U.S. TAX GUIDE IN SAUDI ARABIA
What does FBAR require?
If you’re a US person (including green card holders and tax residents) and have foreign bank accounts exceeding $10,000 at any time during the year, you need to file an FBAR (Foreign Bank and Financial Accounts Reporting). This includes all accounts, even those with a zero balance.
Does FBAR involve taxation?
No, FBAR is solely for reporting purposes. However, any income earned in those accounts must be reported on your 1040 tax return.
What is FATCA?
FATCA (Foreign Account Tax Compliance Act) mandates foreign banks to report US account holders to the IRS. It involves filing Form 8938 with your tax return if your foreign assets exceed certain thresholds.
Do banks report my information to the US?
Yes, banks report account information to comply with FATCA. You must file both FBAR and Form 8938 to stay compliant with US laws.
What if I miss the filing deadline?
If you miss filing, consult a tax advisor. They can help you use IRS amnesty programs like the Streamlined Filing Compliance Procedures to catch up without severe penalties.
What are the key points to remember about FBAR and FATCA?
- Mandatory Reporting: US expats must file FBAR and FATCA forms.
- Account Totals: Combine the highest balances of all foreign accounts; if over $10,000, you must report.
- Seek Advice: Tax professionals can help you navigate these requirements.
Why is this important in Saudi Arabia?
As a US citizen or green card holder in Saudi Arabia, you must comply with FBAR and FATCA regulations to avoid penalties and ensure transparency with the US government.
Are there additional tips I should be aware of?
- Keep Records: Document account balances and income.
- Understand Forms: FBAR is filed separately, Form 8938 with your 1040.
- Observe Deadlines: FBAR is due April 15, with an extension to October 15. FATCA follows your tax return schedule.
- Stay Updated: Tax laws change, so stay informed to maintain compliance.
