FATCA stands for the Foreign Account Tax Compliance Act, which became law in March of 2010. FATCA’s objective is the reporting of foreign assets. According to the U.S. Internal Revenue Service (IRS), FATCA “generally requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on withholdable payments.”
In other words, U.S. citizens, U.S. individual residents, and a very limited number of non-resident individuals who own certain foreign accounts or other offshore assets must report these assets.
If the total asset value exceeds the appropriate reporting threshold, taxpayers must report information about certain foreign accounts and offshore assets on Form 8938 and attach it to their income tax return. If the taxpayer has a total value of or below $50,000 at the end of the tax year, then there is no reporting requirement for that year, unless the total value was more than $75,000 at any time during the tax year. The threshold is higher for individuals who live outside the U.S. and is different for married or single taxpayers.
Taxpayers who do not have to file an income tax return for the tax year do not have to file Form 8938, regardless of the value of their specified foreign financial assets. Penalties may apply for failure to file correctly.
It is worthwhile to note that foreign financial institutions may provide the IRS third-party information reporting about financial accounts, including the identity and certain financial information associated with an account, which they maintain offshore on behalf of U.S. individual account holders.
Learn more about FATCA on the IRS website.
Do you need assistance with your business case?
Elkhalil Law is here to help you with your business case. We offer in-person, over the phone, and Skype consultations. Contact us today so that we can discuss you case!
Office: (+1) 770-612-3499
WhatsApp: (+1) 678-900-6845
Follow our social accounts to stay up-to-date on the latest news!
Disclaimer: Nothing in relation to the enclosed information should be construed and or considered as legal advice for any individual, entity, case, or situation. The following information is prepared for advertisement use only. The information is intended ONLY to be general and should not be relied upon for any specific situation. For legal advice on your specific situation, we encourage you to consult an attorney experienced in the area of Immigration Law.