Tax Day may mean double duty if you have foreign assets

The Internal Revenue Service (IRS) recently reminded taxpayers that even those living abroad likely need to file paperwork this tax season. In some cases, the government may require taxpayers file additional paperwork.

What else does the Treasury Department need? The agency may also require an additional form, the Report of Foreign Bank and Financial Accounts (FBAR). This form is due on April 15th, 2019.

Who needs to file an FBAR? The government requires the FBAR for any United States citizens and resident aliens with a foreign financial account or signature authority over an account that at any time during 2018 had an aggregate value over $10,000.

How is this form different than income tax returns? The IRS accounts for the presence of foreign assets on income tax returns by requiring tax payers disclose the presence of any qualifying accounts or property. If the foreign asset is over the $10,000 requirement noted above, the government also requires that taxpayer file a separate FBAR.

Another difference: who gets the paperwork. Taxpayers file the FBAR with the Financial Crimes Enforcement Network (FinCEN) while income tax returns are filed with the IRS.

Is there an automatic extension? The IRS generally grants an automatic six-month extension for those who fail to file a required FBAR. However, the extension generally comes with the retirement at the taxpayer file the form online.

What if I still need to report foreign assets? Those who have yet to report foreign assets to the IRS or Treasury Department have options. Those with foreign assets are wise to seek legal counsel to discuss these options.

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