The Foreign Account Tax Compliance Act (FATCA) forms an essential part of the U.S. efforts to combat tax evasion by U.S. persons holding accounts and other financial assets offshore. You should first know that if you are not required to file a tax return, you do not need to file Form 8938.
Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. The requirement to file and report under FATCA is in addition to the FBAR filing on FinCEN Form 114. The FBAR is filed with the US treasury while FATCA-Form 8938 is filed with the IRS.
The Foreign Account Tax Compliance Act (FATCA) reporting thresholds vary based on whether you:
- File a joint income tax return, or
- Live abroad.
For Taxpayers living abroad, you must file a Form 8938 if you must file an income tax return and:
- You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year. These thresholds apply even if only one spouse resides abroad.
- You are not a married person filing a joint income tax return and the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year.
Taxpayers living in the United States, you must file Form 8938 if you must file an income tax return and:
- You are unmarried and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.
- You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.
- You are married filing separate income tax returns and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.
Hiring an licensed lawyer who specializes in expat tax law is one of the best investments you can make to ensure that you are legally compliant with all the pertinent U.S. laws and requisites, and most importantly, only licensed attorneys can protect your conversations and documentation under Confidentiality, because they are protected by the Attorney-Client Privilege. As a licensed Attorney I’m well-versed in the procedural and substantive tax rules and laws necessary to successfully represent clients involved in IRS tax filing procedures, and FATCA compliance.
So don't wait any longer and start your process today: Book a legal consultation to discuss your case, and understand your options to become FATCA Compliant.
