I've only been living here since 2009, filing foreign income exclusion happily with my 1040 and 2555 forms with Taxact for 2009 and 2010.
Apparently I'm a big f-up because although I've heard of FBAR, I hadn't really looked into it or paid attention to what it is. I feel really stupid that I didn't realise I'm supposed to send ALL my bank information to the IRS for them to peruse.
Now I'm reading I can face fines of $10,000 for not filing the form on time. I am probably only liable for 2010 at the moment if I file 2011 correctly, but I honestly am feeling sick now. I can't even figure out how to input my bank interest earnings correctly on the Schedule B on my taxes because I don't have any Identification number from my Swiss bank for filing at the moment.
Is it time to give up and pay a bloody tax account here to do it for me? We recently got me "signing rights" on my Swiss husband's accts so I could pay him the money for our joint taxes for Switzerland... and now I'm alarmed that I am supposed to give all of his acct information to the IRS as well.
Is the IRS going to think I'm earning more money than my tax form says because of my husband's money on the accts? I'm scared now I'm going to get in trouble now despite trying to fill everything out correctly and file on time.
Ohhhh being an American abroad feels really horrible sometimes.
If 2010 was the first year you were required to file an FBAR filing, and provided you declared any interest earned overseas and paid the correct amount of tax, I would be inclined just to start filing the FBAR starting in 2011.
The FBAR is really designed to help prosecute major tax evasion and/or funding of terrorists. There is a huge level of non-compliance, but the IRS seem not to actively pursue unless they think you're deliberately hiding something.
Hmm, thank you. Yes... I've always earned under the threshold for taxes and my tax returns have always been $0 at the end. I believe I've always sent them my bank account interest slips from the end of the year too...
I just don't want to get slapped with a big fine because I failed to report an FBAR. I'm wondering if I should send one in for 2010 with a letter explaining my ignorance.
Going to read both those articles now! I'm still shaky on how I figure out which point of the year all my accounts were the highest altogether... but it looks like I need to figure out how to do the FBAR now.
As far as whether to report for 2010 or not, I stand by my previous advice -- if there was no tax liability due and you were close to the $10k threshold, I probably wouldn't bother. I would simply start filing from this year. The odds of being prosecuted for not filing under these circumstances are very, very low.
In terms of calculating the highest balance, you need to do this on a per-account basis. For some banks, like PostFinance, it's easy to get a report that shows your balance at the end of each day -- so it's a snap to find out the highest balance you had in that account during the year.
For other accounts, you simply have to look at the highest amount shown at the end of the month/quarter/whatever the frequency of statements you get. The IRS say that you don't need to work out the highest balance on a daily basis -- just the highest balance that's reported on the statement.
For the IRS/Treasury Dept, this is about orders of magnitude. So if you're reporting an account for $5k, they don't see that there's a big risk of serious tax evasion. If you're reporting an account holding $5m, you can rest assured that they'll be looking to see if corresponding tax has been paid on that amount.
If you've just crossed the threshold for needing to file FBAR, it's unlikely you need to file FATCA as well -- but it's worth checking, bearing in mind that any pension funds also count towards the thresholds.
Well, for 2009 with the stronger USD in the exchange rate it was probably very near the FBAR threshold, but in 2010 I definitely crossed that border from diligent savings. So I will think strongly about filing for 2010 to cover myself. Like you say, the odds are probably very unlikely that they would ever find out, but I suppose this is the law and I'm supposed to be doing it.
Thankfully I am nowhere near the requirements to file FATCA! (Though I wish I had that kind of dough!)
More questions! In regards to filling out the FBAR and including my non-filing non-resident alien husband's joint accounts that I have access to, do I need to include his 3a pension?
I can see all our debit/savings accounts online as well as his 3a, but it says it's restricted and I don't think I can do anything with the money. Is it weird to put that on the FBAR?
I feel like they are going to think all his Swiss money is my money and try and tax me on it somehow. I just hate the idea of giving them all this information of his!
How recently did you get signing rights? As in, during 2012? If so, you probably don't need to worry about it for 2011. I don't know exactly what signing rights means - is your name on the account?
Ahm... his name is still on the account but I can take money in and out of it. (But not the 3a). But they are all in my bank login screen now.
We applied for the joint accounts back in 2011, but it took ages to get it done because I'm an American so they had to transfer all the accounts over to the "American dpt". Now I can't remember if it was 2011 or 2012 already. Safer to just put them on there??
Yeh, it looks like signature authority counts. But might be worth looking through your records to see if it was 2011 or 2012. *I am not a tax professional!*
Looking at my husband's bank records... looks like we requested the authority at the end of November. Feck. We'll definitely be separating our accounts again this year! Wish I never did joined them, but I wanted access to our account we save taxes in.
Which accounts need to be reported on FBAR ? All my foreign accounts or only foreign accounts that had a balance above $10,000
I have several foreign accounts, but only my Swiss account has had a balance above $10,000 during the year. The other accounts have had a balance of less than a $1,000 on a monthly basis. Do I need to report my Swiss accounts or all accounts ?
I am concerned, since IRS has significantly raised penalties for not filing FBAR. In the past, my accountant has only listed my main (account which I receive salary)foreign bank account on FBAR.
ALL accounts that you have authority over must be listed, even if the money going into the account is not coming from you (joint for example). If you have one account with $10,000 and another with £1, you still have to list both. If you have one account with €7000 and another with £1500, you still have to list both.
Thank you for the clarification. One more question, last year I reported only 2 accounts, if I report 6 accounts this year, will that increase the chances of getting an audit from IRS ?
Is it safer for me to continue only listing the same 2 accounts I have listed in past years ?
It is not safe to deliberately exclude accounts that you should be listing. You need to amend your previous FBARs, attaching a note explaining why you are changing them. For this year, fill it out properly with all accounts that you have.
I didn't realize I even needed to fill out the darn FBAR, but I did my best to fill out the forms properly for the last two years and send them in late. For 2011 I did everything like one normally should and sent it in. There are 3-4 more accounts on my 2011 FBAR because my husband and I combined our accounts that year (big mistake!) and I listed them because it's necessary. If that's a flag to the IRS because I've increased my accounts from '10 to '11, oh well. As long as you are doing everything to the best of your knowledge and not trying to hide things, I hope they can't penalize us too much.
This year my husbands accounts are his again! I don't want to touch them if it means having to report them on the FBAR. Maybe the IRS will come asking where those accounts have gone and why I'm not reporting on them. Who knows! I personally don't think they should give a crap about someone earning as little as me when they've got bigger fish to fry.
The 10k rule is an aggregate rule. So, your non US accounts exceed 10k on aggregate then you list ALL accounts, even if max balance was $1.
If you had 5 accounts with max balances of $1,500 you would not need to file.
As per above, if you have non wilfully neglected to report certain accounts, file amended. The IRS will not penalise you providing income from those accounts was properly reported.