FBAR and FATCA Compliance Services
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Effortless Compliance for Your Foreign Accounts
FBAR Overview
The Foreign Bank Account Report (FBAR) mandates that U.S. individuals with foreign financial accounts totaling over $10,000 must report these accounts annually using FinCEN Form 114. This includes a variety of accounts, such as bank accounts, brokerage accounts, and specific foreign retirement plans.
FATCA Overview
The Foreign Account Tax Compliance Act (FATCA) requires U.S. taxpayers to disclose certain foreign financial assets on Form 8938 when their value exceeds designated thresholds. Additionally, FATCA obligates foreign financial institutions to report U.S. account holders to the IRS.
FBAR Compliance
Protect Your Assets with Confidence
- Who Must File: U.S. persons need to file an FBAR if their combined foreign account value surpasses $10,000 at any time during the year. The submission deadline is April 15, with an automatic extension available until October 15.
- Consequences of Non-Compliance: Failing to comply can result in hefty penalties, including fines of up to $10,000 for non-willful violations and significantly higher penalties for willful offenses, potentially reaching 50% of the account balance.
FATCA Compliance
Accurate Reporting for Peace of Mind
- Who Must Report: U.S. taxpayers are required to submit Form 8938 if their foreign financial assets exceed $50,000 ($100,000 for married couples) at the end of the year, or $75,000 ($150,000 for joint filers) at any point during the year.
- Consequences of Non-Compliance: Not filing can lead to a $10,000 penalty, along with additional fines for continued failure to report. Foreign financial institutions that do not comply risk a 30% withholding tax on U.S. income.
FBAR Filing Guidelines
If you’re a U.S. citizen or resident with foreign financial accounts, it’s essential to adhere to FBAR filing regulations. You must file an FBAR if the total value of your foreign accounts exceeds a specific threshold during the year, covering various account types such as bank accounts, brokerage accounts, and certain foreign retirement plans. The FBAR is due annually by mid-April, with the option to extend the deadline to October. To avoid severe penalties, keep accurate records of all foreign accounts for a smooth reporting experience.
FATCA Filing Guidelines
Under FATCA, U.S. taxpayers must report their foreign financial assets. If these assets exceed established thresholds at year-end or at any time during the year, you are required to submit Form 8938 along with your tax return. This form provides critical details about your foreign accounts and assets. To avoid penalties, ensure you gather all necessary documentation, including account statements and proof of ownership, to meet your reporting obligations effectively.
Why Choose FinFlow?
At FinFlow, we prioritize your financial compliance and success. Our dedicated team combines expertise with a commitment to exceptional service, helping you navigate the complexities of FBAR and FATCA requirements confidently.
Common Challenges and Solutions
Overcome Hurdles, Ensure Compliance
- Missed Deadlines: Utilize IRS streamlined filing options to reduce penalties.
- Asset Valuation Issues: Ensure precise reporting by using accurate currency conversions and consistent asset valuations.
- Unreported Accounts: Conduct regular reviews of your foreign holdings to prevent oversight.
Legal Considerations
- Voluntary Disclosure: Consider engaging with IRS disclosure programs to minimize penalties, but consult legal counsel to maintain attorney-client privilege.
- Treaties and Legal Risks: Be aware of international treaties that impact reporting requirements and understand the potential legal consequences of willful non-compliance.