FBAR & greencard

[john_2015 0]

Hello and sorry if this is a stupid question but i just learned something calling FBAR filing, i am canadian citizen living in US as PR for last 2 years, i filed 1040form for last 2 years "Tax year 2015 & tax year 2016" eventhough i didnt make any income because i am a green card. 
i just became aware about FBAR and i do have canadian bank accounts with just a little bit over 10K, how do i file FBAR for 2015 since deadline is past due and for 2016 as well? 
am i in trouble? do i get any penalties??  

Thank you so much in advance

[john_2015 0]

I forgot to add that the canadian bank accounts are checking accounts with no interest, and i made 0$ income worldwide since i became PR

[Wuozopo 4,293]

FBAR is separate from your income tax, working, or the IRS. It's a report to the Treasury Department.  You do an online form and as I recall, you specify what year you are filing for when you start. So you can do it twice. They basically want to know the highest value in your account anytime during the year and the name and address of the bank. I think they may ask if you earned any interest that was not reported on your tax return. I forgot, it's been a year. Just read the instructions carefully as you proceed.

[john_2015 0]

Thanks Wuozopo for your quick response,

so i shall file delinquent FBAR for 2015 & mention i didnt know about it, i just realized i had a savings account in which i earned less than  30 CENTS the whole 2015.

when i filed taxes for 2015 Year i put in my income as 0$....i am guessing i have to modify that as well?

and modify 2016 tax which i already filed but i still have deadline till april 15, i might have earned about 40 CENTS of interest in savings account!

 

Edited March 16, 2017 by john_2015

[Wuozopo 4,293]

58 minutes ago, john_2015 said:

Thanks Wuozopo for your quick response,

so i shall file delinquent FBAR for 2015 & mention i didnt know about it, i just realized i had a savings account in which i earned less than  30 CENTS the whole 2015.

when i filed taxes for 2015 Year i put in my income as 0$....i am guessing i have to modify that as well?

and modify 2016 tax which i already filed but i still have deadline till april 15, i might have earned about 40 CENTS of interest in savings account!

 

You don't "mention" anything. It's an online form not an email or chat session. You won't get in trouble. Over a million are filed each year and a real person won't be combing through yours to nail you. Just file it or don't. I skipped the first year as well and many years have passed and nothing. 

 

If you have a checking and savings, then do report each account because it's the aggregate. Each one doesn't have to be over $10k.  I would personally skip the amending of your tax returns. I doubt it changes your tax owed, so it"s not like you are cheating them out of taxes.  The IRS rounds off cents, so 30 cents is kinda zero to them. 

[JDAR 2]

Just report FBAR for 2016. As already mentioned leave your tax returns alone. FBAR is completely separate from your tax return and is just a report sent online direct to the Treasury. 

[john_2015 0]

Thanks Wuozopo & JDAR,

I talked to IRS and they mentioned that i might need to submit schedule b Part3 as well although i might not need to amend my initial 1040EZ filing.....but one thing is that scheduleB form usually goes with form 1040 and not the 1040EZ i did 

[JDAR 2]

If I were you I would just file FBAR. I would still leave your tax returns alone. If you only earned 40 cent interest then it would be rounded down to zero by the IRS. Schedule B can only be sent with the full 1040 form so if you did choose to amend you would have to fill in the full 1040 along with Schedule B. Again if I were you I would just file FBAR.

[john_2015 0]

Thanks guys for the answers,

 

which currency rate shall i use for FBAR currency conversion from CAD to USD for 2015 & 2016? is it the one on the end of the year in both IRS/Treasury site? or shall i use the interest rate from sites such as XE for the day with the biggest amount?

[enigma992 45]

Does anyone know if foreign bank accounts closed before you become tax resident need to be reported. e.g. I may become US tax resident  in December if I get my Green Card by then. If I close my foreign bank accounts before the date I become US tax resident, do they still need to be reported?

 

And if I do, it actually would be beneficial to wait until January 1st to activate my green card at a point of entry as then I will be avoiding becoming a US tax resident in 2017 and will not need to report any accounts closed in 2017 nor will I need to do a US tax return for 2017?

[Wuozopo 4,293]

8 hours ago, enigma992 said:

Does anyone know if foreign bank accounts closed before you become tax resident need to be reported. e.g. I may become US tax resident  in December if I get my Green Card by then. If I close my foreign bank accounts before the date I become US tax resident, do they still need to be reported?

 

And if I do, it actually would be beneficial to wait until January 1st to activate my green card at a point of entry as then I will be avoiding becoming a US tax resident in 2017 and will not need to report any accounts closed in 2017 nor will I need to do a US tax return for 2017?

 

If you are a US resident in 2017, then you have an FBAR obligation to report the highest value in your accounts anytime during 2017. It doesn't matter if the account didn't exist December 31. It existed sometime during 2017. 

 

FBAR is no big deal. It is a REPORT. It is not a tax or something that costs you money. Don't let a simple online form dictate your moving date. 

 

Income tax tax is a totally separate issue. If you move in  December (for example) then will you get a US pay check before the end of 2017? If not, then you have no income to be taxed in 2017 so file no return. Only people earning over the threshold for their filing status file a return. Or they file just to get back money held out of their paycheck for taxes.  If you didn't earn enough to be taxed, then that tax estimate held out of the paycheck is not owed. They only way to get that back is file a return showing $0 tax owed, and $400 paid in. You over paid $400 and get a refund check.

 

Are you married to a US citizen? That is another tax scenario that can be beneficial to file 2017 jointly. But you don't even have to be moved to the US at all to file jointly with a US citizen spouse. 

 

 

Edited October 22, 2017 by Wuozopo

[enigma992 45]

1 minute ago, Wuozopo said:

 

If you are a US resident in 2017, then you have an FBAR obligation to report the highest value in your accounts anytime during 2017. It doesn't matter if the account didn't exist December 31. It existed sometime during 2017. 

 

FBAR is no big deal. It is a REPORT. It is not a tax or something that costs you money. Don't let a simple online form dictate your moving date. 

 

Income tax tax is a totally separate issue. If you move in  December (for example) then will you get a US pay check before the end of 2017? If not, then you have no income to be taxed in 2017 so file no return. Only people earning over the threshold for their filing status file a return. Or they file just to get back money held out of their paycheck for taxes.  If you didn't earn enough to be taxed, then that tax estimate held out of the paycheck is not owed. They only way to get that back is file a return showing $0 tax owed, and $400 paid in. You over paid $400 and get a refund check.

 

Are you married to a US citizen? That is another tax scenario that can be beneficial to file 2017 jointly. But you don't even have to be moved to the US at all to file jointly with a US citizen spouse. 

 

 

Thanks helpful. Not married to a US citizen, it is an employment based green card application.

 

My paycheck situation is somewhat complicated as I am self employed. I will probably receive payment for my November work in December and I think it would be enough to require filing a tax return. It may actually work in my favor though as it will taxed at a much lower rate as only 1 months income for 2017 in the US, then it would as the 12th month of income in Canada.

 

My plan is actually to enter the US to get the stamp in my passport and then fly home back to Europe for Christmas. I will then permanently "move" to the US in January. Is there anything I should be concerned about with this plan? Will this plan mean that I should be exempt from any state taxes in 2017 even if I do need to file a return, since I will not actually have a residence in any state.

[Wuozopo 4,293]

8 minutes ago, enigma992 said:

Thanks helpful. Not married to a US citizen, it is an employment based green card application.

 

My paycheck situation is somewhat complicated as I am self employed. I will probably receive payment for my November work in December and I think it would be enough to require filing a tax return. It may actually work in my favor though as it will taxed at a much lower rate as only 1 months income for 2017 in the US, then it would as the 12th month of income in Canada.

 

My plan is actually to enter the US to get the stamp in my passport and then fly home back to Europe for Christmas. I will then permanently "move" to the US in January. Is there anything I should be concerned about with this plan? Will this plan mean that I should be exempt from any state taxes in 2017 even if I do need to file a return, since I will not actually have a residence in any state.

 

Not seeing the exact dollars and cents of your whole employment situation, it is hard to say. But a US tax return for a self employed person adds on a schedule C and Schedule SE. I wouldn't bother getting into that  just for a fly in. You would end up paying a fortune to somebody to do your tax return for you. And figuring it out yourself would take many days/weeks of reading and studying tax publications for two countries and a state. Just making the break in 2018 sounds like the stress free answer since you have that option.

[enigma992 45]

26 minutes ago, Wuozopo said:

 

Not seeing the exact dollars and cents of your whole employment situation, it is hard to say. But a US tax return for a self employed person adds on a schedule C and Schedule SE. I wouldn't bother getting into that  just for a fly in. You would end up paying a fortune to somebody to do your tax return for you. And figuring it out yourself would take many days/weeks of reading and studying tax publications for two countries and a state. Just making the break in 2018 sounds like the stress free answer since you have that option.

What's a "fortune", ballpark figure? $1000, $5000, more? If I do enter the US in December, if I have stopped working as self employed and received all payments before entering the US and become tax resident, would I still need to file all that stuff for self employment work done before I became US tax resident?

 

Appreciate the help btw.

Edited October 22, 2017 by enigma992

[Wuozopo 4,293]

1 hour ago, enigma992 said:

What's a "fortune", ballpark figure? $1000, $5000, more? If I do enter the US in December, if I have stopped working as self employed and received all payments before entering the US and become tax resident, would I still need to file all that stuff for self employment work done before I became US tax resident?

 

Appreciate the help btw.

I do not know what  a tax accountant experienced with international situations would charge. I wouldn't trust that the H&R Block dude in the Walmart kiosk would have a clue how to do your return. My American wife has never had anybody do a tax return and did ours the year I immigrated as well as learned the self-employed requirements.  Fees are something we are not familiar with. Texas does not have a state income tax, so no experience with that either. Somebody else will have to answer the fee question. For us, it's $20 TurboTax software and lots of reading of actual IRS publications. Start with Pub 519 https://www.irs.gov/pub/irs-pdf/p519.pdf 

 

In general, the year you are a resident alien (greencard holder in your case) and have enough income to need to file a return, then your income for the entire 2017 is reported no matter where in the world you earned it. That does not mean it is taxed because there is foreign earned income exclusion or foreign tax credits,  but all worldwide income is reported. There may be something in the dual status year option to learn. So yes it gets complicated. Get you answers by reading that 67 page publication above because I have no experience with your exact situation. Also read the instructions for Form 1040 https://www.irs.gov/pub/irs-pdf/i1040gi.pdf which as a permanent resident is your form. That link is 2016 instructions, but the basic rules will be similar in 2017 when it is published.