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Would some one explain what is FATCA? Why was it intreduced? What impact does it have on USC living abroad?

Foreign Account Tax Compliance Act,
Domestic & International Compliance
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Lisa Nason CPA, MST
FATCA stands for The Foreign Account Tax Compliance Act (FATCA) Under FATCA, U.S. taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS. This reporting will be made on Form 8938, which taxpayers attach to their federal income tax return. It was introduced in order to improve tax compliance involving foreign financial assets and offshore accounts. For US citizens living abroad, you woudl potentially need to report your foreign bank account or other foreign financial assets - assuming that you exceed the trheshold amounts required to file those forms.
Leave a Comment 214 weeks ago

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Question Owner
Great, thank you, now the questions are? if am a USC living in Dubai and I have a current Bank account in Dubai, why woud the IRS consider it as an offshore account? Secound any idea regarding the trheshold amount, I know to file your income tax the first $91,600 are exempt..
Reply 214 weeks ago
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Douglas Stransky
I believe my response to your original question should also answer your follow-up questions. If you would like to know more about FATCA, here's a link to the key provisions on the IRS website:
www.irs.gov/Businesses/Corporations/Summary-of-Key-FATCA-Provisions

You can also review the instructions to Form 8938 for the various thresholds for filing. Please keep in mind that FATCA reporting is in addition to any U.S. federal tax return, FBAR or other information return that you might have to file.
Reply 214 weeks ago
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Douglas Stransky
FATCA is legislation that was passed in the United States in 2010. FATCA is intended to prevent U.S. persons from evading U.S. federal income tax using financial accounts held outside of the United States. Although FATCA requires current reporting by U.S. persons, when FATCA is fully implemented, it will require non-U.S. financial institutions to enter into agreements with the IRS to report relevant information to the IRS regarding financial accounts held by identified U.S. persons. If a non-U.S. financial institution does not enter into an agreement with the IRS, the IRS will impose a 30% withholding tax on U.S. source payments (and potentially certain non-U.S. source payments no earlier than 2017) paid to the financial institution or their clients.
Leave a Comment 214 weeks ago

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Question Owner
Thank you so much, Form 8938 was very helpful.. Answered many questions for me and my clients.
Regards
Reply 214 weeks ago
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Chuck Heyde, CPA, CGMA
We actually did a huge write up on this.

www.gemms.us/foreign-financial-assets

We call it "Everything you wanted to know about FATCA but didn't know to ask..."

Please enjoy...
Leave a Comment 212 weeks ago



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