US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
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NB: This discussion is a continuation of an older discussion that became to large for our software to handle well. See US expat tax and FBAR: Discussion thread (Ask your questions) Part One.
@banany
“I just need to fill in the market to market value of my pension plan on the 8854 and it will finally be done”.
Does this have to be done even when one has been compliant (5 years taxes) and is under the 2 million assets limit? How would I figure market value of a tax-treaty covered pension that I do not yet receive? Would I even have to do it?
Just asking as I want to plan before I renounce and have about 6 months to do the planning.
@allou
It makes no sense to me either, but I went to a CPA here in Ottawa and she told me that I needed to fill that in. What IRS wants to know is how much money your estate would have received from the pension plan on the day before you renounced or relinquished if you had died. I am an uncovered expat, five years of compliance, 6 years of FBARS and waaaay below the $2000,000 assets limit. I can’t wait until all of this is over and I won’t have to be afraid of winning the 649.
Sorry. Agitation and age lead to typos. The last part of the second sentence should read “the day before you renounced or relinquished as if you had died.
@banany
I read as how much my “estate” would receive in cash, if I had a life insurance policy included in a pension plan and died and my spouse received X amount in a lump sum?
Interesting. This is a real incentive for anyone NOT to take out a large sum life insurance. What happens if one has an insurance policy against becoming unemployed (I don’t, but they do exsist) How ever could they compute that? I am still debating whether to go streamlined or file 6 back years + Fbars – I have the data but am not yet finished. Do you have any input on those options? Lucky you further along the road to freedom!
@allou
If you plan to relinquish or renounce soon, I think you would have to file 5 years of back taxes and 6 years of FBARS to avoid being a covered expat. I did that. H&R Block did the taxes and FBARS and it cost around $1800. I think streamlined is only 3 years of taxes. In order to renounce or relinquish IRS requires 5 years of tax compliance and 6 years of FBARS
As for computing the value of a pension plan etc., I would never try to do it. I wrote to the company that handles the pension plan and asked them how much would go to my estate if I had died last year on Nov,4.
I also went to a real CPA to check over the work done by H&R and to advise on filling out form 8854. My case is simple because I own nothing, only a pension, an RRSP and 2 chequing accounts. Blessed are the poor. I really don’t know what I’d do if I had complicated finances like some of the posters here. Good luck to ya. Looks like you’re getting your ducks in order.
@banany
Thanks for this answer. I know about the 5 years and the streamlined. My problem is that there are no tax accountants/firms to do my taxes in this country. I have done most myself and am just wondering which way to go. Luckily I finally found a US accountant (online) who is reviewing my efforts. When I contacted the pension plan they had no idea of what I should do, but I assume they can do the computing part when the time comes. Well time to get back to those forms…Cheers!
Bit of a daft question, but how do you write your SSN on your FBAR? I’m just getting my forms ready for my tax preparer and he’s said to take the hyphens out of the SSN. So is it one long number or 3 bits without the hyphen? All the examples I’ve googled show the number with hyphens so I’m wondering why they would be dropped for the FBAR.
@Medea Fleecestealer
I’ve always used hyphens in the SSN on all forms including FBAR and was never incarcerated for it. Maybe I just got lucky, though. 😉
@Medea Fleecestealer:
2012 FBAR instructions (page 7, right-hand column): “Throughout the FBAR, numbers should be entered with no spaces, dashes, or other punctuation.”
This may be an attempt to make the format ‘computer-friendly’, because it seems that Fin-Cen is mandating on-line filing for ALL FBARs after this year’s deadline.
@All:
Alas ‘computer-friendly’ is a far cry from ‘user-friendly’. I dread having to file fbar online, and have submitted comments to TAS about it:
———-
“A logistical nightmare is approaching concerning the fbar. As of next year fbar filing is required to be done exclusively online; yet the Fin-Cen interface for doing so requires the use of an out-of-date Internet Explorer browser (representing less than 30 percent of browsers in use, and which cannot run on either Apple or Linux machines).
“Even if Fin-Cen’s security is excellent (and this situation does make one wonder…), forcing people to provide their most sensitive data (including social security number and account numbers) using out-of-date machines presents a massive ID theft risk.
“I, for one, run exclusively on Linux, and never use account information online, yet am now being forced to take the risk, the cost, the time, and hours and hours of effort to purchase, disinfect, and set up such an out-of-date Windows system just for this purpose. (It’s not an option to use the library or internet cafe, since such places are almost certainly keylogged and their use would be a gift to ID thieves).”
——–
I went on to urge the respecting of web standards in the fbar filing interface, among other things.
———
Makes one wonder how Apple must feel about having the government favor Microsoft over them in this way???
And, sorry IRS, there should be a choice for out-of-US people to file their FBARs by mail. Your security history does not give one confidence! Not everyone has the correct computer and some oldsters may not be computer literate, forcing them to, again, pay for this service to be able to comply to their mostly duplicative (to FATCA’s 8938) Foreign Bank Account Report.
Thanks for highlighting the potential problems and logical concerns to TAS, Sad in the UK.
@Sad in the UK, oh heck, I never thought to look in the instructions. Yes, I expect you’re right, they’re trying to make it easier for computerisation. Luckily I haven’t sent them off yet, just took the hyphens out and left spaces.
I agree that this rush, not just in the US but elsewhere, to do everything online is frustrating and annoying. UK tax forms can be filed online except, oops, if you live abroad; then you’re supposed to file a paper one. I can get around that one though. But a more recent problem emerging is having to have a credit/debit card that matches a particular address. I recently tried to order a UK television licence online and couldn’t do it. We’ve inherited the house from my late father-in-law, but all our stuff is Swiss based of course. So we don’t have any cards with the UK address on them, so couldn’t order online. Also can’t pay UK bills online either due to not matching. Yet the UK was recently suggesting getting rid of the good old cheque because of falling usage. Luckily, they’ve dropped that idea because I’d be stuck if I could send a cheque off in the post.
I am an IT-Person. If they cannot handle hyphens, it’s their fucking problem. Seriously, it’s absolutely trivial.
@notamused,
But, are we surprised?
Edit: “they’re” should be “their”. English is not my first language anymore…
Okay, another stupid question. Do you send all the pages of the FBAR, even if some of them are empty or only the pages you actually complete? I’m assuming only the pages with info in them unless I hear otherwise. But then again, the IRS might like empty pages.
@Medea
I never sent the empty pages and was never questioned about it.
@Medea
The only thing I was ever questioned about was when I left out the account numbers from the FBAR. They didn’t like that.
@ calgary411
Indeed, why abstain from a source of revenue, no matter how absurd?
Fixed. The other word works in any language.
@Notamused I’m okay on that. I have my massive number of accounts (2) listed as they should be. Mind you both numbers have hyphens … and dots separating the numbers!
The e-FuBAR next year had us worried (security) but now to find out that it isn’t Apple friendly? Outrageous! They want to make it impossible to file so they can collect FBAR penalties. What a desperate, pathetic, moronic nation the USA has become. My husband will NOT be pleased about this. I hope my husband’s Canadian citizenship comes before the end of this year (applied a year ago) because we can’t take much more IRS induced aggravation. 🙁
Where is Harry Reid’s favorite–former Secretary of Treasury Timothy-the-tax-cheat Geithner? “A new disclosure contradicts repeated public statements by former IRS Commissioner Douglas Shulman that tea party groups in 2011 were not targeted”—-http://www.usatoday.com/story/news/nation/2013/05/11/irs-knew-tea-party-targeted-in-2011/2152585/
The IRS is in charge of ensuring that Americans are honest.
“IRS commissioner Douglas Shulman gave explicit assurances that the IRS was not targeting Tea Party groups. “What’s been happening has been the normal back-and-forth that happens with the IRS,” he said. “And so, there’s absolutely no targeting.” ”
http://www.usatoday.com/story/news/politics/2013/05/11/irs-tea-party-investigation-timeline/2153007/
Are Douglas Schulman’s services irreplaceable?
@notamused
The only thing I was ever questioned about was when I left out the account numbers from the FBAR. They didn’t like that.
What was the result of your failure to provide account numbers? I have considered that myself.