Guide to FBAR - January 2016
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The document serves as a guide for U.S. taxpayers, particularly non-resident Indians, on complying with FBAR (Foreign Bank Account Reporting) regulations. It outlines the definitions and requirements for FBAR filings, including deadlines, penalties for non-filing, and recent laws impacting taxpayers, such as the passport tax law. Additionally, it emphasizes the importance of seeking professional tax advice for managing international compliance and the complexities of double taxation treaties.
Guide to FBAR - January 2016
- 1. U.S. – India Tax Compliance Guide to FBAR Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. January 2016
- 2. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingWhat is FBAR ? FBAR stands for Foreign Bank Account Reporting There are a variety of reasons Non-Resident Indians may want to keep a bank account in India while they are living overseas. 2 types of Bank Accounts for Non-Resident Indians NRO Non-Resident Ordinary Deposits in Rupees only Minimum balance 75000 Rs For funds earned in India (rents, salary, etc.) RBI reporting required NRE Non-Resident External Deposits in any Currency Freely move funds in & out For funds sending to India (savings, gifts, expenses, etc) Exempt from India income tax
- 3. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingImportant Rules and Dates to Remember FBAR Filing Deadline - June 30th Extensions? NO. No extensions. Who has to file FBAR? All US Taxpayers with OffShore Accounts totaling $10,000 or more…. (2014 threshhold) United States Expatriate Income Tax Returns are due by June 15th FBAR form is also called FinCen Form 114 FinCen is short for: Financial Crimes Enforcement Network
- 4. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingPenalty for not Filing FBAR FBAR Filing Penalty: For not filing…. - 50% or more of each account balance - penalty: each account (not aggregate) Extensions? NO. No extensions. Despite stiff penalties, many people who should be filing FBAR forms are not doing so. Haven’t been filing FBAR? Check out the OVDP Offshore Voluntary Disclosure Program An opportunity for taxpayers with off-shore accounts to get current. Possible benefits are: Uniform penalty rates, avoid criminal prosecution, resolve the case with out additional audits
- 5. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingMore Penalties for not Filing FBAR FBAR Filing Penalty for WILLFULLY not filing? The greater of: - 50% account balance or $100,000 (after 2004) - penalty: each account (not aggregate) Extensions? NO. No extensions. What’s a Taxpayer to do? However, the U.S. taxes citizens, residents, and green-card holders where ever they are in the world. Some NRI’s consider leaving the country & US citizenship behind
- 6. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingThe “Passport” Tax Law – January 2016 New Law Ties Passports to IRS Debt: - As of January 2016 ‘seriouosly delinquent taxpayers’ owing more that $50,000 may find their passport suspended or revoked Tax Law H.R. 22, passed Dec. 4, 2015 Now tax rules reach even farther to cause travel problems for NRIs no matter where they are. Some NRI’s consider leaving the country & US citizenship behind
- 7. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingStreamlined – Limited Amnesty Program Began 2014 & still available Designed for U.S. Taxpayers (or Expatriates) who didn’t intend to evade U.S. Taxes by not filing FBAR. It’s an opportunity to not owe a penalty, as long as you’re filing 3 years of tax returns and paying the amount due. At the same time in 2014, penalties for intentional cheats were increased.
- 8. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingFATCA - Foreign Account Tax Compliance Act Passed by Congress in 2010 Requires foreign financial institutions to turn over information about U.S. account holders so the IRS can track taxpayer compliance. More than 77,000 banks and 70 countries comply with FATCA. Almost no foreign bank account is secret anymore.
- 9. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingDouble Taxation Treaties D T A A Double Taxation Avoidance Agreement DTAA applies where a taxpayer is a resident of one country, and has a source of income in another country (rent, pension, etc.) Treaty between US-India states that each country will follow sourcing rules to determine which country collects the tax. Treaty rules are complex and vary from country to country. Taxpayers with income from different countries should get professional tax advice.
- 10. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR FilingFiling U.S. Tax Returns can be Complicated Even returns that seem simple can be surprisingly complicated. Taxpayers with off-shore investments face many complicated rules because so often foreign accounts have been used to hide money. Foreign retirement, savings, and pension plans may not be tax exempt by the U.S. U.S. Taxpayers who own business abroad should definitely seek professional tax advice. Work with a CPA who understands international tax rules.
- 11. Disclaimer: The information contained herein is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional. Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com US-India Tax Compliance FBAR Filing The End Dave Banerjee, CPA 21860 Burbank Blvd, #150 Woodland Hills, CA. 91367 Ph: (818) 657-0288 | Fax: (818) 657-0299 Individual & Business Tax Returns | Small Business Accounting www.davebanerjee.com Dave Banerjee, CPA Foreign Tax Returns, Business Returns, Accounting Email: [email protected] Phone: (818) 657-0288