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Fbar Implications & Efficient Tax Planning
FBAR is a reporting requirement under the Bank Secrecy Act in USA. There are numerous questions pertaining to the fact whether there would be any tax implications in the USA on the foreign sourced income from the accounts under the plan. Under this plan there are certain categories of people who are required to report the income generated from FBAR in his federal tax returns in the USA. The categories include the following:
* US citizen residents in USA
* H1B visa holders who are staying in the USA for more than 183 days in a calendar year
* Green Card holder residents in USA
For the entire above mentioned category, the income generated from the foreign accounts reported in FBAR is considered taxable in the USA as per the IRS Amnesty. The penalty in case of non-filing cases would be according to the US tax laws. The other pertinent question in this regard is that whether the benefit accrued under the DTAA i.e. Double ...
... Taxation Avoidance Agreement between the US and other country can be available to the person where their foreign income is taxed in the US. The answer to this is that the credit of the taxes paid in a foreign country concerning the foreign income will be available in US against the tax liability.
In order to systematically report FBAR and avert the penalty chances, it is essential to join hands with an able tax planning agency that would offer individuals an in-depth insight into the tax codes that is applicable to the resident individuals in the US, US citizens and the Green Card Holders. It also helps individuals in with:
* Complete compliance
* Consult and impact analysis
* Analysis and planning to minimize FBAR Penalty
* AMT Strategies and Foreign Tax Credit
* Mutual Fund or PFIC computations
* Preparation of forms required to participate in the OVDP program
* Preparation of Tax Amendments and Delinquent FBAR
* IRS Representation by Enrolled Agents or Affiliated CPAs and Attorneys
Furthermore with regards to the exemption limits for foreign income in India for the US citizen resident in USA, Green Card Holders resident in USA, H1B visa holders resident in USA, US Citizen Resident outside USA depends mostly on the type of tax filing that they pertain to as per the federal tax returns. However it is essential to note that the exemption from tax is available up to USD 70,000/- to the US citizen residents residing out of the USA for the income generated outside USA.
Read More About: Foreign Bank Account
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