# Sorry, bit Confused with Taxes



## norak (Apr 27, 2014)

Hello everyone. I am a US citizen and have been diligently filing my return from the UAE for 20 years. My husband and I have now moved on to Libya but my kids remain here. I came back this month specifically to get my taxes done because there is no mail system in Libya.

I am confused with the talk of FACT? and FBAR? discussions. I have always checked the Form 1040 about having control of a foreign account, and last year I filed the 8938. Are these the same things, or am I missing something? I have my return finished with the exception of the this 8939 part -- it seems so confusing this year. Do I have to attach a continuation statement for each separate account? This is just getting to be too much. Over 20 years here we have had a few accounts that have not been officially closed but have zero funds and been dormant for years and years. Do you think I need to even mention them?

What's this talk about closing accounts. Because of our move and because my one daughter is still in University here, I liquidated some my savings certificates (disclosed last year) to fund the maintenance of our home here and the children until they are self sufficient as my son has just started working and does not earn enough to support himself let alone my daughter. Those funds were transferred into my son's account --- am I going to be penalized for this? I have prepared my son's first tax return this year and included those funds on his form. 

Ladies, I am so confused now. Do I need to amend returns -- I can say that it will not affect previous returns in terms of amount owed. I'd like to ignore all of this as it has become very annoying.


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## BBCWatcher (Dec 28, 2012)

Relax. It's all quite simple. There are two possible reports you may be required to file:

1. "FBAR," i.e. FinCEN Form 114, which is a U.S. Treasury Department form. You fill this one out online -- no postage required. If the total value at any point in time of all your non-U.S. financial accounts (including joint accounts and accounts over which you have signature authority) was $10,000 last year, file that form. FinCEN Form 114 is due on the June 30th following the calendar year that you're reporting.

2. "FATCA," i.e. IRS Form 8938. There are higher thresholds that trigger your requirement to file this form, so chances are if you are required to file IRS Form 8938 you're also required to file FinCEN Form 114. You file Form 8938 together with your tax return (whenever that is due).

Yes, you include zero balance accounts. (Close them if that bothers you, but it shouldn't bother you.) No, you have nothing to be concerned about transferring money to/from your children. Transferring money to a terrorist organization is another matter. Sometimes children can act like little terrorists at home, but the U.S. Treasury Department isn't worried about that.

There is no tax liability associated with these reports. They're just reports. Yes, the IRS and Treasury are quite aware that major amounts of money can pass through your accounts without your having to pay tax. Disclosure of this information is most boring. The information you're hiding or failing to report accurately is much more interesting. I recommend you be boring -- and relax, please.


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## norak (Apr 27, 2014)

Thank you so much for the reply. Breathing again--still frustrated but calmed down. I had no idea of the FBAR filing and will make sure to do that this evening. Thank you again!!!!


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## DavidMcKeegan (Aug 27, 2012)

If you have never filed an FBAR before, and have been over the 10K threshold for some time, I would recommend filing the last six years of forms. 

They usually request the last six years of FBAR to be considered completely caught up. Fortunately you can e-file all six years at once, and there is a section where you can explain that you did not know of your need to report. Also, as there is no tax due for FBAR's, there is no harm in over reporting.

Good luck!


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## norak (Apr 27, 2014)

Wow, was not aware that this has been required for the last 6 years --- where was I? Do I do the whole six years by just putting the tax year as 2007 - 2013? This form is essentially another 8938 from what I can tell -- so why is this different and necessary? I hate to whine but this is getting ridiculous for what little money we have. For me to mail my tax return as it is will be fortune with the 1040 long form, schedules, a small capital gains from for one lousy little stock we had, and all the "continuing" papers for the 8938, etc. 

Can somebody direct me how we do the FBAR for filing jointly. 

Seriously, I am getting very frustrated.


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## BBCWatcher (Dec 28, 2012)

"FBAR" (FinCEN Form 114) is always an individual report. There's no joint filing (though you, individually, might be reporting joint accounts on your form if you're required to file). You may be required to file this report while your spouse is not, or vice versa. If you're both required to file, you each file separate reports. There's also no postage -- it's an electronic form.

Just go find FinCEN Form 114 and read the instructions. They're rather well written, and it's a rather simple form. FinCEN Form 114 is not nearly as complicated as tax filings. Yes, you can electronically back file for any year(s) you need.

FinCEN Form 114's predecessor was known as TD F 90-22.1. FBARs were introduced in the 1970s.

As for why there are two similar (but not 100% identical) financial reporting requirements, you'll have to ask the U.S. Congress since they write the laws. Not altogether unprecedented, though. For example, why must a New York City resident file federal, state, and municipal income tax returns? One tax return would be nice, wouldn't it? Yet New York City residents must.

Yes, I agree, it'd be nice if there were one consolidated report.


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## Bevdeforges (Nov 16, 2007)

norak said:


> Wow, was not aware that this has been required for the last 6 years --- where was I? Do I do the whole six years by just putting the tax year as 2007 - 2013? This form is essentially another 8938 from what I can tell -- so why is this different and necessary? I hate to whine but this is getting ridiculous for what little money we have. For me to mail my tax return as it is will be fortune with the 1040 long form, schedules, a small capital gains from for one lousy little stock we had, and all the "continuing" papers for the 8938, etc.
> 
> Can somebody direct me how we do the FBAR for filing jointly.
> 
> Seriously, I am getting very frustrated.


Oh, the FBARs have a been a requirement for much longer than 6 years now. But up until quite recently, they weren't getting too concerned about whether you filed or not. 

Report of Foreign Bank and Financial Accounts (FBAR) is probably the most helpful bit of information on the subject.

Cheers,
Bev


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