Income generated in offshore bank accounts is taxable in the US. In short, if your money is earning interest or dividends in another country, those funds are taxable. If you made an error on a tax return or forgot to include this income, a skilled Richmond offshore account lawyer can help you through this complicated audit process.
The seasoned tax attorneys at Whiteford Tax Defense are ready to stand up for your rights and protect your assets. We have handled plenty of IRS audits for both individuals and organizations with offshore accounts. We look forward to earning your business with our tireless attention to detail and outstanding customer service.
Nearly all income an individual or organization earns is considered taxable in the US. This is true of offshore savings accounts, certificates of deposit (CDs), and trusts.
While it would be difficult for the US to remove funds from an offshore account, the interest, dividends, or other income earned by an offshore account are usually taxable, according to the IRS. Some individuals knowingly avoid reporting this income, and others simply forget. Either way, they should contact a Richmond offshore account attorney for the best possible outcome of an IRS audit.
Historically, many high-net-worth individuals chose Switzerland for their offshore banking thanks to the nation’s reputation for security, stability, and privacy. Still, it does not matter where your money resides; the income it generates is taxable for US citizens and residents.
Other popular nations for offshore investing include:
This can change quickly, though, depending on politics and events on the world stage. When a nation seems to be preparing for war or when other political issues make investors uneasy, they are more likely to move offshore funds from one nation to another. This is a good time to contact an attorney to ensure that incomes are reported correctly to the IRS.
US residents and citizens must report offshore banking income electronically using an FBAR form. This is also true of joint accounts.
All individuals on a joint account must report the full amount of the account and income generated to the IRS. The amount is converted to US dollars based on currency valuations on December 31 of a given year, and that amount is reported by April 15 of the following year.
If an individual needs an extension, the automatic extension for FBAR is October 15. They do not need to file an extension, but they may pay extra interest on funds not paid to the IRS by April 15.
Spouses may or may not need to file FBARs, depending on the names on the account and the couple’s filing status. Children or their guardians must also file FBARs; they are not exempt.
Form 8938 is usually needed for individuals with offshore funds. This form must be filed with one’s income taxes.
If an individual, family, or organization needs assistance with any of these documents, they should contact a skilled offshore account lawyer in Richmond.
If you failed to report offshore income or recently inherited offshore accounts, contact a Richmond offshore account lawyer today. The experienced team at Whiteford Tax Defense is ready to help identify your assets and present your case to the IRS in the best light possible.