# USA Tax and FBAR filing/reporting requirements for new immigrants - Question



## Whatsnext

Hi, if we were to go ahead with immigrating to the USA and entered prior to the end of calendar year 2014 (estimated Dec, based on visa approval in June), at what point would we be required to file a tax return and FBAR form for the first time?

Furthermore, will our bank accounts and income as it all relates to calendar year 2014 be subject to disclosure in that first tax return, even if bank accounts are closed down prior to us moving to the US?

From what I understand, we'd get 6 months from the date of the medicals (not the date of visa approval) to travel to the US to activate our GC, and that first activation date somehow determines tax filing requirements - but I can't remember the rules.

We expect our possible visa interview/approval in either June or July, i.e. in 3 to 4 months from now, and we are still in two minds about everything.

Thanks for any clarification on the rules.


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## BBCWatcher

Whatsnext said:


> Hi, if we were to go ahead with immigrating to the USA and entered prior to the end of calendar year 2014....at what point would we be required to file a tax return and FBAR form for the first time?


Separate questions. FBAR yes, assuming you meet the filing threshold. A tax return is a little more complicated since it depends on the timing of your move, your U.S. source earnings, and how much unearned income is attributable to your U.S. time. But it may be a good idea to file anyway to pick up some Foreign Tax Credits. Look in the IRS's publications for what's known as a "dual status alien" and that'll explain the rules.



> Furthermore, will our bank accounts and income as it all relates to calendar year 2014 be subject to disclosure in that first tax return, even if bank accounts are closed down prior to us moving to the US?


Yes.

I have no idea why that would be a concern, though. Are you financing a terrorist group? Laundering money for cocaine distributors? If you're doing those things, you're probably prepared to lie to the U.S. Treasury.


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## Bevdeforges

But to answer the question, the FBAR is a separate and distinct filing from your US income tax returns. It's possible to have to file an FBAR even if you don't have to file a tax return and vice versa. And it may depend a bit on what sort of visa you're coming to the US on, too (at least immigrant vs. non-immigrant).

Taxation of Dual-Status Aliens and publication 519, which is referred to at the bottom of the page should give you an idea how these things are figured. 
Cheers,
Bev


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## Whatsnext

Thanks guys for the info and links to the relevant tax infos. I had a quick glance over that page and the publication 519, but will check out in more detail. Very helpful.

BBC Watcher, regarding your comment to my "furthermore" question, I can put you at ease, all is perfectly legal at our end . We want to close down most of our bank accounts, anyway for lack of use. Are you generally assuming someone must be a crook, if they want to learn what they absolutely need to report on, especially when most of it relates to the part of the year prior to becoming 'U.S. Resident Aliens'?

Thanks again.


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## maz57

@Whatsnext. I think BBC was using humour to illustrate his point that criminals would be unlikely to be asking questions on a forum like this one. I don't believe he was suggesting something untoward was going on.

I will note , however, the US government will consider you "suspect" merely by having "foreign" accounts even though those accounts predate your taking up residence in the US. The US seems to be generally suspicious of anything foreign and that's why they require all of the foreign account reporting.

Filing FBARs requires registering with the Financial Crimes Enforcement Network. If all of this reporting seems obnoxious, bothersome, or intrusive you have two choices: either get used to it or move somewhere else.


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## BBCWatcher

maz57 said:


> I will note , however, the US government will consider you "suspect" merely by having "foreign" accounts even though those accounts predate your taking up residence in the US. The US seems to be generally suspicious of anything foreign and that's why they require all of the foreign account reporting.


No, that's not it. The U.S. wants these data for all accounts -- every account is "suspicious" in your terms. The U.S. gets financial reporting from financial institutions in the U.S. automatically, and FBAR/FATCA are manual substitutes for accounts elsewhere, that's all.

Rewinding a bit, are you planning to return to Australia, or could you? In that case you'd need some Australian dollars, right? So why take the double currency conversion cost? To avoid FBARs? Why? And did you know there's also a cash reporting requirement -- most countries have that -- if you're trying to move a large(ish) amount of cash across a border?


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## Whatsnext

maz57 said:


> @Whatsnext. I think BBC was using humour to illustrate his point that criminals would be unlikely to be asking questions on a forum like this one. I don't believe he was suggesting something untoward was going on.
> 
> I will note , however, the US government will consider you "suspect" merely by having "foreign" accounts even though those accounts predate your taking up residence in the US. The US seems to be generally suspicious of anything foreign and that's why they require all of the foreign account reporting.
> 
> Filing FBARs requires registering with the Financial Crimes Enforcement Network. If all of this reporting seems obnoxious, bothersome, or intrusive you have two choices: either get used to it or move somewhere else.



Maz/BBC:
Our situation is that we are dual EU/AUS citizens and now have the opportunity of getting green cards for the US through the DV Lottery within the next few months, based on our case number and progress in current visa processing.

My original question is to be seen from the perspective of the logistics of organizing our financial situation ahead of a possible move to the USA.

We have actually not made a final decision on whether or not we are in fact going ahead with pursuing the 'American dream' - as to be honest, after learning that the USA adopt a CBT system rather than residency based like the rest of the modern world, we are seriously put off as we don't want any future plans of living in other parts of the world adversely impacted by this highly unusual and unwarranted concept of reporting (or being reported on, via FATCA), no matter where in the world you live as a 'US person'.
It is commonsense to be taxed in the country of residence, but in our view it is insane to be enslaved to tax filing requirements by one country, no matter where in the world you live. 

So yes, we are indeed also considering the option of moving elsewhere. Since we don't believe the EU will make it much longer in its current form, and we don't like what it has turned into since we had left, the natural course of action would be to move back to AUS for now. Perhaps in the future, we will be based in a completely different location. Thailand, Philippines, Singapore...? I'll have to read up on lots of valuable info in this forum


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## Bevdeforges

The ultimate decision is, of course, up to you. And, you're wise to consider the CBT issue before moving over and putting things into motion.

That said, you probably shouldn't base too much on the FBAR side of things. A few other countries (such as France, where I live) require you to report foreign bank accounts and life insurance policies (assurance vie) each year along with your tax declaration. (Though to a lesser level of detail than the FBAR reporting requires.) There is a push on internationally to "do something" about international tax evasion and money laundering, and I suspect we'll gradually see more requirements of this sort in other countries.
Cheers,
Bev


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## BBCWatcher

Italy has a "FBAR Plus" called Form RW, as another example.

A green card is not citizenship, and it does not come with an obligation to pursue naturalization as a U.S. citizen. If you want to move to the U.S. then move to the U.S., and if you then decide you want to give up your green card(s) for future tax-related reasons, do that.


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## maz57

If you do get a green card and move to the US you will be a US tax resident with all the "foreign" reporting that implies. And BBC is right that many countries will tax you on your worldwide income if you are their physical resident; the US is not particularly different in that regard. 

But a green card is not citizenship and is "undoable" by filing an I-407; an official declaration that you are no longer a US resident. That will release you from further US reporting if you later leave the US. The big "gotcha"or magic number is eight years. After possessing a green card for eight years or more, you are permanently subject to the same taxation rules as a US citizen if you later decide to leave. The only escape from the US tax regime at that point is via the exit tax even if you properly file an I-407.

The bottom line is you could "test drive" the US for just short of eight years and then leave with no further tax obligations if it doesn't work out. The US and it's CBT is only bothersome if you don't live in the US. Most Americans don't even know it exists.


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