Expat Tax Blog

Top Five Reasons You Should Start Reporting Your Foreign Bank Accounts

Written by Gregory A. Fallon on Tuesday, 14 July 2015.

US citizens who have neglected to report foreign accounts they own or have signing authority over may be facing stiff penalties.  Many of my clients want to comply with this policy but have concerns about prior years they failed to report.  Should you file late FBARs or just start reporting them going forward? If they file a current year FBAR, will the IRS flag them for audits in prior years?  One thing I tell them for certain is that continuing to not report their foreign accounts is a bad idea.  The end game for not reporting your foreign accounts is costly and stressful. Here are the top five reasons you should start reporting you foreign bank accounts.

The IRS will find out

Recent legislation called FACTA may be the strongest weapon the IRS has been armed with in years. This law allows the IRS to enforce a debilitating withholding tax on foreign banks that do not report their US depositors. The results speak for themselves.  Even the strict bank secrecy laws in Switzerland are proving to be no match for FACTA.  Almost all the major overseas banks are reporting their US depositors to the IRS.  Even though the IRS receives information on millions of foreign accounts owned by US citizens, thanks to current technology, they can easily check this information against their databases.  Even if the IRS runs into technical complications processing this information, they will inevitably work them out and become more efficient as time goes on.

IRS Tries to Make Life Easier for Expats

on Tuesday, 14 July 2015.

The IRS has released an International Tax Map.  Hopefully it will make answering your tax  questions easier. If you cannot find an answer contact us for a free consultation.
IRS International Tax Map 

We provide secure and professional US tax services for a flat fee.   Contact Us .

 Foreign Earned Income Exclusion 2013

You may be able to exclude up to $97,600 of your foreign earned income in 2013.

You cannot exclude more than the smaller of:
  • $97,600, or
  • Your foreign earned income for the tax year minus your foreign housing exclusion.
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