Download fbar fatca - GSTWC 大西雅圖台灣婦女會

• Foreign Bank Accounts
Reporting
• 2013 Tax Updates
• Open Questions
 Underreporting = 84% $376 billion
 Underpayment = 10% $46 billion
 Non-Filing = 6% $28 billion
FBAR
FATCA
 Required as part of Bank Act Since 1970s
 US taxpayer with foreign accounts have two
obligations:
1. answer “ Yes” on Form 1040, Schedule B
2. File Form TD F 90-22.1
 Required to be filed annually by 6/30
 Mail to Detroit Service Center or drop off to IRS
office
 No extensions
 Mailbox rule does not apply
 U.S. taxpayer
 U.S. person has a financial account in a foreign
country
 U.S. person has as financial interest in, or signature
of other authority over the financial account
 The aggregate account balance > $10,000 (USD) at
any time during the calendar year
Bank account
Security and stock account
 Criminal penalties for willful violation:
-- up to 5 years imprisonment and $250K fine
 Civil penalties
--non-willful violation : up to $10,000 for each
violation
--Willful violation: greater of $100K or 50% of the
balance in
the account at the time of violation
 Both Civil and criminal penalties can be imposed
 Form 2004 and 2009, increased to 145%
 FBAR related examinations increased 96%
 FBAR penalty assessments increased from $4.2
million
 2010 – increased to 173%
 2011 - increased to 184%
 “The FATCA is an important development in U.S.
efforts to improve tax compliance involving foreign
financial assets and offshore accounts.”
 FATCA was enacted in 2010
 U.S. taxpayer with specified foreign financial
assets that exceed thresholds must reports those
assets to IRS.
 Beginning in 2013, foreign financial institutions
will be requires to report directly to the U.S.
government information about financial
accounts held by U.S. taxpayers, or held by
foreign entities in which U.S. taxpayer hold a
substantial ownership interest
 File with U.S. income tax return
 You have an interest in specific foreign financil
assets
 The aggregate value of your specific foreign financial
assets in more than the reporting threshold that
applies to you.





Foreign bank accounts
Foreign mutual funds
Foreign hedge funds
Foreign private equity funds
Certain foreign insurance products
 Stock or securities issued by someone other than
U.S. person
 Any interest in a foreign entity
 Any Financial instrument or contract that has an
issuer that is other than a U.S. person
 Foreign pensions and deferred compensation plans
 Foreign trust and estates
 Unmarried taxpayer living in the U.S.
- $50,000 on the last day of year or $75,000 at any
time during the year
 Married taxpayers-MFJ
-$100,000 or $150,000
 Married taxpayers- MFS
-$50,000 or $75,000
 File with income tax return – Form 1040
 If you do not have to file an income tax for the tax
year, you do no need to file form 8938, even if the
value of your specified foreign assets is more than
the appropriate reporting threshold.
 May result $10,000 civil penalty + $10,000
continuation penalty for each 30 days period after
the taxpayer is notified by IRS (max $50K)
 Exception if failure is due to reasonable cause and
not willful neglect
 Criminal penalties may apply
American Taxpayer Relief Act of 2012
Filing Status
Married Individuals Filing Joint
Returns and Surviving
$20,000
Spouses
Heads of Households
$16,770
Unmarried Individuals/ Single
$10,000
Married Individuals Filing
Separate Returns
$10,000
65 years older or Blind
Additional $1,200 –MFJ
$1,500 - Single
Tax Rate
Married Filing Joint
10%
up to $17850
15%
$17,851- $72,500
25%
$72,501 - $146,400
28%
$146,401- $223,050
33%
$223,051 - $398,350
35%
$398,351 -$450,000
39.60%
over $450,000
**Single =39.6% over $225,000
Long term capital gain and
qualified dividend = 15% tax rate
Capital loss deduction = $3000
 American Opportunity Tax Credit – max $2500
 Tuition and Fee Deduction - $4000
 Extended for five years to 2017
 1/1/2014 all American must have health insurance
 Penalty




2014 is greater of $95 or 1% of household income
2015 is greater of $325 or 2% of household income
2016 is the greater of $695 or 2.5% of household income
Children = 50% of normal penalty up to $2250 for all
children