Are you up-to-date on your foreign asset reporting? The question may make you think of the box you checked to indicate you had a foreign account on the Schedule B you filed with your 2014 federal income tax form. Or maybe you thought of “Form 8938, Statement of Specified Foreign Financial Assets,” which is also filed with your Form 1040.
But even if you completed those two forms, you might still have to complete another report — one that is not mailed with your tax return, is due by June 30, can only be filed electronically, and has no extension.
The “Report of Foreign Bank and Financial Accounts,” or FBAR, is filed with the Department of Treasury when you have certain interests in, or authority over, foreign financial accounts. Generally, the filing requirement is triggered when the aggregate value of your foreign accounts exceeds $10,000 at any time during the year. Notice that the value of your accounts is what matters, not the amount of income you receive from the accounts. You may be required to file an FBAR even if you earn no income from your foreign financial accounts.
Reportable items include savings, checking, and time deposits, as well as brokerage and option accounts. Some life insurance policies and mutual funds are also reportable under FBAR rules.
Give us a call if you have any foreign accounts. We’ll help you keep up with your reporting obligations.
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