Special REporting Obligations
Different rules may apply if you are a working in the U.S. for a foreign government or international organization. Your wages for this work may be exempt from U.S. tax under an income tax treaty or U.S. law. You will need to check your specific situation.
If you are an athlete or entertainer performing independent personal services in the U.S., you will generally report all of this income and pay tax on it in the U.S. However, special withholding rules apply to this type of income and individual.
If you own an interest in a foreign company or have certain foreign assets, you will need to file additional forms reporting these foreign items.
Annually, you will need to report all bank and security accounts for which you have an interest or signature authority if the aggregate total of these accounts exceed $10,000 USD at any time during the calendar year. This is commonly called the FBAR report. This includes pension accounts in which you direct the investments and foreign issued life insurance or annuity contracts with a cash value. The reporting on FinCEN’s Form 114 must be made electronically through FinCEN’s BSA E-Filing System by June 30 for the prior calendar year.
Additionally, with your income tax return, you must file Form 8938, Statement of Specified Foreign Assets. This form may include all of the items filed with FinCEN on Form 114 and some additional items. The reporting threshold for Form 8938 is $50,000 USD on the last day of the tax year or $75,000 at any time during the tax year. For married individuals filing jointly, these amounts are doubled. Additional items included on this form are foreign stock or securities not held in a financial account, ownership in other foreign entities, and contracts with foreign persons.
If you own more than 50% or with other U.S. persons own over 50% of a foreign corporation or partnership, you will need to gather information about the business and its financial records to report on Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations or Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships. These forms can also be required if you own 10% or more and there are other U.S. owners or you contributed money or property to the entity in excess of $100,000 USD. The penalties for failing to file these forms are automatically $10,000 USD.
An excellent place to start researching the current information on these subjects is www.irs.gov/Individuals/International-Taxpayers/Taxation-of-Resident-Aliens.
If you are an athlete or entertainer performing independent personal services in the U.S., you will generally report all of this income and pay tax on it in the U.S. However, special withholding rules apply to this type of income and individual.
If you own an interest in a foreign company or have certain foreign assets, you will need to file additional forms reporting these foreign items.
Annually, you will need to report all bank and security accounts for which you have an interest or signature authority if the aggregate total of these accounts exceed $10,000 USD at any time during the calendar year. This is commonly called the FBAR report. This includes pension accounts in which you direct the investments and foreign issued life insurance or annuity contracts with a cash value. The reporting on FinCEN’s Form 114 must be made electronically through FinCEN’s BSA E-Filing System by June 30 for the prior calendar year.
Additionally, with your income tax return, you must file Form 8938, Statement of Specified Foreign Assets. This form may include all of the items filed with FinCEN on Form 114 and some additional items. The reporting threshold for Form 8938 is $50,000 USD on the last day of the tax year or $75,000 at any time during the tax year. For married individuals filing jointly, these amounts are doubled. Additional items included on this form are foreign stock or securities not held in a financial account, ownership in other foreign entities, and contracts with foreign persons.
If you own more than 50% or with other U.S. persons own over 50% of a foreign corporation or partnership, you will need to gather information about the business and its financial records to report on Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations or Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships. These forms can also be required if you own 10% or more and there are other U.S. owners or you contributed money or property to the entity in excess of $100,000 USD. The penalties for failing to file these forms are automatically $10,000 USD.
An excellent place to start researching the current information on these subjects is www.irs.gov/Individuals/International-Taxpayers/Taxation-of-Resident-Aliens.