Understanding Tax Regulations and FBAR
The lure of wider market, larger customer base and better opportunities is what makes the global enterprises across borders. The professional workforce are either personals who have followed their aspirations of working with best of facilities, world-class infrastructure, exceptional work environment and a huge pay packet or those who have been deployed overseas. Nevertheless, every country has tax regulations that it expects its citizens, business enterprises and workforce to be compliant with.
The United States government has tax regulations in place for the people residing in the country. Under the US laws, every individual irrespective of being an US citizen or a green card holder has to file a FBAR (Foreign Bank Account Reporting) form. This is a form specified by the US government and has to be filed by every US persons about the financial status of the individual or business enterprise outside the United States of America. Taxes are filed for every calendar year and besides filing of tax returns, the US government requires that every individual provide details of bank accounts, fixed deposits as well as mutual funds or any other financial arm with signatory powers.
Further, undisclosed foreign bank accounts may lead to a case of willful defaults that are likely to face criminal charges. Voluntary disclosure of all financial statements under the Overseas Voluntary disclosure will help individuals to be compliant with the regulations and also avoid any civil penalities. Besides this, with number of offshoring and outsourcing involving freelancers, the United States have started the the Offshore Voluntary disclosure program or OVDP with objective of bringing taxpayers who evade taxes without disclosing their foreign accounts or entities. The penalties of which includes payment of a maximum penalty of 27.5% of the highest aggregate balance for a period of eight years prior to disclosure besides back taxes and delinquency penalties.
With tax laws remaining the same irrespective of the individual’s profession or size of business, Tax planning becomes an important aspect of financial success. The financial success however depends on the ability to use the legal technicalities to one’s advantage. A number of tax planning services are today available to help businesses and individuals with their finances.. Availing the tax planning services of a tax consultant or a financial expert will help individuals and enterprises to use the laws and legal technicalities to ones benefit.
As financial writer J.K.lasser defined -“Tax planning is the search for alternatives, all of which have the blessing of good accounting, of the tax law and the courts.”, the tax consultants play a major role the life of a professional. The ability of the tax consultant lies in understanding every client’s requirements and the changing tax regulations whether it is to advise on FBAR or efficiently distinguishing between reducing tax burden and complete tax evasion. Besides, the they also provide complete insight into the tax code that is applicable to United States residents which includes Green Card Holders and US Citizens.
Read More About: Foreign Bank Account, FBAR
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