Australian Superannuation and form 3520 and FBAR

[chestnutt 10]

Hello All,

I began working in the US in January 2015, and just filed a joint tax return with my husband (we are both living in the US, I am a conditional permanent resident).

I am from Australia, and every time I go to research my tax obligations I seem to run into some other complicated form I need to fill out. I understand I need to file the FBAR form declaring my bank acccounts, that is pretty straight forward, but I am running into lots of problems trying to figure out where my Australian Superannuation (retirement) accounts fit in.

It looks like I need to fill out form 3520, which seems like an extremely complicated form. Does anyone out there have any experience with US tax obligations while having superannuation retirement accounts in Australia? I am hesitant to try to find a tax professional that would be very knowledgeable about this, it seems like a very specific issue (expensive!)

I would greatly appreciate any help, it's driving me crazy!

Thank you

[Nich-Nick 3,353]

I don't know anything about Australia but if it it a retirement or pension type fund maybe this will help.

If you are receiving money from the fund, it would be reportable on a US tax return just like taxable income from Social Security retirement, pensions, or distributions from IRAs. The taxable portion would be dependent on reading details about taxation of pensions.

If you have an account overseas that is held in your name waiting for you to reach a certain age, then It is reportable on Form 8938 aka FATCA if it meets certain dollar amounts. For a joint return it would have to exceed $100,000 to be reported on the US tax return. If you have other pensions as well, it would be the total held. So one $90k and two $10k accounts exceed the threshold in their total and all are reported.on Form 8938 which is part of the return. It doesn't sound like it is a "trust" by IRS definition which is the road you were going down. We do FBAR and FATCA each year and if that sounds like your situation I can help you with how my FATCA is filled out. Some of the questions are weird. Post your questions.

The FBAR is not part of the tax return and filed directly to the US Treasury, not the IRS. If the aggregate amount for all accounts exceeds $10,000, you report. Those pensions would fall under FBAR as well and maybe some savings or checking accounts. It is pretty straightforward, Name of institution, address, account number, highest balance during 2015. Done electronically online now. Due June 30.

Not sure if that helps or not. I thought it may be what you were seeking.

[chestnutt 10]

I don't know anything about Australia but if it it a retirement or pension type fund maybe this will help.

If you are receiving money from the fund, it would be reportable on a US tax return just like taxable income from Social Security retirement, pensions, or distributions from IRAs. The taxable portion would be dependent on reading details about taxation of pensions.

If you have an account overseas that is held in your name waiting for you to reach a certain age, then It is reportable on Form 8938 aka FATCA if it meets certain dollar amounts. For a joint return it would have to exceed $100,000 to be reported on the US tax return. If you have other pensions as well, it would be the total held. So one $90k and two $10k accounts exceed the threshold in their total and all are reported.on Form 8938 which is part of the return. It doesn't sound like it is a "trust" by IRS definition which is the road you were going down. We do FBAR and FATCA each year and if that sounds like your situation I can help you with how my FATCA is filled out. Some of the questions are weird. Post your questions.

The FBAR is not part of the tax return and filed directly to the US Treasury, not the IRS. If the aggregate amount for all accounts exceeds $10,000, you report. Those pensions would fall under FBAR as well and maybe some savings or checking accounts. It is pretty straightforward, Name of institution, address, account number, highest balance during 2015. Done electronically online now. Due June 30.

Not sure if that helps or not. I thought it may be what you were seeking.

First of all, thank you so much for replying!

I do not meet the thresholds for FATCA reporting thankfully. Australian superannuation accounts seem like a tricky area, the website below says that the definition for employee benefits trust vs. foreign grantor trust for super accounts is a little blurred, I'm hoping mine is counted as an employee benefits trust. Just wondering if any other Aussies have run in to this issue, I actually don't know any other ones that live over here haha

http://www.greenbacktaxservices.com/blog/australia-superannuation-us-taxation/

[Alex1 0]

Hey Chestnutt,

Did you ever end up resolving this?

In a similar boat here myself, and not sure which way to turn. This 3520 form is a nightmare.

Thanks,

Alex.

Edited May 26, 2016 by Alex1

[chestnutt 10]

Hey Chestnutt,

Did you ever end up resolving this?

In a similar boat here myself, and not sure which way to turn. This 3520 form is a nightmare.

Thanks,

Alex.

Hi Alex,

Yeah the 3520 and 3520A look like forms only an experienced and specialised tax accountant/attorney could deal with!

I'm still not sure about this, I would think every single Australian working in the USA would have run into the same issue, and I really haven't been able to find out much about it...

If you find anything out let me know, sorry I couldn't be of more help...

[Alex1 0]

Yeah... this form seems to be setup for millionaires with an army of attorneys and accountants... not your everyday immigrant who happens to have a retirement account that they can't close overseas.

I'm getting conflicting information about it all... H&R block seemed to think that I should fill out just the 3520-A, but offered no reason for it, and didn't ask me any questions about the account. I found a CPA that claimed to specialize in foreign tax and gave them a brief description of the account, they told me "You do not need to file foreign trust account form instead you should amend your return file FBAR."

I have already amended my returns -I've been here almost 5 years now, and only recently even remembered my Super account. I plan to work on the FBAR reporting over this weekend.

Looking at the forms, it doesn't really seem like it would be relevant. I mean, the only thing I seem to be able to fill in on it is my name and address and the interest on the account. I'm really not sure what most of this means, but I haven't seen anything on my super account that refers to it as a "trust" and I don't think I've had any "distributions" as I don't actually even have access to the account. I'm not in control of the money aside from a vague "Balanced, aggressive, or cash" type decision that I haven't exercised and no money has actually moved to my knowledge.

It would be nice if we could actually get the IRS to help us with this. I'm not trying to hide anything from them, and I believe I am paying what I should in taxes, (Counting all the interest as income) but it's just so gray and no one seems to really know what is what.

The irritating thing about this all is that the extra tax and accountant fees for these past few years are around 10% of the total value of the savings. I'm around 40 years away from being able to access this money... by that time it will have cost me many times over what it is even worth.

-Alex.

Edited May 27, 2016 by Alex1

[chestnutt 10]

I'm 40 years away from accessing it too, it seems way too excessive and not applicable to the kind of control we have over the money (none!). I report it on my FBAR which isn't a big deal, but I think it would be a more-discussed issue if form 3520 was something every Aussie living and working in the US had to deal with. It seems to be a very grey area with the IRS...