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The next filing deadline: foreign assets

Tax day – the annual deadline for federal income tax filing - was yesterday, April 15. Could there really be another filing deadline coming up so soon?

The answer is yes. The IRS recently issued a reminder to U.S. taxpayers with foreign assets that the filing deadline for income from those assets is June 16.

In this post, we will discuss this upcoming deadline and the requirement to report worldwide income.

As we discussed in our March 18 post, the Foreign Account Tax Compliance Act (FATCA) has greatly complicated the question of offshore tax compliance.

Even without FATCA, however, understanding the requirements for properly reporting foreign assets can be challenging.

For example, many people have heard of the so-called FBAR form. FBAR stands for Report of Foreign Bank and Financial Accounts. It is also referred to as FinCEN Form 114.

But there is also a different form that involves overseas assets. This is Form 8938, the Statement of Specified Foreign Financial Assets.

If you are uncertain about the differences between these forms and what your filing obligations are, it makes sense to talk with a tax attorney.

Keep in mind also that it isn’t only U.S. citizens with income from foreign assets who face the June 16 filing deadline. This deadline also applies to resident aliens.

Indeed, it may even apply to nonresident aliens, depending on where their income came from.

Another factor that affects the applicability of the various reporting requirements is the amount of the assets in question. The threshold value for the requirement to file an FBAR form is generally an amount that exceeded $10,000 at any time during the tax year.

Source: IRS.gov, "IRS Reminds Those with Foreign Assets of U.S. Tax Obligations," April 11, 2014

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