Reporting non-US bank accounts to IRS

If you have at least $10,000 total in bank accounts outside the US, you have to report your foreign bank account info to the US Treasury.

If you have at least $10,000 total in bank accounts outside the US, you have to report your foreign bank account info to the US Treasury.

We had Deloitte do our taxes for 2005 and we had to claim our UK accounts even though there was nowhere near $10,000 in them. In fact, I didn't fill out the paperwork correctly enough and they've jsut sent me another sheet to have me clarify my account numbers.

I don't know if anyone would get in trouble for not reporting a UK bank account with a small balance, it might be one of those forgiveable mistakes, but they made it clear to us that we had to report them anyway.

I'm actually going to split this particular topic...

The form is horribly complicated; it requires reporting of all foreign accounts; so if you have signature over a bank account at work, that gets added; over your child's UK savings book, that gets added; over your church/club/society account, that gets added; if you had a foreign securities account (eg brokerage account, stocks & shares ISA) that gets added; if you had a credit balance at any point in a UK credit card, then that gets added; the rules are generally horrid. 

Correct, if you have any control over a foreign bank account, you have to report it to the IRS.  BLAH, isn't that just grand?

Correct, if you have any control over a foreign bank account, you have to report it to the IRS.  BLAH, isn't that just grand?

What I understood was that if the accounts are over $10,000 you have to report them on form TDF something to the Treasury Dept. Otherwise you just have to include any interest etc on your 1040 along with all your other accounts.

masterblaster, from the IRS TD F 90-22.1 Form:

Who Must File this Report Each Unites States person, who has a financial interest in or signature authority, or other authority over any financial accounts, including bank, securities, or other types of financial accounts in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year, must report that relationship each calendar year by filing TD F 90-22.1 with the Department of the Treasury on or before June 30, of the succeeding year.

So if AGGREGATE BALANCE of ALL of your foreign accounts exceeds $10,000 at any point during the year, you must report ALL of the accounts.  I would say that most people would fall into this category (then again I may have a skewed view of the world).

Kit is right, as usual.  But it is not just bank accounts, it is all financial accounts. There is a deep meaningful debate about whether this includes - say - Oyster cards in credit (for those of us in London); pre-paid 'phone cards (probably less likely etc etc). Al I can say is that some lawyers have spent hours trying to comprehend the Treasury rules here, and they seem to be a nonsense!

Well crap, that means I need to watch my balance on my Oyster card to keep it under $10,000.

Well crap, that means I need to watch my balance on my Oyster card to keep it under $10,000.

 

I thought that you did not have to pay tax on any money made outside of the US if it did not exceed $80,000 USD? :\\\'(

I thought that you did not have to pay tax on any money made outside of the US if it did not exceed $80,000 USD? :\\\'(

This isn't about tax.

The US Treasury just wants to know if any American Citizens have a large amount of money outside the US, to help prevent money laundering.

Also, you report this to the Treasury, not to the IRS, so the subject line is misleading.

P.S. Even though you don't pay tax on earned income up to $80,000 earned outside the US, provided that certain qualifications are fulfilled, you still have to report the income to the IRS, then deduct it.

Wait, I have to notify the Treasury Department that I have a bank account in the UK? Even though I barely have any money in it?

Wait, I have to notify the Treasury Department that I have a bank account in the UK? Even though I barely have any money in it?

No, as stated above:

So if AGGREGATE BALANCE of ALL of your foreign accounts exceeds $10,000 at any point during the year, you must report ALL of the accounts.

Having a foreign account means any financial account that you have interest in, this includes things you have signing authority on, account you administer, etc etc etc... not only ones in your name and not only bank accounts.

So does the total balance of money you could control have a value of > $10,000 you have to report it all to the US Government.  If not, you don't have to report them.

So does the total balance of money you could control have a value of > $10,000 ...

ROFLMAO, I'm a social worker...what do you think? 

Actually, thanks for the clarification. I'm really dense when it comes to financial matters.