# reporting bank ballaces to USA



## Phil_expat (Jan 3, 2011)

A friend of mine is seeking information on the USA state department requirement of reporting bank balance of $10,000 or more. Does anyone know the website or the term use to describe that requirement?
Tony


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## DonAndAbby (Jan 7, 2013)

Phil_expat said:


> A friend of mine is seeking information on the USA state department requirement of reporting bank balance of $10,000 or more. Does anyone know the website or the term use to describe that requirement?
> Tony


The law is FATCA:

Foreign Account Tax Compliance Act

And the bank reporting, FBAR, is done online here:

BSA E-Filing System - Welcome to the BSA E-Filing System


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## Cebu Citizen (Dec 13, 2013)

This requirement to report any and all amounts or foreign bank balances of more than $10,000 US Dollars is only assessed on the actual and current balance in the account?

Is there a time limit on the balances? For example...if I transfer money to the Philippines but then it is spent on living expenses and the balance is always below the $10,000 cap and then I transfer more and spend more...etc, etc.

Does it matter if the balance never goes above the $10,000 cap or is it a total amount deposited in a certain length of time that might go over the $10,000 limit? And if this is the case, what is that time limit? Each month, every three months, etc.


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## DonAndAbby (Jan 7, 2013)

Cebu Citizen said:


> This requirement to report any and all amounts or foreign bank balances of more than $10,000 US Dollars is only assessed on the actual and current balance in the account?
> 
> Is there a time limit on the balances? For example...if I transfer money to the Philippines but then it is spent on living expenses and the balance is always below the $10,000 cap and then I transfer more and spend more...etc, etc.
> 
> Does it matter if the balance never goes above the $10,000 cap or is it a total amount deposited in a certain length of time that might go over the $10,000 limit? And if this is the case, what is that time limit? Each month, every three months, etc.


Read the links I gave for the official version. To summarize, if you have over $10,000 balance in a foreign bank account ANY TIME DURING THE CALENDAR YEAR you have to file the FBAR. If you never have over $10,000 balance then you do not have to file. It has nothing to do with transfers, only balances.

Some people avoid this FBAR filing by never transferring a lot of money. E.g., just transfer enough each month for your one month living expenses, then your balance will never reach 10k.

I have to file. It is hard to avoid if you want to buy a car, etc. I'm not going to try and keep a large amount of cash outside the bank. I would probably forget where I hid it!


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## yakc130 (Apr 27, 2012)

Agree. I just found out this year from my tax guy about this. He specializes in overseas income. 

Even though the Saudi Gov't pays me, and there are no taxes, I have to file the report because I exceeded the $10K mark for a few days in my foreign bank account.


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## 197649 (Jan 1, 2013)

What I have done for several years is to limit my transfers not to exceed 9000 USD or equivalent balance. This way you are safe.


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## DonAndAbby (Jan 7, 2013)

c_acton98 said:


> What I have done for several years is to limit my transfers not to exceed 9000 USD or equivalent balance. This way you are safe.


To be clear for the rest of the group, you need to NEVER let your bank balance exceed 10,000 USD, or you will have to file the FBAR. So in his scenario, he would transfer 9000 and then let his bank balance go down to less than 1000 before transferring the next 9000 at a later date. Thus never exceeding 10,000.

I would try to do this but last year I bought a car and needed more than 10k, and this year I might replace it with another new car, so I have to transfer more than 10 k.


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## jon1 (Mar 18, 2012)

DonAndAbby said:


> To be clear for the rest of the group, you need to NEVER let your bank balance exceed 10,000 USD, or you will have to file the FBAR. So in his scenario, he would transfer 9000 and then let his bank balance go down to less than 1000 before transferring the next 9000 at a later date. Thus never exceeding 10,000.
> 
> I would try to do this but last year I bought a car and needed more than 10k, and this year I might replace it with another new car, so I have to transfer more than 10 k.


To further clarify, its no $10,000 per account but COMBINED over ALL accounts. 

Don, since you are already planning for the next purchase, why not drag your transfers out over a few months to keep it under $10K and that way you avoid the FBAR? If you want all of the money in a bank, put it in your girl/wife's account. I have done that in the past and the IRS has nothing to say as she is not a US citizen.


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## DonAndAbby (Jan 7, 2013)

jon1 said:


> To further clarify, its no $10,000 per account but COMBINED over ALL accounts.
> 
> Don, since you are already planning for the next purchase, why not drag your transfers out over a few months to keep it under $10K and that way you avoid the FBAR? If you want all of the money in a bank, put it in your girl/wife's account. I have done that in the past and the IRS has nothing to say as she is not a US citizen.


I already exceeded for this year so I have to file FBAR. Next year I may try to avoid it.

There is another part of the law for if you own foreign assets over 50k, just FYI for those who might need it.


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## Cebu Citizen (Dec 13, 2013)

Don and Abby; Not always the safest thing to do but if a person were planning a larger investment like a car, and wanted to avoid filing FBAR, it still works to draw the money out and have it in cash on hand while you transfer some additional funds right? As long as the actual bank balance never goes above the $10,000 mark?

And also...in another thread several members were discussing never having to report balances to the IRS as long as they were lea than $50k? What is the distinguishing difference in this 10k and 50k reporting and filing? Can someone clear that up for me? (I may have missed something here).


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## 197649 (Jan 1, 2013)

The 10k is cash in bankS. the 50k is assets which include bank, car, house. I believe NOT SURE this would apply if your wife has a TIN, or if the asset is in your name. Tracking foreign investments is hard enough for the IRS. They cannot make the bank provide them information unless they have a deal with them. Another thing is once your house or car is paid in full. The IRS cannot go to LTO or Land Management to see if you own a home / car. When you tell IRS that you paid property tax but then don't show an asset a RED FLAG is raised.


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## Cebu Citizen (Dec 13, 2013)

In another thread titled Qualified Real Estate Expert...it is being discussed that having less than 50k in money does not have to be reported to the IRS. That seems to be in direct conflict to the comments posted here. They are not talking about property assets...they are talking about cash money.

I'm not trying to stir the pot...I'm only trying to get to the actual facts so I can make an informed decision.

Thanks for any feedback...


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## 197649 (Jan 1, 2013)

No your not stirring the pot IRS is, the laws are confusing and contradict each other. None of use want the IRS to target us working stiffs


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## jon1 (Mar 18, 2012)

c_acton98 is 100% correct. I would rather overpay than underpay the IRS to stay off of their radar.

Check out this table for specifics Comparison of Form 8938 and FBAR Requirements


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## jon1 (Mar 18, 2012)

Here is an interesting article on the FATCA The countdown begins for FATCA... | BusinessWorld Online

What I find interesting is that it works in reverse for participating countries. They get visibility from the US end on tax evaders. So that means all of the grafters from the PI that have fled to the US with previously undisclosed balances will be reported by the US back to the Philippines. I would anticipate some subpeonas issued in the future once FATCA is offically in place on July 1 for some of the cases in the spotlight.


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## yakc130 (Apr 27, 2012)

My recommendation is this. Find a tax preparer that specializes in overseas income. They will be more familiar with these things than one who only does taxes within the US alone.

I have a guy that I have been using since I took my job in KSA. He has helped a lot with explanations, and making sure that I get the right paperwork in on time.

This would save you piece of mind if you are that worried.


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## rpmorley (Oct 30, 2012)

This is confusing and very alarming. $10k is really not that much to have on hand locally. This really a Big Brother watching issue. Anyway, I think that the FATCA is 2 part, the Form 8938 but the reporting threshold is huge, taxpayer living abroad filing joint where your foreign account exceeds $400k and the FBAR if your account(s) exceed $10k anytime. So, to use an old analogy, knowing which hand holds the knife is 1/2 of the knife fight. Deposit, withdraw, hide under the mattress and do this again and again for those big ticket items like a car or a house. The Man holds the knife. Another option is to wire transfer directly to the car dealers account or the property developer etc (if you trust them) so as to avoid your own money that you are already paying taxes on any paltry interest you may be earning, passing thru your account.


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## 197649 (Jan 1, 2013)

This is going to be an interesting this year for me. Really a pain in the A$$ dealing with IRS. I received a large back pay in my disability which exceeded the FATCA rules. Now what I am digging to try to find is how that will work since disability is non taxable. I know interest would be taxable. Anyone had any experience on this?


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