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Understanding the Fbar Requirements Prior to Filing

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Simply put FBAR can be defined as a report that needs to be filled apart from the individual tax return filings.

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Understanding the Fbar Requirements Prior to Filing

  1. 1. Understanding the Fbar Requirements Prior to Filing LeadFormix Confidential
  2. 2. Simply put FBAR can be defined as a report that needs to be filled apart from the individual tax return filings. However, each and every individual needs to file the FBAR in case they happen to be a resident of U.S and also have a total balance that surpasses $10,000 in all their overseas and financial bank account. The last date for filing the FBAR form is on June 30th. These apart, other FBAR requirements are described below. Though FBAR to some looks like a simple bank account filing process, it has got its own critical aspects that are important to understand. Some include the following:- FBAR and Individual tax return are different processes FBAR is a process that is complementary to individual income tax return and needs to be filled in TD F 90-22.1 by an individual who has filled the Form 8938, 'Statement of Specified Foreign Financial Assets' along with the tax return. The reporting date stands to be on June 30th The last date for submitting FBAR form is June 30th. In comparison to the tax return that needs to be completed on April 15th, FBAR needs to be received by the Treasury by June 30th with no extension. This means that in case you finished filing up the FBAR on June 29th it is essential that you spend it through an overnight mail so that it can reach without fail on June 30th. However, in case a taxpayer finishes filling the form by June 30th then it is considered late. On the other hand, if you hold a foreign account, you will be having a reporting obligation even when the account has a zero taxable income. Even a single day’s high balance is considered in FBAR FBAR needs to be filled by the U.S citizens, residents and green card holders even if their total financial accounts goes beyond $10,000 at anytime in one year. This shows that if the total income of the account holder crosses this count even on a given day of the calendar, the FBAR rules are applicable to them. LeadFormix Confidential
  3. 3. However, the individuals that fail to file their FBAR have to witness penalties. They can also be subject to harsh penalties that can go up to an amount of USD 100,000, i.e. 50 percent of the account balance. This apart, there are criminal penalties that might also rise up to USD 250,000. Other than this, there is a scope of five years of imprisonment. In addition to that, the IRS can also be tracked down to 6 years and then take a review of an individual’s tax returns to trace the balances indicating FBAR. This aside, in order to avoid all penalties, it is important to resort to expert guidance from any expert tax planning agency on authentic FBAR filing. Read More About: Individual Tax Return Extension, The Tax Planning Guide 2013-2014, India Capital Gains Tax On Property, Foreign Bank Account Reporting Amnesty 2012 LeadFormix Confidential

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