (FBAR).

Any U.S. taxpayer here or abroad with tax questions can use the online IRS Tax Map and the International Tax Topic Index to get answers.

DISCLAIMER: This information is extracted with permission from IRS regulations and publications.  It is general in nature and the specifics of each taxpayer’s circumstances are different.  In addition, these regulation interpretations may be subject to change from year to year depending upon new tax legislation, reform and litigation, as well as IRS changes in interpretation of new and existing laws and court rulings.  We therefore are not responsible for the application of this general information to the specific circumstances of a reader unless we have been engaged as the reader’s tax preparer or consultant.

Is it time to get help for your tax return?  If so, you may make an appointment with one of our Directors of Audit and Tax Services by reference to the CONTACTS page above.  Standard rates and terms for service will apply.  New clients may be required to pay a retainer.

 

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