Looking for relief from tax paperwork?
One annoying thing for US citizens living overseas is the additional IRS reporting requirements.
However, things may be getting a little easier for some of us.
The recent HIRE Act added some new reporting requirements for people with certain types of assets being held outside the country. This is commonly known as the FATCA reporting. The IRS created Form 8938 for this.
Originally, you’d be required to do this additional reporting if you have more than US$ 50,000 in certain types of accounts overseas. However, the IRS released some updates the other days.
For people who are living overseas, the amount of money that triggers reporting is much higher than $50,000.
According to the release on the IRS website, if you are a married couple living overseas, you’ll only need to file Form 8938 (the FATCA reporting form) if your specified assets overseas total more than US$ 400,000 on the last day of the tax year, or more than US$ 600,000 on any day of the year. If you’re single, cut those amounts in half (US$ 200,000 on the last day of the year, or US$ 300,000 on any day of the year).
The requirements to be considered “living overseas” are the same as for the FEIE. If you have a bona fide residence overseas, or are physically outside of the country at least 330 days of the year, you are consider to be living overseas. You can read the complete FATCA reporting requirements here.
You also won’t need to file this form if you are not required to file an income tax form.
My personal opinion is that no government should have this as a requirement for any of their citizens. If you legally earned your money, you should be able to keep it anywhere you want. However, the reality is that this is something we need to deal with. The penalties for not filing a Form 8938 are expensive.
At least for now, it’s a little bit easier for many of us living overseas.
{ 3 comments… read them below or add one }
Pretty generous of USG to exempt some expats from filing FATCA, heh. Interesting how appending the letter T makes it a socialist term.
BTW, I just finished reading your eBook Moving Overseas: What You Need to Know Before You Go. Very informative and nicely done, wish I’d had the advantage of reading it before I expatriated!
Good post Scott.
I Tweeted it and posted a link on a forum that I visit. Keep up the good work.
Joe
Thanks Joe. It’s always nice to get a little bit of good news about taxes, for those of us already living overseas or planning on moving overseas.