Contact UsI need to get up to speed on FATCA and what it means to me and my family? We are primarily residing between Canada and the United States. Any suggestions of an easy way to understand what is happening now and what we should be looking out for on FATCA?
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John Stancil
FATCA was enacted in order to combat U. S. tax evasion by taxpayers holding investments in foreign accounts. This is somewhat controversial, as it raises privacy issues, especially for those having dual citizenship. It requires foreign banks to report these accounts to the IRS.There are three components to the Act.
The first section requires foreign financial institutions (FFI) to undertake identification procedures in an effort to discover any U. S. account holders. U. S. account holders are defined as U. S. persons or foreign entities with substantial U. S. ownership. For these accounts, the FFI is to report annually to the IRS the balances, receipts, and withdrawals from these accounts. The IRS may require participating FFI’s to withhold and pay to the IRS 30 percent of certain payments to U. S. persons.
The second section focuses on filing thresholds. It can be as low as $50,000 for a single filer living in the United States up to a balance of $400,000 on the last day of the year or $600,000 at any time during the year for a married couple filing jointly and living outside the United States
The determination of living or not living in the United States is made by applying the bona fide residence or physical presence test applicable to the foreign earned income exclusion.
The third section of FATCA closes a tax loophole that investors had used to avoid paying taxes on dividends by converting them into non-taxable dividend equivalents.
The third section of FATCA closes a tax loophole that investors had used to avoid paying taxes on dividends by converting them into non-taxable dividend equivalents.
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428 weeks ago
The first section requires foreign financial institutions (FFI) to undertake identification procedures in an effort to discover any U. S. account holders. U. S. account holders are defined as U. S. persons or foreign entities with substantial U. S. ownership. For these accounts, the FFI is to report annually to the IRS the balances, receipts, and withdrawals from these accounts. The IRS may require participating FFI’s to withhold and pay to the IRS 30 percent of certain payments to U. S. persons.
The second section focuses on filing thresholds. It can be as low as $50,000 for a single filer living in the United States up to a balance of $400,000 on the last day of the year or $600,000 at any time during the year for a married couple filing jointly and living outside the United States
The determination of living or not living in the United States is made by applying the bona fide residence or physical presence test applicable to the foreign earned income exclusion.
The third section of FATCA closes a tax loophole that investors had used to avoid paying taxes on dividends by converting them into non-taxable dividend equivalents.
The third section of FATCA closes a tax loophole that investors had used to avoid paying taxes on dividends by converting them into non-taxable dividend equivalents.