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Rocketman

U.S. Citizens - If you have $10K+ in a foreign bank, read this

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NOSOCALPINOY
It's not intentional on our part, but we just always happen to to be under the $10,000 mark within any calendar year due to our adequate monthly living expenses! So no, we do not worry about going over $10,000 within and or after a calender year. 

Screw FACTA and FBAR, we aren't doing anything wrong! Besides, it's our retirement money to spend and not theirs! We pay our taxes on time! 

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Majorsco

I don't worry about it because I keep my money, beyond my monthly needs plus a little contingency (well below the reporting requirement), in my US bank.  I didn't do that because of the new laws.  I did it because I don't trust the Philippine banking system.

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lopburi3

Not sure why this is an issue. Foreign currency accounts are not part of this reporting process. More specifically, peso accounts in the Philippines are not to be included in the amounts for the U.S. dollar accounts. Perhaps there is a need to know "income" from a peso account, but that is for tax purposes, not for foreign currency reporting. Apples and oranges.

Currency type does not matter - if you have more than what would equal 10k US Dollar worth (combined value of all accounts) at any time during the year it must be reported on FBAR.  This is not a new law and is now done on-line.

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Jawny

eidted

Edited by Jawny

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rfm010

I am certain that the foreign currency accounts are not part of the reporting process.

 

 

i do believe this is wrong and lopburi3's post above it is correct.  hope i can be shown wrong but it is the impression i came away with when i went through the reporting process.   jawny is correct in that this is only a reporting requirement and not an actual tax collection issue.  there are, however, substantial theoretical penalties for failing to report your foreign accounts.

special note:  to take this further, keep in mind that joint accounts are included.  for example, my wife has bank accounts that are solely for her income and savings, none of which has been taxable by the u.s. as she is not a u.s. citizen nor of resident status.  but my name is also on the account for convenience and that is enough to make it fall under the reporting requirements.

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Jawny

i do believe this is wrong and lopburi3's post above it is correct.  hope i can be shown wrong but it is the impression i came away with when i went through the reporting process.   jawny is correct in that this is only a reporting requirement and not an actual tax collection issue.  there are, however, substantial theoretical penalties for failing to report your foreign accounts.

special note:  to take this further, keep in mind that joint accounts are included.  for example, my wife has bank accounts that are solely for her income and savings, none of which has been taxable by the u.s. as she is not a u.s. citizen nor of resident status.  but my name is also on the account for convenience and that is enough to make it fall under the reporting requirements.

I have edited (deleted) my comments made previously.

 

I didn't want to join the chorus with me singing out of key.

 

I was struck by the substantial penalties for failing to report. Seemed pretty serious as to dollar amount as well as the criminal nature of the process. A bit like a search for modern day Al Capone wannabes.

 

For myself, I do an account management system where I make sure I get money taken out of accounts before the total adds to $10,000. Not particularly hard with my limited income.

 

I will search my files today and see if I can locate the pdf files I have covering this topic. I'll post them if I can locate them. This issue pops up every once in a while in the LinC and the responses go in typically the same way. A lot of misunderstandings about the reporting and the tax issues.

 

With regard to the issue of taxable income and spouses, that can be confusing since some spouses have their own income and it is not considered as taxable by the IRS. However, if a spouse is included on a joint tax return, then income needs to be factored in. To add to the confusion is the fact that Filipino banks typically take the taxes directly from the account on a regular basis. In effect, the account is taxed and paid to the Philippines.

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Monsoon

It is funny, I find that people with the least money make the biggest deal about the FBAR requirements. 

 

Not a big deal guys, unless you are sitting on millions of unreported earnings from ill gotten wealth. And even then it will take them a while to get around to you... 

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Cipro

Last I checked non-cash assets (gold bars in a safe deposit box for instance) were not subject to this but it might have changed. 

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lopburi3

 

 

A bit like a search for modern day Al Capone wannabes.

Indeed that is exactly why there is the FBAR law.  It has never been closely enforced for normal people as intended to be a "got ya" for crime figures after the fact.  But with new computers and on-line processing it has become something that everyone needs to be aware of as search for income will likely see increased attention given such things and the penalties are extreme.  It also covers any account you have signature authority over so yes if money is in a joint account it does need to be reported - but it may not have to have tax payments made unless taxable under laws.  The FBAR report is separate of tax requirements.  

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Jawny

I can't get the pdf file to load just now, but it is from the IRS webpage. The title of the document I have is "Internal Revenue Manual - 4.26.16 Report of Foreign Bank and Financial Accounts (FBAR). Mine is from 6/12/13.... May be a later version.

 

The part 4 is about the examining process. Pretty detailed.however, some useful definitions. Describes everything from what is a "person" to what is a "financial account". Worth reading if you're paranoid.

 

Interesting to note it is the LOCATION of the account which determines if it is "in a foreign country".

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throttleplate

i got a form sent to me from bdo last week,so i took form in and asked about it and she pointed out it only applies to people with 10,000 dollars or more in a account,i thought i needed to report that i just had a account no matter what amount it had in it.I didnt understand the wording but they did haha.I cant understand illongo english.

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rfm010

It is funny, I find that people with the least money make the biggest deal about the FBAR requirements.

 

 

fbar is a concern to me because when wife retires we plan on moving back to god's chosen land and i can see questions about compliance with tax law coming up during the wife's residency processing.  normally i might not come under irs scrutiny but i'd rather not have to "voluntarily" let them know that i've been dodging any requirements.

last thing i need is to have to explain to the wife why it is that the irs has sequestered her bank account. 

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Monsoon

fbar is a concern to me because when wife retires we plan on moving back to god's chosen land and i can see questions about compliance with tax law coming up during the wife's residency processing.  normally i might not come under irs scrutiny but i'd rather not have to "voluntarily" let them know that i've been dodging any requirements.

last thing i need is to have to explain to the wife why it is that the irs has sequestered her bank account. 

 

Just file an FBAR. I have about a dozen foreign bank accounts that I either own or am a signatory on and it took me maybe 20 mins to do.

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SkyMan
Interesting to note it is the LOCATION of the account which determines if it is "in a foreign country".

As opposed to????????????

Edited by SkyMan

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ft_chief

Last I checked non-cash assets (gold bars in a safe deposit box for instance) were not subject to this but it might have changed. 

 

That would fall under the FACTA law not FBAR. Most people get confused between the 2 different laws. 99% of retirees would not have to file under FACTA requirements.

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