FATCA Act or the Foreign Account Tax Compliance Act is a tax law that makes American citizens file any foreign account holdings they may have.
What Is The FATCA Act?
This act taxes US citizens on their foreign account holdings, regardless of whether they reside in the States or not. Failure to do so leads to heavy penalization. It was passed in 2010 during Obama’s office in an attempt to stream more revenue through taxes. This act was also passed to avoid tax evasion. Having offshore holdings is legal but according to US law, not reporting and paying taxes on them is considered illegal as US taxes all citizens globally.
What Do You Need To Report Under FATCA Act?
The foreign assets that need to be reported under this act are:
- Foreign pensions
- Foreign stockholdings
- Foreign partnership interests
- Foreign financial accounts
- Foreign mutual funds
- Foreign hedge funds
Note: Your foreign home does not fall under this Act.
What Forms Do You Need To Fill Out?
The IRS requires you to fill out many forms. Some of them are:
- Form 8938: This form is for taxpayers living abroad.
- Form 8938: This form is also applicable for taxpayers living in the States.
What Happens If You Don’t Comply?
According to FATCA act, If someone does not comply with this form, they are subject to penalties. The IRS penalises non complying taxpayers with a fine of $10000 and an additional fine of $5000 if they do not respond to an audit.
How A Professional Tax Preparer Can Help?
Our Professional Tax Preparer at AATCA are highly trained to help you with all your tax requirements. We can guide you through the for filling process and help you be a responsible citizen as well as save on various expenses. For more information, contact us in Atlanta, GA at +1 770-280-1082.
Contact Professional Tax Preparation Atlanta Services.