Recently the FBAR (Foreign Bank Account Report) and FATCA (Foreign Account Tax Compliance Act) filing requirements have generated quite a bit of controversy, as they pertain to the recent IRS crackdown on financial assets in overseas accounts. FATCA in particular has caused some uproar since going into effect in March 2010, as foreign financial institutions now have to report on American clients' accounts, causing some banks to turn away new US citizen clients or closing accounts currently held by US Citizens, to avoid the high cost of compliance.
The end of the year is the perfect time to align your US expat tax strategies.
It's that time again, as we close out another year, to review some end of the year tax hacks that can still be used to save you money. As you may already know, many of the tax strategies you employ must be done in the same tax year as they will be claimed. That is exactly why, with some of these strategies, you must act quickly to receive the benefit. And remember, you should always consult your Bright!Tax CPA or financial expert before making these decisions. But this list gives you a good place to start ...
Robert Wood - If you have a bank account anywhere outside the US, starting in 2015, chances are you will receive a letter saying that your bank must hand over the details of any American accounts, including yours. The letters vary with the country and with individual institutions. But the overall message is that the IRS is about to get your information.
As unnerving as this message is, FATCA is here, and ignoring your offshore accounts isn’t wise. You might well think that your accounts are not big enough to be noticed. But that is a dangerous game of chance and isn’t worth the risk. And indeed, for most people, the cure isn’t likely to be terribly painful.
“FATCA was created in part because of the fear of the United States government that the globalization of finance would give far more people the opportunity to hide their money. It was becoming very clear that it wasn't going to be just the very wealthy, but that it could really be the middle class and upper-middle class that could start moving income offshore.” Richard Harvey, Villanova Tax Law Professor, FATCA Co-author.
Cincinnati Startup assisting 7 million US expats worldwide lifts anchor in NYC, scouts international sites for new HQ.
New York, NY -- Though it had been in the works for some time, just this summer, the US Treasury Department unleashed a regulatory tsunami upon US citizens living and working abroad, the Foreign Asset Tax Compliance Act (FATCA). Uncle Sam and President Obama haven’t exactly spelled out “FATCAT”, but they’re only one letter off. And though their initial interest was to target the 1 percent with significant quiet offshore holdings, the average American expat has, unfortunately, been caught in the cross-hairs ...
Bowdeya Tweh, Cincinnati Enquirer
The growing complexity of financial disclosures of American citizens living abroad could be a boon for a Covington native's business.
Entrepreneur Greg Dewald launched Bright!Tax, a cloud-based, U.S. income tax preparation firm, in 2010. But now, the company's founder and chief executive is looking to expand the operation and open new office space in Europe or Asia, reflecting the global reach of the business.
Dewald said Bright!Tax employs 10 certified public accountants, but in the next few years, he wants to grow that number to 50. Bright!Tax has a data center in New York City, but the company and its associates all work and interact virtually. In a few years, Bright!Tax has grown to work with clients in 100 countries, Dewald said. The business is targeting the seven million U.S. citizens that live or work abroad but have to abide by federal tax rules that require Americans to file tax returns each year.
Ella Jameson - America; land of the free, home of the brave. For years the US has been seen as the land of opportunity, the country where dreams come true. But for how much longer? There are an estimated 7 million Americans living abroad and the number is only increasing -- over 150,000 Americans departed the country last year. It isn't just that they're leaving, either -- more people than ever before are choosing to renounce their US citizenship.
In the first three months of 2013 679 American citizens chose to turn in their US passports, the highest number for more than 15 years. There was surprise at this high number, but more shock was to come during the last quarter of 2013 when a staggering 1,130 US citizens opted to renounce their citizenship. This is the second highest quarterly number ever, and 1,115 more than the same period just four years ago.
So what's causing so many Americans to leave home with so little hesitance? Predictably, the leading factors are financial, but monetary reasons are not the exclusive cause.
Sophia Yan - As they crisscross the globe, IRS rules require expat American pilots to record exactly how long they're flying over the U.S., foreign countries and international waters. Once they land, the pilots have to track exactly when they're working, and when they're off the clock.
Here's why: If they ever face an IRS audit, the pilots will have to prove -- using flight plans or other documents -- exactly how much money they've earned in each jurisdiction, on land or in the air.
IRS Finally Gets It Right - This Is The Penalty-Free Path Forward American Late Filers Have Been Waiting For
Big Data and an ever aggressive approach by the IRS toward ferreting out Americans living abroad who are not current with their US tax filing has, so far, not yielded the results that the US government hoped for. With a tax system that is based largely upon voluntary compliance, the United States wields a big stick, and yet they realize that in reality a carrot may yield a much better result. The big stick in this circumstance is FATCA, the Foreign Asset Tax Compliance Act, which so far has signed on 77 thousand banks worldwide and 70 countries to report to the US where Americans reside and what accounts they hold. The carrot, on the other hand is the New Streamlined Procedure ...
Robert W. Wood - An astounding 77,000 banks and financial institutions—even some in Russia—have registered under FATCA—the Foreign Account Tax Compliance Act. America’s global tax law requires foreign banks to reveal American accounts holding over $50,000. Non-compliant institutions could be frozen out of U.S. markets, so everyone is complying. The fact that 77,000 banks have registered and some 70 countries are providing government help to the IRS means almost no foreign account is secret.