Do You Need to Report that Foreign Asset?
The Internal Revenue Service (IRS) expects United States citizens and resident aliens to report certain foreign assets. Individuals with foreign assets generally fit one of two categories: either they live and work abroad or live stateside but have foreign financial interests.
Tax obligations for those who live and work abroad
It is important to report foreign assets even if you reside abroad. Those who live in a foreign country but retain United States citizenship or dual citizenship are generally required to file income taxes with the IRS. In many cases, these individuals may qualify for tax benefits like the Foreign Earned Income exclusion or the Foreign Tax credit.
The income tax filing deadline for those who live abroad is a bit later than those who live within the United States. The deadline in these situations is June 15, 2018.
Reporting requirements for those who live in the United States but have foreign interests
The IRS requires reporting of certain foreign interests. An interest or authority over a foreign account that is valued at over $10,000 at any time during 2017 will generally require reporting. The Report of Foreign Bank and Financial Accounts (FBAR) will likely be required in this situation. This form shares the same deadline as the federal income tax return. File the report with the Financial Crimes Enforcement Network (FinCEN) by April 17, 2018.
Fortunately, this deadline is flexible. An automatic extension is given for those who fail to meet this deadline but file the report before October 15, 2018.
These are just some of the broad considerations to take into account when it comes to reporting foreign assets. It is wise to seek legal counsel to better ensure you are in full compliance with reporting requirements.
