The United States Internal Revenue Service has at long last posted to its website the instructions and form for reporting non-U.S. (foreign) financial assets under section 6038D of the Internal Revenue Code. This new Form applies from January 1, 2011 for tax returns filed from January 1, 2012 onwards.
Form 8938, "Statement of Foreign Financial Assets", is used to report the ownership of specified foreign financial assets.
The reporting thresholds requiring filing for the 7 million U.S. taxpayers living outside of the United States are:
• Single taxpayers/married filing separately: $200,000 on the last day of the year or $300,000 anytime during the year.
• Married filing jointly living abroad: $400,000 on the last day of the year or $600,000 at anytime during the year.
The limits requiring filing for taxpayers living within the United States are:
• Single taxpayers/married filing separately: $50,000 on the last day of the year or $75,000 anytime during the year.
• Married filing jointly: $100,000 on the last day of the year or $150,000 at anytime during the year.
• Married filing jointly: $100,000 on the last day of the year or $150,000 at anytime during the year.
This new form will add several hundred pages of additional information reporting to U.S. tax returns for millions of individuals.
The value of all pension plans will be reported annually, the value of every investment, every partnership, every insurance policy, every PayPal account - even online gambling accounts and accounts held as funeral plans or to give to the grandchildren when they are old enough will have to be disclosed. Valuing all these assets alone will make completing every U.S. tax return hugely more time consuming.
Read more at: Tax Times blog
