Need some clarity on filing status - US tax returns - help, please ;)
Oct 29th 2011, 8:39 pm
#16
BE Forum Addict
Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: Need some clarity on filing status - US tax returns - help, please ;)
I am devastated. What a pain in the a.., what a pain, what a pain. Aaaaaaaaah... I can just imagine the endless paperwork this can generate.
And I can be considered relatively poor too - but still may be implicated as per what you write. Not there's any considerable money just pennies most of the time, it's just that my life is messy.
So may I please ask some more clarifying questions - perhaps dumb ones:
1)Your last post, where you write "There is another question here which may not be as obvious". I don't understand why that Q becomes a Q if the requirements to report are as per what you write in the post one above.
2)You wrote if the aggregate is over $10, 000 even if for one day. I know you wrote it - but - really? Even if the balance was much lower but for a day or two was above?
3)Are there some banks or locations which the IRS is likely to get info from sooner or easier?
4)My name is on a non EU country bank account together with my mum. This is the bank account which her lessees pay rent. (My mum is renting out her apartment) Since she is internet and telephone banking illiterate illiterate and elderly she put my name on the account so I can track whether the rent has been paid etc. I do not use/do not take out any of that money. Should I not be worried since this is non EU or should I get my name removed pronto?
5)I think this is an unfair question but : What do you think the likelihood is that the my world imploding scenario would happen?
6)Aren't the authorities likely to go after the big fish first and leave folks like me alone?
7) Regardless if the aggregate was under or over $10,000 and was not reported, but the money did not earn any interest, and let's say theoretically does not raise US tax implications, are there still any fees/penalties that the IRS can claim?
8)The $10,000 amount. Is there some background or context for the $10,000 figure?
9)How many years is one supposed to go back when reporting?
10)What about property in the UK? If one has a property with a mortgage on it, that raises no income and that no UK income tax is due. What the US reporting requirements?
THANKS!!!
And I can be considered relatively poor too - but still may be implicated as per what you write. Not there's any considerable money just pennies most of the time, it's just that my life is messy.
So may I please ask some more clarifying questions - perhaps dumb ones:
1)Your last post, where you write "There is another question here which may not be as obvious". I don't understand why that Q becomes a Q if the requirements to report are as per what you write in the post one above.
2)You wrote if the aggregate is over $10, 000 even if for one day. I know you wrote it - but - really? Even if the balance was much lower but for a day or two was above?
3)Are there some banks or locations which the IRS is likely to get info from sooner or easier?
4)My name is on a non EU country bank account together with my mum. This is the bank account which her lessees pay rent. (My mum is renting out her apartment) Since she is internet and telephone banking illiterate illiterate and elderly she put my name on the account so I can track whether the rent has been paid etc. I do not use/do not take out any of that money. Should I not be worried since this is non EU or should I get my name removed pronto?
5)I think this is an unfair question but : What do you think the likelihood is that the my world imploding scenario would happen?
6)Aren't the authorities likely to go after the big fish first and leave folks like me alone?
7) Regardless if the aggregate was under or over $10,000 and was not reported, but the money did not earn any interest, and let's say theoretically does not raise US tax implications, are there still any fees/penalties that the IRS can claim?
8)The $10,000 amount. Is there some background or context for the $10,000 figure?
9)How many years is one supposed to go back when reporting?
10)What about property in the UK? If one has a property with a mortgage on it, that raises no income and that no UK income tax is due. What the US reporting requirements?
THANKS!!!
1) You are asking me to attach rational and common sense to IRS reporting. I can't do that. I believe it is to alert taxpayers that they may have to file an FBAR, and alert the IRS to expect an FBAR.
2) Really. Honest.
3) Probably, but only the IRS knows.
4) If it's a foreign bank account (to the US), and your name is on it, then it is a part of your FBAR calculations. As long as you file an FBAR declaring your involvement, it is not a problem to keep it. If your name was not on it, and as a result you would not have to file future FBAR's, then you may want to consider the options. But this only applies to the future. You can not remove your name from past requirements. If your name on the account allows you to transact funds in the account by use of your signature (even if you never do), it is subject to FBAR reporting.
5) Quite honestly, no one knows. But the chances may be reduced if you identify the error to the IRS, instead of the IRS 'discovering' the error and notifying you.
6) They are certainly going after the big fish, and it's reported they have hired 400 extra agents to do that. Those 400 agents will be looking at all foreign accounts to find the big fish, and the small fish become 'collateral damage'.
7) If undeclared 1040 interest creates/increases tax due, then there would be interest and penalties on that amount. If, after re-calculation of 1040, no tax/additional tax is due, then there are no 1040 interest or penalties.
But FBAR is a different situation, and penalties can be levied for failure to file, independent of what the situation is on 1040. (Although having filed accurate 1040 returns for the years involved, including the declaration of all reportable interest on foreign accounts, will help.)
8) No. It's a number Congress came up with.
9) Six.
10) As I understand it, you only report income arising from it on 1040, offset by any UK tax paid. There may be allowable deductions on the property. Foreign accounts relating to the property are subject to FBAR reporting. If you profit from the mortgage (borrow more than you pay back, which is possible due to currency fluctuations), you declare CGT. CGT may apply if you sell the property. If the mortgage is in a trust (or is in an entity), you may have FBAR reporting. But, I could be wrong.
It's tempting to crawl under the covers and hope this all goes away. If you find you are delinquent in FBAR filing, I would urge you to contact a professional accountant/tax advisor. Regardless of the 'urban legends' on IRS inefficiencies, the IRS is not playing games on this one.
As proposed for 2011 tax year returns, if you have an aggregate of $50,000 in foreign accounts, you will have to file Form 8938 (FATCA) with your 1040, in addition to FBAR. An equal sized pain.
My previous disclaimers apply.
Nov 1st 2011, 4:52 pm
#17
North Carolina/UK
Joined: Oct 2011
Location: Bristol, UK
Posts: 4
Re: Need some clarity on filing status - US tax returns - help, please ;)
They are only interested in the W2, which is the US equivalent of the P60. Since you don't have those, you can't send them. This is where the form falls down a little and it becomes unclear what to do, because you are using the same form as everyone else inside the US also uses for taxes. They are designed with US residents in mind.
If they want any more info from you, don't worry, they'll ask for it.
If they want any more info from you, don't worry, they'll ask for it.
