Don't Forget to File Your FBAR
May 25th 2011 14:09
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FBAR filing for Americans Overseas
When I first began to ponder how to file my US Income tax returns from abroad I searched the IRS websites and other websites related to Americans living abroad. As I had stated in a previous post I could not find any information regarding tax filing for a person in my situation. Finally I managed to file my simple tax return and breathed a sigh of relief that the unagreeable task was over for this year. I was wrong.
While surfing the internet for voting procedures from abroad I stumbled upon some interesting information on the American Citizens Abroad website. It was something called FBAR. "What the hell is FBAR", I thought. Well FBAR stands for Foreign Bank Account Reporting and it is required of ALL Americans living abroad who have a total of $10,000 in a foreign bank, even if it's for only for a very short period of time. From my understanding of the requirements you have to report all banks account that add up to $10,000. These would include checking accounts, savings accounts and any account where the holder may have some sort of signatory relationship.
When figuring out the information to report, you have to convert the foreign money units into US dollars and you must report the amount in the account on the day when it was the highest. The FBAR must be reported to the US Department of the Treasury by June 30th. It is not to be included with your federal income tax forms. I understand that the penalties for not reporting can be extremely severe. Needless to say, when I discovered this requirement I promptly gathered the information on my meager bank accounts and sent it off to Uncle Sam. I believe that the government's reasoning for this is to catch income tax evaders, terrorists or money launderers. As usual with these types of regulations many of the little guys are terrorized in order to get the millionaire and billionaire tax evaders.
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