Although FATCA may have reduced US citizens’ options when opening offshore bank accounts, it’s always been perfectly legal – and possible – for US citizens to bank overseas. In fact, many national governments have taken it upon themselves to ensure that their banking systems are FATCA-compliant.
Do US citizens have to pay taxes if they live in another country?
Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live. However, you may qualify for certain foreign earned income exclusions and/or foreign income tax credits.
What makes an account a foreign financial account?
Generally, an account at a financial institution located outside the United States is a foreign financial account. Whether the account produced taxable income has no effect on whether the account is a “foreign financial account” for FBAR purposes.
How does FATCA help with foreign account tax compliance?
Financial institutions can use the FATCA registration system to manage their accounts. Financial institutions and host country tax authorities can transmit and exchange FATCA data with the United States. What form do I need to report my foreign financial assets?
Who is required to report foreign financial assets?
The reporting threshold is higher for certain individuals, including married taxpayers filing a joint annual income tax return and certain taxpayers living in a foreign country (see below). As of January 2013, only individuals are required to report their foreign financial assets.
What makes a foreign financial account a FBAR?
Generally, an account at a financial institution located outside the United States is a foreign financial account. Whether the account produced taxable income has no effect on whether the account is a “foreign financial account” for FBAR purposes. But, you don’t need to report foreign financial accounts that are: Correspondent/Nostro accounts,
