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The FBAR and FATCA: what’s the difference? (Part 2 of 3)

In part one of this series, we discussed the FBAR and if you need to include it in your individual tax return.

In this blog we’ll review The FATCA—Foreign Account Tax Compliance Act—and whether or not it applies to your tax filing situation. Taxpayers required to file include specified individuals with an interest in specified foreign financial assets exceeding the applicable reporting threshold.

Let’s cut that definition into more digestible pieces.

Specified individuals include U.S. citizens and resident (as well as some non-resident) aliens. As of now, this filing requirement applies only to individuals, but don’t be surprised if companies get included in the future.

Those with an interest are owners. Remember, if you own a trust or disregarded entity, you have direct interest in anything held by that trust or entity. Although that entity isn’t required to file the appropriate form (Form 8938) with its tax return, you must include its assets in your calculations.

Specified foreign financial assets include financial accounts, and also foreign investment assets not held in an account, including:

  • stocks,
  • securities,
  • interest in foreign entities, and
  • instruments or contracts held for investment by non-U.S. issuers or counterparties.

The reporting thresholds for FATCA differ from FBAR and vary according to your tax filing status.  Owners of holdings exceeding the following amounts must file Form 8938 with their tax returns:

Filing Status and Location Held on Dec. 31 Held at Any Time During the Year
Single or Married Filing Separately (MFS) and living in the U.S.  

$50,000

 

$75,000

Married and living in the U.S. $100,000 $150,000
Single or MFS and living abroad $200,000 $300,000
Married and living abroad $400,000 $600,000

If you file for a tax extension, the deadline for the FATCA filing extends as well.

Now, you may see why some people must file both FBAR and FATCA.  Some overlap between the two exists, but the focus is different. We’ll explain the differences further in part three of this series next week.

In the meantime, if you seek help with any tax-related or accounting issues, such as payroll and bookkeeping, contact the Patrick & Robinson CPAs team for assistance: (904) 396-5400 or Office@CPAsite.com.

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