You may have come to the United States in the last few years get a better job. You have enjoyed building a stronger financial future here, but you also still have some assets overseas. You have felt a bit overwhelmed when completing your U.S. tax returns though. You aren’t sure about reporting your foreign assets. What foreign assets do you need to disclose to the IRS?
Reporting foreign assets to the IRS
You are may need to report foreign assets to the IRS if you meet these requirements:
- You are a U.S. citizen.
- You are a resident alien for any part of the tax year.
- You are a nonresident alien who decides to be treated as a resident alien while filing a joint tax return.
- You are a nonresident alien who is a bone fide resident of American Samoa or Puerto Rico.
- You have a financial account managed by a foreign financial institution (not a foreign branch of a U.S. financial institution or a U.S. branch of a foreign financial institution).
- You hold any stock or securities that someone other an a U.S. person issued (including inherited investments).
- You hold interest in a foreign entity.
- You hold interest in any financial instrument or contract where the issuer or counterparty is not a U.S. person.
The IRS also has reporting thresholds you must meet in reporting your foreign assets to the IRS. These thresholds are the following:
- You are unmarried and your foreign assets are worth more than $50,000 on the last day of the year or more than $75,000 any time during the tax year.
- You are married and filing a joint return and your foreign assets are worth more than $100,000 on the last day of the year or more than $150,000 any time during the tax year.
- You are unmarried and filing a separate return and your foreign assets are worth more than $50,000 on the last day of the year or more than $75,000 any time during the tax year.
You also may need to report your foreign assets if you are a U.S. citizen living abroad. You don’t need to report any real estate property you hold overseas.
What if I haven’t reported foreign assets when I should have?
If you realize didn’t report foreign assets when you should have, you can file an amended tax return. If the IRS contacts you about not reporting foreign assets, you need to consult a tax attorney right away. A tax attorney can help you decide what your best options are and how to avoid any stiff tax penalties.