Frequently Asked Questions
1) Late Filing of Tax Return
In September 2012, the IRS published “simplified procedures” for Americans who haven’t filed their taxes for years.
The plan allows taxpayers to file tax returns for the last three years, as well as foreign bank account records for the last six years. If they meet certain requirements, they will also submit a two-page questionnaire to the Treasury.
It depends on your circumstances. Some people cannot participate in the simplified program. The IRS requires taxpayers to file all undeclared tax returns.
For more information, please contact our tax experts.
2) Financial Bank Account Report (FBAR)
If you have $10,000 or more of consolidated assets in a foreign bank or financial institution, you must file a foreign bank account report.
Form 8983 reports your foreign bank accounts.
Individuals who must file Form 8983:
- A single individual American living abroad and has the total value of specified foreign assets is more than US$200,000 on the last day of the tax year or more than US$300,000 at any time during the year.
- Married Americans (joint return) living abroad and have the value of specified foreign assets is more than US$400,000 on the last day of the tax year or more than US$600,000 at any time during the year.
- Unmarried Individuals who live in the US and have the total value of specified foreign financial assets is more than US$50,000 on the last day of the tax year or more than US$75,000 at any time during the tax year.
If you have combined assets of US$10,000 or more in foreign banks and or financial institutions, you must file a Foreign Bank Account Report.
Financial accounts outside the United States include any overseas bank securities, securities derivatives or any financial instrument. This would also include mutual funds, foreign pensions such as Hong Kong’s Mandatory Provident Fund (MPF) and pension accounts.
3) United States Tax Deadlines Dates
- Tax Filing Deadlines for the US Taxpayers*
- Tax Payment Due Deadlines
- Tax Extension Deadlines for the US Taxpayers*
- Tax Filing Deadlines for Overseas Taxpayers
- Tax Extension Deadlines for Overseas Taxpayers
- Tax Filing Deadlines (Only when tax extension has been requested and filed.)
* NOTE: The 2020 Year Tax Filing Deadlines and Tax Extension Deadlines have been extended to May 17, 2021.
4) Coronavirus-related relief for retirement plans and IRAs
In general, section 2202 of the CARES Act provides for expanded distribution options and favorable tax treatment for up to $100,000 of coronavirus-related distributions from eligible retirement plans (certain employer retirement plans, such as section 401(k) and 403(b) plans, and IRAs) to qualified individuals, as well as special rollover rules with respect to such distributions. It also increases the limit on the amount a qualified individual may borrow from an eligible retirement plan (not including an IRA) and permits a plan sponsor to provide qualified individuals up to an additional year to repay their plan loans. See the FAQs below for more details.
You are a qualified individual if –
- You are diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention;
- Your spouse or dependent is diagnosed with SARS-CoV-2 or with COVID-19 by a test approved by the Centers for Disease Control and Prevention;
- You experience adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to SARS-CoV-2 or COVID-19;
- You experience adverse financial consequences as a result of being unable to work due to lack of child care due to SARS-CoV-2 or COVID-19; or
- You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19.
Under section 2202 of the CARES Act, the Treasury Department and the IRS may issue guidance that expands the list of factors taken into account to determine whether an individual is a qualified individual as a result of experiencing adverse financial consequences. The Treasury Department and the IRS have received and are reviewing comments from the public requesting that the list of factors be expanded.
A coronavirus-related distribution is a distribution that is made from an eligible retirement plan to a qualified individual from January 1, 2020, to December 30, 2020, up to an aggregate limit of $100,000 from all plans and IRAs.
No, the 10% additional tax on early distributions does not apply to any coronavirus-related distribution.
The distributions generally are included in income ratably over a three-year period, starting with the year in which you receive your distribution. For example, if you receive a $9,000 coronavirus-related distribution in 2020, you would report $3,000 in income on your federal income tax return for each of 2020, 2021, and 2022. However, you have the option of including the entire distribution in your income for the year of the distribution.