FATCA & FBAR - can it be avoided by simply not ever getting a job?

[Unknown Guest 15]

I noticed that FACTA/FBAR requires reporting for any asset over $10k owned abroad. But the other half of the requirement is that you only have to file FBAR and comply with FACTA if you are required to file income taxes. If a person wanted to avoid FACTA & FBAR, can he/she just NOT EVER bother with working a job in the U.S., thus not be required to file for income taxes?

[NigeriaorBust 4,087]

As an LPR you are required to file taxes on your world wide income.

[Unknown Guest 15]

what if just never bother receiving income anywhere in any foreign country or the U.S.? Such that I don't have any reportable income. Would I still need to file FBAR or comply with FACTA?

[belinda63 3,038]

So how are you going to survive if you don't make more than $3,900 per year? How are you going to file the affidavit of support if you don't have an income? Your possible LPR spouse will not be eligible for any type of means-tested benefits so how will she survive if neither of you have an income? How are you going to prove she won't become a public charge if you or her never work?

[belinda63 3,038]

I'm sorry but I have to put some personal issues in here. It seems you are more worried about paying taxes than taking care of your family. Your now wife if pregnant and wants to attend school but you don't want her to become an LPR because that means she will have to pay taxes on foreign earnings. Now you realize she has to become an LPR to stay in the US legally (which it doesn't sound like she really wants to live here) and to attend school. So now you are saying neither of you will work so you don't have to file taxes so she doesn't have to pay them on her foreign income. But you have no concern at all for the kind of life your family will have with no income. If you and your wife don't want to comply with US law then you need to go live in another country.

[Unknown Guest 15]

I'm sorry but I have to put some personal issues in here. It seems you are more worried about paying taxes than taking care of your family. Your now wife if pregnant and wants to attend school but you don't want her to become an LPR because that means she will have to pay taxes on foreign earnings. Now you realize she has to become an LPR to stay in the US legally (which it doesn't sound like she really wants to live here) and to attend school. So now you are saying neither of you will work so you don't have to file taxes so she doesn't have to pay them on her foreign income. But you have no concern at all for the kind of life your family will have with no income. If you and your wife don't want to comply with US law then you need to go live in another country.

You are making a wrong assumption. I already have a high-paying job which is more than enough to support my entire family - wife, and potential future kids. it is unlikely that her field of study will garner a salary over $50k/year (or less than $35k a year post tax). We both agree that it seems pointless for her to work for such a paltry salary and then subject her to having to file under FACTA. When she can simply forgo a salary/working, and not have to file any taxes whatssoever, while I can continue with my job, and file taxes as Married but separate filings (ie. I file my taxes, and she doesn't file any taxes since she won't work).

So am I right or wrong with my assumptions of how FATCA and FBAR works?

I can file MY income taxes as Married, but filing separate.

She doesn't bother with working, so she does not need to file income taxes, and thus not need to be subjected to FACTA and FBAR?

Edited June 19, 2014 by Unknown Guest

[aaron2020 11,651]

Whether your wife files a US tax return or not is irrelevant.

If she has assets outside the US or in a foreign bank account, FATCA and FBAR applies to her as an LPR.

Want the privilege to live here, then comply with the foreign assets disclosure.

Want to avoid FATCA and FBAR, then bring the assets to the US.

[Owen_London 65]

You are making a wrong assumption. I already have a high-paying job which is more than enough to support my entire family - wife, and potential future kids. it is unlikely that her field of study will garner a salary over $50k/year (or less than $35k a year post tax). We both agree that it seems pointless for her to work for such a paltry salary and then subject her to having to file under FACTA. When she can simply forgo a salary/working, and not have to file any taxes whatssoever, while I can continue with my job, and file taxes as Married but separate filings (ie. I file my taxes, and she doesn't file any taxes since she won't work).

So am I right or wrong with my assumptions of how FATCA and FBAR works?

I can file MY income taxes as Married, but filing separate.

She doesn't bother with working, so she does not need to file income taxes, and thus not need to be subjected to FACTA and FBAR?

This is all very odd.

Firstly, I have no idea why idea why the existence of two irritating but minor bureaucratic reporting requirements would have an impact on your family's choice as to your wife works or not. Particularly since you would then have to file married but separate, which is likely to cost you a significant amount of money compared to filing jointly.

Secondly, while 8938 (FATCA) is not required if you don't have to file a tax return, the is no such such exception for FBAR. Everyone who has foreign assets over the threshold has to report them.

These forms are not as difficult as you seem to think. Sure, locating account numbers, maximum values and exchange rates is a hassle in the first year, but once you know what is needed, the account numbers are already there, you know where to find the other info, and it's simpler in following years. In addition, your wife can close most of the assets and move them to the US, so that they become non-reportable. This would remove or at least simplify the reporting requirement.

Edited June 20, 2014 by Owen_London

[Unknown Guest 15]

This is all very odd.

Firstly, I have no idea why idea why the existence of two irritating but minor bureaucratic reporting requirements would have an impact on your family's choice as to your wife works or not. Particularly since you would then have to file married but separate, which is likely to cost you a significant amount of money compared to filing jointly.

Secondly, while 8938 (FATCA) is not required if you don't have to file a tax return, the is no such such exception for FBAR. Everyone who has foreign assets over the threshold has to report them.

These forms are not as difficult as you seem to think. Sure, locating account numbers, maximum values and exchange rates is a hassle in the first year, but once you know what is needed, the account numbers are already there, you know where to find the other info, and it's simpler in following years. In addition, your wife can close most of the assets and move them to the US, so that they become non-reportable. This would remove or at least simplify the reporting requirement.

Most of her assets are ones she holds as joint with her dad....and really are just her dad's accounts. It seems troublesome to have to report something that while technically she is a joint holder on, but in reality is her dad's. I guess it would be easiest for her to just remove herself from all her joint accounts than to have to subject her family's money to the us govt for additional taxation when the money was already taxed when earned in her native country.

[Owen_London 65]

Most of her assets are ones she holds as joint with her dad....and really are just her dad's accounts. It seems troublesome to have to report something that while technically she is a joint holder on, but in reality is her dad's. I guess it would be easiest for her to just remove herself from all her joint accounts than to have to subject her family's money to the us govt for additional taxation when the money was already taxed when earned in her native country.

Yes, that would be the easiest way out. Bear in mind that the FBAR itself is for reporting assets, not tax due.

If she was tax resident in the US in 2013, though, she will still have to file an FBAR by next Monday. She will also have to file one for 2014 next year, too.

Edited June 23, 2014 by Owen_London

[BBCC 16]

Yes, that would be the easiest way out. Bear in mind that the FBAR itself is for reporting assets, not tax due.

If she was tax resident in the US in 2013, though, she will still have to file an FBAR by next Monday. She will also have to file one for 2014 next year, too.

Every year, once started? Or every year there after in which there are foreign assets totallying more than $10,000?

We just started doing this and were wondering.

[Owen_London 65]

Every year, once started? Or every year there after in which there are foreign assets totallying more than $10,000?

We just started doing this and were wondering.

Every year there are foreign assets of more than $10000. But remember that you are reporting for the previous tax year, so 30 June 14 is the deadline for reporting assets held in 2013.