Expats: don’t forget that you are required to report your foreign bank accounts annually

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Credit WSJ

Who Must File an Foreign Bank Account Report (FBAR)

Many foreigners living overseas are not aware that they have to file an annual report to the U.S. Treasury (not IRS) if they have more that $10,000 in overseas accounts.  United States persons are required to file an FBAR if:

*** The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States

***The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

The FBAR is not filed with the filer’s federal income tax return. The granting, by the IRS, of an extension to file federal income tax returns does not extend the due date for filing an FBAR. You may not request an extension for filing the FBAR. The FBAR must be received by the IRS on or before June 30 of the year following the calendar year being reported. File by mailing the FBAR to:

United States Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621.

The penalty can be steep  if you don’t file it may cost you 40 to 70% of the funds in your overseas accounts plus attorney’s fees .

Download the form http://www.irs.gov/pub/irs-pdf/f90221.pdf

FAQS: http://www.irs.gov/businesses/small/article/0,,id=210244,00.html

Excellent Wall Street Journal Article: http://online.wsj.com/article/SB10001424052748703643104576291003798203320.html

The new Foreign Account Tax Compliance Act (FACTA) seeks the require foreign banks to report the holdings of United States citizens, just in case those citizens “forget” to file their FBARS. More information on implementation of the FACTA in this Financial Times article: http://www.ft.com/intl/cms/s/0/fe2f7bae-ae49-11e0-844e-00144feabdc0.html#axzz1Rq1Sn91d

Comments (6) Write a comment

  1. Here is one thing for sure,

    If you got over 10,000 dollars, I repeat. 10,000 dollars in any foreign bank account or more then you have to report it. I personally check that ruling, and it only covers anything over 10,000 dollars. Then you have to reported.

    Don’t assumed what the local bank is saying; their interpretation is inflated and overrated. A simple international agreement between two nations is extremely over exercised with other local rules. It is all crapping more the jungle..

    Research it yourself and read it. Don’t assumed their correctness. Again I’m not worry about their madness, my bank is in the states and not the Philippines. I live on my ATM,


  2. This I will said:

    Leave your money in the USA banks!

    Get a debit card/visa card from your bank in the USA, to withdraw your money via your LOCAL ATM.

    2- Open a savings account locally in your name, ( preferably BPI Family savings) just to transfer internationally your money to yourself, if you have too.

    3- I rather withdraw the amount required to pay my bills, food what ever you got to pay off monthly from my bank in the USA and pay the local bank fee for only 200 pesos for any international supported ATM withdrawals.

    I prefer not to keep my money in some foreign bank.



    • David, a little over five years ago we made five year term deposits at a rural bank (paying 8%) no tax, and at a savings bank (paying 7.5%). It was a risk because the banks could have failed, but fortunately they did not. It worked out very well for us at a time when U.S. banks were paying minimal interest. Even though the five year term deposits were free of Philippine taxes, we did have to report the interest and pay taxes to the IRS. And yes, we have to file FBARs.

      When the peso falls we will sell the pesos, buy dollars and send them back to the U.S. The big Philippine commercial banks held up better than U.S. banks, but I wonder if there is a bubble in the Philippines. Condos are going up everywhere and the roads are clogged with $30,000 SUVs. Then there is the recent election, so yes, have your savings in the U.S. and be prepared for anything.


      • There is a bubble already, their banks loan rates do not meet their nation wide personal ear income. The reasons that appears that some banks held better is because of the amount of dollar reserve was bought. Not only the local peso, bought dollars, but Chinese currency, Taiwan, Korean and euros. but that bonanza is draining fast with excessive government bank loans. Their economy is a false economy of hopes as long they maintain 60/40 laws the will not be a steady economy. plus their concept of an economy is to borrow more and more money and just paid the minimum interest to the loaners. this add up in billions or maybe trillions of pesos in indebtedness, again their economy is not healthy.


  3. Bob and Carol,
    Would like to know what if the foreign acct or Philippine acct is in my name?it was not a joint acct but still the money came from our joint acct over here in states,from wells fargo acct and from investment acct here in united states?we still need to report the money like $10,000 or more from the Philippine acct only in my name?


    • Some of the rules are complicated but if it’s a foreign account owned or controlled by an American citizen it must be reported as should any interest income be reported on your U.S. federal tax return.


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