nun

This is where whether things like Oyster cards are included in FBAR becomes important. If you are close to the $10k limit small balances on them might take you over. It's a mine field for the regular expatriate tax payer. Don't forget to include things like life insurance policies with cash value and personal pension plans

paulpur

is it a combination of accounts that range over $10k or any 1 account over 10k that needs reporting?
e.g , what if you have 2 accounts each with $9k in them, are you required to report? or is it only if 1 of the accounts goes over the 10k that needs reporting?

nun

If the sum of your foreign accounts goes over $10k you have to file FBAR. So two $9k accounts requires FBAR.

paulpur

thank you very much for the info
guess when i move back home i will just need to stuff the mattress LOL

robin1234

It's not like the FBAR is difficult to fill out, though. It's filing the taxes for both countries, if I return to the UK to live, that seems daunting (although once I get to see the forms as prepared for me by a tax professional, hopefully I'll see more clearly what the deal is.)

nun

+1 That's how I feel too. I'm comfortable with the US side of things, it's the UK self assessment that I have no clue about as I've never done that.

paulpur

thats very true Robin...probably just seems daunting , especially when in the UK , id never ever needed to worry about anything tax related, was always done through employer as PAYE , and now in the US, my wife usually sorts the tax returns through turbo tax....
although, when it comes to tax time next year i think we may have to consult with a tax specialist, perhaps not, i'll let the wife decide LOL

theOAP

I keep 2 sets of books (and no, not the illegal kind), one for 01 Jan. to 31 Dec. (US), and one 6 April to 5 April (UK). Bit of a pain, but it pays off when doing the tax returns. A lot.

Preparing the UK self assessment usually take at most one and a half hours. One hour for info gathering, and 20 to 30 minutes to fill in the self assessment with the foreign income pages. It's simple for me since all my income (worldwide) is declared. If you have ROTHs or other treaty exempt items, I assume it may be more complicated.

Preparing my US return usually takes 4 weeks of fairly steady work (this is not a joke). I can handle Excel fairly well (formulas in cells, etc.) and have prepared a sheet that calculates everything from the 1040 form itself to 1116, AMT, 1116AMT, etc. So I just plug in key figures, and Bob's your uncle. The problems arise with all the new legislation that arrives each year, and 2011 and 2012 will be bumper crops. Most of the time is spent researching, contacting help lines, and deciding how to handle the return for the year (what to include on which form, and how). To put this into context, before I retired, I could do the US return in a day or two.

My last FBAR was 6 pages, so not too bad. I estimate my Form 8938 for 2011 will be at least 20/25 pages long on its own (again, that's no joke)! I'm petitioning that printer ink and paper should be tax deductible without filing Sch. A, as well as the cost of shipping cartons and postage.

And before some smart a$$ asks, no, when your retired and claim the treaty, you can not use TurboTax or file electronically.

paulpur

oh noes, this doesnt inspire me at all theOAP lol, hopefully mines will be a bit easier and quicker when i do finally have to do UK and US taxes..might be a case of me getting a tax professional to do it for a year or 2 and then me learning properly what is needing done...all the tax jargon and crap gives me sore heads LOL

Giantaxe

Article from The Economist on some of the unintended consequences of FATCA. The comments at the end of the article are worth reading too:

http://www.economist.com/node/21540270

One of the comments has a link to "Americans Abroad" who are campaigning to get FATCA repealed. Ha ha, fat chance of that.

www.americansabroad.org

robin1234

I just looked at a copy of the Form 8938. I see from Pt. II, question 6 they actually ask you to specify the exchange rate used, and where you got it from! At last, they are gingerly entering the Real World!!

I think I'll print off a copy of the (draft) instructions and give it a read. I'm assuming that, with just interest on a few foreign bank accounts, this will be fairly simple for me. But, incrementally, yet more worry & bumf.

paulpur

im scared to think right now of all the forms i will need to do come tax time when i move back to the UK, theres the 1040,the 1116(i think lol) , the 8938 and the FBAR and thats me not even sure if theres more that i will need to do
never mind the fact that that is just the US side of things, there will also be the UK self assessment thing i believe......

lansbury

No need to guess, the IRS will publish the average exchange rate for the year for tax purposes. It comes out usually before mid February and can be found here, with rates going back to 2006. http://www.irs.gov/businesses/small/...206089,00.html

lansbury

If you can do the IRS return, the UK self assessment will be a doddle.

robin1234

As you say, that is the yearly average. For Form 8938, though, we are told to use rates from this table. http://www.fms.treas.gov/intn.html The instructions for Form 8938 emphasise that "You must use the foreign currency exchange rate on the last day of the tax year, .." so that is quite different from the yearly average rate..