IRS Now Provides Guidance on Foreign Financial Asset Reporting
The IRS has posted instructions and the new information reporting form that taxpayers will now use to report foreign financial assets. The new information reporting form applies for 2011 and beyond tax returns, filed beginning January 1, 2012 onwards.
IRS Form 8938, “Statement of Foreign Financial Assets”, is required to report the ownership of specified foreign assets when the total value of these specified foreign assets exceeds certain thresholds. For taxpayers living outside the United States, the thresholds are $200,000 on the last day of the year or $300,000 anytime during the year for single and married filing separately taxpayers, and $400,000 on the last day of the year or $600,000 at anytime during the year for taxpayers filing married filing jointly. For taxpayers living in the United States, the thresholds are $50,000 on the last day of the year or $75,000 anytime during the year for single and married filing separately taxpayers, and $100,000 on the last day of the year or $150,000 at anytime during the year for taxpayers filing married filing jointly.
In 2010, the filing requirement of IRS Form 8938 was enacted to increase the tax compliance for U.S. taxpayers who owned offshore financial accounts. IRS Form 8938 is attached to the taxpayer’s annual tax return which includes IRS Form 1040, IRS Form 1120, Form 1065, Form 1041, Form 1120-S, and Form 1040NR. Taxpayers who are required to file IRS Form 8938 but fail to file a complete and correct IRS Form 8938 by the due date (including extensions) of their annual tax return, may be subject to a $10 thousand penalty. After 90 days, if the taxpayer continues to fail to file Form 8938, an additional penalty of $10 thousand for each 30-day or part of the 30-day period may apply.
Taxpayer’s required to file IRS Form 8938 may still be required to file an FBAR (Report of Foreign Bank and Financial Accounts).
If you need Expert Income Tax Planning, please call Givner & Kaye at (310) 207-8008.
jmanlefty The long form is the original 1040. There are all kinds of speilmr 1040 s like the 1040EZ. Yes, the long form is okay. In fact, that’s actually the official form. The other 1040 s with letters behind it, are abbreviated forms for people that don’t have that complicated a return. When you itemize your deductions instead of taking the standard deduction , and when you have certain stock transactions etc. etc. etc. you have to attach these things the IRS calls Schedules. You have to use the long form (1040) for that kind of stuff. Not to fret.March 27, 2011 | 8:53 am