Having or operating one or more foreign accounts can pose a number of legal problems for individual who is not familiar about filing taxes for these types of sensitive accounts. No matter for what reasons, an expat hold assets with foreign accounts, US taxation in Singapore are an area of serious concern that taxpayers should know in order to avoid hefty penalties. As an expat your priority when filing taxes for foreign accounts is to ensure that you remain compliant with tax regulations that may apply to you. After all, receiving any surprise tax liability or audit notice from the Internal Revenue Service (IRS) due to your unawareness about foreign bank account taxes can cost you heavier.
For better tax support, it is always advised to avoid taking any sort of risk and prefer to hire the best US taxation services in Singapore to remain compliant with foreign financial account reporting abroad. US tax expert recognizes the complexity as well as legal implications comprised with foreign account reporting requirements and helps to manage your taxes. This post is dedicated to discussing how to file taxes if you have a foreign bank account.
Unavoidable Reasons For Filing Taxes If Own A Foreign Bank Account
It is a must for US expats having money or assets in one or more foreign bank accounts to be aware of the tax liabilities of these accounts. For tax computation purposes, money or assets held in foreign accounts will show different tax liabilities than a regular account opened by a US expat in a financial institution. This is simply because the American government taxes its citizens based on income that is earned within and outside the foreign country. So, you need the back support of the American tax service in Singapore to understand how the foreign account taxes could affect your foreign finances. If you ignore your tax liability over your foreign earned income, there are chances that you could be subject to heft penalties directed by the IRS or can even be charged with a criminal offense.
To know the detail about how to file taxes for a foreign bank account, continue reading and consult with an experienced US tax professional in Singapore to help you stay compliant with foreign tax regulations.
Who needs to report the details of their foreign bank account?
All US citizens living abroad and having a foreign bank account are required to provide the details of their foreign bank account to the US treasury department, even if the account didn’t produce taxable income. According to the rules, the following US persons need to file Foreign Bank and Account Report (FBAR):
- US citizens who receive a financial interest in their bank account, brokerage account, mutual fund, or other similar types of financial accounts.
- The aggregate balance of all the foreign accounts of US citizens should be more than $ 10,000 at any time during the calendar year.
It is important to note that having a foreign bank account in any US territory will make the US citizen liable to the IRS for taxes. Moreover, if a single foreign bank account is in the name of multiple individuals, each person needs to report the details of the account while filing their taxes. If you are unsure about how to file and compute FBAR, instead of gaining the knowledge you should hire the American tax service in Singapore for your taxation needs and support. Hiring a tax expert for looking over the foreign bank account reporting could help you avoid tax penalties that may result from errors or failure to file eligible taxes associated with a foreign bank account.