When you’re US citizen, you may be required to report your non-US financial accounts to the FATCA. This is the Foreign Account Tax Compliance Act (FATCA) – an important development in US efforts to combat tax evasion by US persons holding accounts and other financial assets offshore.
The FATCA generally requires that foreign financial Institutions and certain other non-financial foreign entities report the foreign assets held by their US account holders or be subject to withholding on payments. Then, the HIRE Act also contains legislation requiring US persons to report,depending on the value, to their foreign financial accounts and foreign assets.
Under FATCA, certain US taxpayers holding financial assets outside the United States must report these assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. Reporting thresholds vary based on whether you file a joint income tax return or live abroad.
If you are single or file separately from your spouse, you must submit a Form 8938 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.
If you file jointly with your spouse, these thresholds double.
You are considered to live abroad if you are a US 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.
For more information, please visit the IRS FATCA page.