What to Know About Declaring Foreign Bank Accounts
There are numerous benefits to offshore banking, but there are just as many rules and regulations that must be followed to ensure that you don’t end up liable for penalties and sanctions. When it comes to foreign bank accounts, legal and tax implications can quickly become complex. Declaring these accounts is crucial, and ensuring that assets are properly declared is every bit as important.
How to Declare Foreign Bank Accounts
If you are a resident of the United States who holds offshore finances, then you are legally required to declare your income and assets through documentation such as the Foreign Bank and Financial Accounts (FBAR) or Foreign Account and Tax Compliance Act (FATCA). If you do not declare this information, or if your financial information is improperly declared, then you could face dire consequences. Even the act of omitting assets or income on mistake can result in hefty penalties.
What are the Penalties for Noncompliance in Foreign Bank Accounts?
Noncompliance in foreign bank accounts can mean not declaring offshore accounts at all, forgetting to report some assets on accident, or omitting assets on purpose. No matter why it happens, noncompliance isn’t a desirable situation to be in. If assets were omitted on purpose, then the consequences will be more extreme. Even an accidental mistake can lead to heavy penalties.
If you were required to file a FBAR and failed to do so, then you can expect penalties and fines. If you failed to report income or assets, then you could face fines of up to $10,000 per year the money wasn’t accounted for via the FBAR.
How Can I Avoid Problems with Declaring Foreign Bank Accounts?
The first step to ensuring that you don’t have any problems arise from declaring your foreign bank accounts is to be in compliance from day one. Always report everything via the appropriate documentation. The best way to make sure that you’re in compliance in terms of your financial obligations is to work with a professional who specializes in foreign bank accounts. They can walk you through the ins and outs of everything you need to do to avoid penalties and fines.
What Do I Do If I’m Not In Compliance?
If you realize you’re not in compliance with the regulations of declaring your foreign bank account, then we can help. Maybe you just set up the account and want to get started with the declarations process. Maybe you set up the account years ago and simply forgot to file last year. Perhaps you’ve forgotten an asset this year or over the course of several years. No matter the case, the best first step is to find a specialist who can guide you through what comes next.
Our team is uniquely qualified to help you in declaring your foreign bank accounts, and we can offer a wealth of knowledge to make sure you’re in compliance year after year. Need help with a compliance issue? We can help with that, too.