Heads Up For Tax Filers - New Form 8938

[HikerMark 5]

A heads up for those of us filing our taxes at the moment.

There is a new form 8938 Statement of Specified Foreign Financial Assets that you may need to file with your tax return. The penalty for not filing the form is $10,000 so you will want to check if the form applies to you.

In summary the form supplies information about your overseas foreign assets such as bank accounts, investments, pension funds and business interests. It is fairly wide reaching.

The basic rule is that if you are married filing joint and the value of the foreign financial assets is more than $100,000 at the end of the year or more than $150,000 at any time in the year you need to file the form 8938. For married filing separate the limits are $50,000 and $75,000.

Those limits may sound high but the foreign assets include foreign pensions. So, if you have left your foreign pensions in your home country the value of those could easily take you over the filing limits.

Make sure that your tax preparer is up to speed with the new form and that you check if you need to file it. A $10,000 penalty for not filing is a lot to pay.

Edited January 23, 2012 by HikerMark

[Neonred 3,460]

Would my apartment in Russia be considered an investment or financial asset? I'm guessing yes.

[HikerMark 5]

Would my apartment in Russia be considered an investment or financial asset? I'm guessing yes.

Some tax advisors have been suggesting that to be on the safe side you should report foreign real estate on the 8938.

The guidance notes for the 8938 don't explicitly refer to real estate and mainly concentrate on assets such as bank accounts, stocks, trusts and pension funds. However, you are supposed to report interests in any business you run so I guess if foreign real estate is being rented then it could be argued that it should be disclosed.

My own reading of the guidance notes is that real estate does not need to be disclosed but ultimately it is your choice if you want to report the real estate and play it safe.

[DiZZyLoX 114]

shoot. i WISH we had that problem!! good call out, though