Working overseas is a great experience. Along with the cultural experience it brings, working abroad is a sure fire way for an employee to earn a promotion once he or she returns home to the U.S.
The arrangement also establishes the U.S. company as a true international player. In today’s globalized economy, nothing beats that kind of exposure.
With more U.S. companies sending their employees abroad, however, it’s not an unusual for both U.S. companies and employees to get lost in the ticket of foreign and domestic tax laws.
That’s why it’s particularly important that all U.S. companies and their overseas employees know about the Foreign Bank and Financial Accounts Report (“FBAR”),now required by the IRS. While the rule is fairly straightforward, here are the 3 things you need to know:
1. Must Report Amounts Exceeding $10,000.00 at Any Time of Calendar Year
The new rule, enacted this week, requires U.S. citizens to report to the IRS any foreign bank account(s) that exceeds the equivalent of $10,000.00 at any time during the 2010 calendar year.
2. Must Report Even If Average Balance Fell Below $10,000.00
The new rule applies even if the average account balance fell below $10,000.00. The requirement also applies if the U.S. account holder has more than one account and the combined total of the accounts is ever greater than $10,000.00.
3. Report Due No Later than June 30th of Every Year
The report is due no later than June 30th of every calendar year going forward. This means that you’ll need to report the foreign account (s) to the IRS every year that the account(s) exceed $10,000.00 at any point during the calendar year.
For more information on the new reporting requirement, please visit the IRS FBAR website.