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What to Know About Your FBAR Filing? FBAR Filing On Your Overseas Accounts| Gordon Law LTD call at (847) 5801279 The IRS has taken more measures in recent years to prevent taxpayers evading their taxes. Many richer taxpayers have been placing their funds into private overseas accounts in order to avoid paying taxes at the end of the year. Since the IRS will have a hard time finding this money, the process becomes easier for people to hide how much they own. The taxpayer can report how much they want on a tax return, and unless the IRS puts a close eye on the process, the taxpayer can hide thousands of dollars. This process can go on for years and ends up hurting the average American with higher taxes.
To prevent some taxpayers from trying to hide their money overseas, the IRS has taken some measures to find out who has these accounts and if they are reporting the information correctly. If you have a foreign account overseas, excluding some retirement plans, you need to report these numbers to the IRS by the June deadline. When you report the numbers, the IRS will tax you at a normal rate, and there will be no issues. A lot of issues can occur when you fail to report the bank accounts. You may be able to get away with not reporting for a few years, but once the IRS finds out, you will have to pay some hefty fees. You need to report any overseas accounts you may have if you are a US citizen. You can report this information online. You will need some basic information to do this. You need the name of the bank, the highest balance of the account for the whole year, the account numbers, and other information that allows the IRS to check on the facts. The IRS requires that you report any accounts that are over $10,000 at any time during the year. This limit is problematic for some people. You may have an account that usually sits below this amount, but one big deposit leaves it higher for a few days. The IRS would still require you
to report the account even if it is usually under the $10,000 limit. If it stays below this limit all year long, you do not need to report what you have in the account. But even one day with the limit at or above will cause the IRS to need the information for your accounts. Failure to report your earnings can cause a lot of fees with your accounts. The IRS does not take kindly to people hiding these accounts. The IRS will assume you hid these accounts in an attempt to avoid your taxes that year. The IRS can apply many fees to the amount in your accounts, including a tax of 50 percent of what is in the account. You may be able to hide the money for a few years, but it is best to pay the amount in full right away. Paying right away helps prevent the fees from being added on and costing more than if you just shared the information to start. You are in a lot more trouble if the IRS finds out about the account on their own rather than you telling them about the account. In some cases, the IRS will provide some leniency. Since some of the rules have recently changed, there are some taxpayers who can get a break if they did not originally claim the overseas accounts. In these cases, the IRS will provide some leniency if you come forward and report the accounts. A FBAR Filing professional can help you to fill out the right forms to get this done. If you report the accounts, you can get taxed based on the normal tax amounts and will not have to pay all of the fees and another charger. But if you wait and let the IRS find out about this, you will be in a lot of troubles and cannot fall back on the "I didn't know" option.
Reference: https://www.gordonlawltd.com/tax-law/fbar-filings/