Tax Returns
#1
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Tax Returns
Ok here goes.
I have been in the US for about 10 years on a GC, first few years was not working so claimed as a dependent on in laws tax returns. Then started working and filing jointly. Thought I was doing everything to the T till week or two ago.
I found out about FBAR and reporting of income on tax returns. When I first got here, I was not working so parents would put in money into account at home and I would withdraw it here. I never considered it income.
So for the last 5 years or bit more maybe, I have had accounts with over $10000 in them altogether (all money from parents).I have just found out that I also have had some savings/shares/portfolio/passbook savings in the amount of 20 -25 thousand pounds. Can't give details as I don't know them yet, they are handled by parents. From what I understand, I am only signatory on some of them.
FBAR not filed and not reported in tax returns as was completely not aware. I know, I probably should have known better, but it was a truthfully honest mistake.
Spoke to a CPA and he advised the streamlined route. All I want to be is complaint.Any recommendations?
I have been in the US for about 10 years on a GC, first few years was not working so claimed as a dependent on in laws tax returns. Then started working and filing jointly. Thought I was doing everything to the T till week or two ago.
I found out about FBAR and reporting of income on tax returns. When I first got here, I was not working so parents would put in money into account at home and I would withdraw it here. I never considered it income.
So for the last 5 years or bit more maybe, I have had accounts with over $10000 in them altogether (all money from parents).I have just found out that I also have had some savings/shares/portfolio/passbook savings in the amount of 20 -25 thousand pounds. Can't give details as I don't know them yet, they are handled by parents. From what I understand, I am only signatory on some of them.
FBAR not filed and not reported in tax returns as was completely not aware. I know, I probably should have known better, but it was a truthfully honest mistake.
Spoke to a CPA and he advised the streamlined route. All I want to be is complaint.Any recommendations?
#2
Re: Tax Returns
Money gifted to you is not income. The donor is responsible for paying any tax.
Get a full accounting of the amounts, types and ownership of these accounts.
Get a full accounting of the amounts, types and ownership of these accounts.
#3
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Re: Tax Returns
Also, I read that the statue of limitations for the IRS is 3 years I read, except when more than 25% of gross income is not reported. So as far as my uk accounts are concerned, what is considered income? Is it the amount held in them or the interest gained from them? So for example, if I make $40000 here as gross adjusted income, and my bank account in the UK holds $20,000, would that be considered over the 25%, or would it be the interest from these accounts that is considered income?
#4
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Re: Tax Returns
Yeah trying to get. A list of them. Even though it's guft money, it needed to be reported on my US tax return ?
Also, I read that the statue of limitations for the IRS is 3 years I read, except when more than 25% of gross income is not reported. So as far as my uk accounts are concerned, what is considered income? Is it the amount held in them or the interest gained from them? So for example, if I make $40000 here as gross adjusted income, and my bank account in the UK holds $20,000, would that be considered over the 25%, or would it be the interest from these accounts that is considered income?
Also, I read that the statue of limitations for the IRS is 3 years I read, except when more than 25% of gross income is not reported. So as far as my uk accounts are concerned, what is considered income? Is it the amount held in them or the interest gained from them? So for example, if I make $40000 here as gross adjusted income, and my bank account in the UK holds $20,000, would that be considered over the 25%, or would it be the interest from these accounts that is considered income?
If you held $20,000 in a UK bank account then all you have to report on your tax return is any interest it paid out during the year.
The FBAR issue is another matter and a different department of the Treasury to the IRS. You should be completing an online form each year that you have held accounts totaling more than $10,000 during the year. This is just a report, no payments made but the penalties for not reporting foreign accounts are very high.
The stocks and shares are another issue, one I haven't had to deal with so I'll let others comment on that.
#5
Re: Tax Returns
Yeah trying to get. A list of them. Even though it's guft money, it needed to be reported on my US tax return ?
Also, I read that the statue of limitations for the IRS is 3 years I read, except when more than 25% of gross income is not reported. So as far as my uk accounts are concerned, what is considered income? Is it the amount held in them or the interest gained from them? So for example, if I make $40000 here as gross adjusted income, and my bank account in the UK holds $20,000, would that be considered over the 25%, or would it be the interest from these accounts that is considered income?
Also, I read that the statue of limitations for the IRS is 3 years I read, except when more than 25% of gross income is not reported. So as far as my uk accounts are concerned, what is considered income? Is it the amount held in them or the interest gained from them? So for example, if I make $40000 here as gross adjusted income, and my bank account in the UK holds $20,000, would that be considered over the 25%, or would it be the interest from these accounts that is considered income?
For FBAR the entire amount of any foreign accounts that you own are counted.
#6
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Re: Tax Returns
So what are my options now? Do I go the streamlined route? Do I hire a CPA or a Tax lawyer or do it myself? All very new and confusing.
#7
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Re: Tax Returns
Then, strategise about compliance and amended returns for prior years. Get other opinions before going streamlined route...
#8
Re: Tax Returns
Don't do anything precipitately. As a priority, prepare and submit your 2016 taxes and FBAR. You don't have a huge amount of time, but still several weeks.
Then, strategise about compliance and amended returns for prior years. Get other opinions before going streamlined route...
Then, strategise about compliance and amended returns for prior years. Get other opinions before going streamlined route...
#9
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Re: Tax Returns
I spoke to a CPA who says he has been doing this for years. He says to take take the streamlined option and he says that he would file tax return for the last 3 years and submit fbar for last 6. However, his recommendation is to file an extension for this year, submit all previous tax returns and fbars, and once they are in the system, submit the tax return and fbar for this year. This is sort of opposite of what you've both have nentioned. Thoughts?
#10
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Re: Tax Returns
I would speak to an attorney who can instruct a CPA under a Kovel letter. This is a potentially serious issue with failure to file FBARs, 8938s and 3520s and possibly PFIC income. Remember, the IRS may not believe you knew nothing. How were the accounts opened without your signature & without your identity being checked by financial institutions?
#11
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Re: Tax Returns
I would speak to an attorney who can instruct a CPA under a Kovel letter. This is a potentially serious issue with failure to file FBARs, 8938s and 3520s and possibly PFIC income. Remember, the IRS may not believe you knew nothing. How were the accounts opened without your signature & without your identity being checked by financial institutions?
#12
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Re: Tax Returns
So I found out....that I have about 30,000 in investments. Stocks I guess. Is that PFIC?
Also, about 6000 in National Savings account.
I am married filing jointly. That still puts me under the $75,000 reporting requirement?
Ugh. What do I do?????
Also, about 6000 in National Savings account.
I am married filing jointly. That still puts me under the $75,000 reporting requirement?
Ugh. What do I do?????
#13
Re: Tax Returns
Whatever your tax situation it will benefit you to understand how your money is invested.
#15
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Re: Tax Returns
If you can withdraw money or make other changes to your accounts without your parents written permission then you have signature authority.