Having assets in offshore or foreign accounts is not unusual for many people living in Texas and other parts of the United States. The benefits of holding these accounts are attractive for many reasons, particularly when it comes to protecting wealth. However, it is necessary for individuals to report their foreign assets using the proper tax forms, or they risk facing serious penalties from the Internal Revenue Service.
Some individuals with foreign accounts must file an FBAR, or a report of foreign bank and financial accounts, but some also need to file Form 8938, which is a statement of specified foreign financial assets. United States citizens, including those living within the country, may need to file this form if they have foreign financial assets that meet or exceed the threshold for reporting. These thresholds are more than $75,000 at some point during the year or $50,000 on the final day of the year. These thresholds double for parties filing joint returns.
Important details to keep in mind relating to Form 8938 include:
- Parties who need to file this form should file it with the IRS along with their annual tax return.
- Failure to file this form when required could result in penalties.
- The initial penalty is $10,000 for failing to disclose the information, and an additional $10,000 penalty is applied every 30 days that the information is not disclosed, up to $60,000.
- It is possible for criminal charges to result.
Foreign assets and accounts often require extra attention when tax time comes. If any issues arise when handling these tax matters, Texas residents will certainly want to ensure that those issues are handled properly and that they are able to work toward a favorable outcome. Discussing these matters with experienced tax attorneys may benefit those with offshore accounts and assets held in other countries.