Preparing FBARs | Report of Foreign Bank & Financial Accounts
report of foreign bank and financial accounts (fbar)
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).
Those required to file an FBAR who fail to properly file a complete and correct FBAR may be subject to a civil penalty not to exceed $10,000 per violation for non-willful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100,00 or 50% of the balance in the account at the time of the violation, for each violation.
Who Must File
United States persons are required to file an FBAR if: ...
Contact me (Nick) to see if you are required to file an FBAR or FinCen.
Common Mistakes When Preparing an FBAR & FinCen
1. Failure to Understand Who Is Considered a United States Person
A common error is to not include U.S. tax residents, non-U.S. citizens who pass the green card test or substantial presence test as a U.S. person subject to the FBAR filing requirements.
2. Not Understanding the Filing Requirements for Joint Accounts
Excluding joint accounts where the sole purpose of the ownership is for convenience. This is a common occurrence when elderly parents add their children to their account.
3. Failure to Understand the FBAR Filing Threshold Requirements
Another common mistake is to mistakenly assume that a filing requirement is triggered only when the total aggregate balance exceeds $10,000 at year-end (December 31). The filing requirement is based on the aggregate value at any time during the calendar year.
4. Failure to Disclose Business Accounts
Business accounts for which you have a greater than 50% ownership of the total voting power or if you have a signature authority need to be reported, are of neglected often by taxpayers who fail to disclose these accounts.
5. Failure to Disclose All Types of Foreign Financial Accounts
It is commonly mistaken that only regular checking and savings accounts requre disclosure and not retirement accounts, investments accounts, life insurance accounts with an account value, etc.
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Available for all taxpayers in every state and all Expatriates living abroad.
CONTACT NICHOLAS HARTNEY, EA
Areas of Practice
expat tax preparation
Foreign earned income and housing exclusions for both federal and state income tax returns. Foreign bank account reporting (FBARs), Statement of Specified Foreign Financial Assets, Tax Treaties, Application for IRS Individual Taxpayer Identification Number,etc.
business tax debt representation
We will file a power of attorney with the IRS and State Taxing Authority to negotiate a hold on all enforcement action such as bank and account receivable levies while we work on an appropriate resolution including Installment Agreements, Company Restructuring, Penalty Abatements, Offer in Compromises, and Currently Not Collectible Status. We will also advise you if bankruptcy is an option.
irs and state tax debt representation
We will file a power of attorney with the IRS and State Taxing Authorities to negotiate an appropriate resolution for back tax debt including Installment Agreements, Penalty Abatements, Offer in Compromises, Innocent Spouse Requests, and Currently Not Collectible Status. We will also advise you if bankruptcy is a option.
new business entity formation
We will educate you of the pros and cons of organizing an Limited Liability Company versus a Corporation, S-Corp., Limited Partnership, etc. and assist in the formation of the entity of your choosing.
previous years tax returns
We will prepare your previous years tax returns to bring you back into compliance with the IRS and State.
business tax return preparation
Whether you have a sole proprietorship with a Schedule C or a 1120 Corporate return we will prepare any business return.
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