The IRS announced the guidelines for reporting US$150,000 of overseas property

The IRS announced the guidelines for reporting US$150,000 of overseas property (Alberta News) The IRS recently announced that it will launch a new tax form, Form 8938 (F...

The IRS announced the guidelines for reporting US$150,000 of overseas property (Alberta News) The IRS recently announced that it will launch a new tax form, Form 8938 (Form 8938), which is used to report designated foreign financial assets (Statement of Specified Foreign Financial Assets). Taxpayers will use this new tax form starting from the 2011 tax year. No matter where they live and work, U.S. citizens or those with dual citizenship of the United States and other countries need to report to the IRS every year. In Form 8938, taxpayers must fill in the specific types and amounts of designated foreign assets or foreign accounts. Taxpayers must clarify whether they meet the new IRS regulations and need to file taxes, because they will face serious penalties if they fail to report. The law requiring the completion of Form 8938 was enacted in 2010 to enable U.S. taxpayers with property abroad to pay taxes in accordance with the law. Taxpayers using Form 8938 can be U.S. citizens and residents, non-residents who choose to file jointly as a couple, or certain non-residents living in the United States. Not everyone who has assets abroad needs to file Form 8938. They are required to file only if the total value exceeds a certain value (threshold). For example, couples filing jointly in the United States generally do not need to file Form 8938 unless their total foreign assets exceed $100,000 on the last day of the tax year, or exceed $150,000 on any day during the tax year. The minimum is higher for taxpayers living abroad. For example, a couple filing jointly who lives abroad is required to file Form 8938 if the value of their foreign assets exceeds $400,000 on the last day of the tax year, or exceeds $600,000 on any day during the tax year. The instructions for completing Form 8938 explain the minimum value to be reported, what constitutes a designated foreign asset, how to determine the total value of the underlying assets, what assets are exempt, and what information must be provided. Individuals who are not required to file an income tax return will not need to complete Form 8938. Form 8938 does not replace or affect the taxpayer's obligation to file a Report of Foreign Bank and Financial Accounts (FBAR). For more FBAR information, please visit the FBAR page on the irs.gov website. Failure to file Form 8938 may result in a $10,000 penalty. Failure to file after receiving an IRS notice can result in additional penalties of up to $50,000. Penalties for any understatement of undisclosed taxable assets can be up to 40% of the assets. Instructions for completing Form 8938, as well as the implementation of this new foreign asset reporting requirement, and other information to help taxpayers determine whether they need to file Form 8938, can be found on the FATCA page on irs.gov.