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Dear Tax Talk,
I just moved to the USA March 15 with my E-2 investor visa. I did not file any personal tax return with the
IRS for the year 2007, because I got my first salary in this country in January 2008.
I have kept my bank account in my home country because I believe that at some point in the future
I will have to show the U.S. Citizenship and Immigration Services that I still have strong ties with my home country
(E-2 visa is a nonimmigrant visa). My question is: In my case, do I need to report to the IRS that I have a foreign
bank account before June of this year or before June 31, 2009?
-- Laurent
Dear Laurent,
U.S. citizens and residents can have a bank account anywhere in the world, including the notorious Swiss bank account.
There are no tax rules that prevent you from opening or maintaining a foreign bank account. However, as a U.S. citizen
or resident you are required to report the income on those accounts on your U.S. income tax return.
In addition to reporting the income on the accounts to the IRS, you need to disclose the existence
of the accounts to the Treasury Department. The Treasury Department is the IRS' boss.
Because you were not considered a resident of the U.S. during 2007, you are not subject to the reporting
requirements until 2009. When you have a financial interest in, or signature or other authority over a bank account,
securities account, or other financial account in a foreign country at any time during the tax year, you may have to
complete Treasury Department Form TD F 90-22.1,
Report of Foreign Bank and Financial Accounts.
The form should be filed by June 30 of the following year with the Department of the Treasury at the
address listed on the form. You need not file this form if the combined assets in the account(s) are $10,000 or less
during the entire year.
Report income from the foreign accounts on the appropriate schedules of your tax return, such as Schedule
B for interest and dividends. Part 3 of Schedule B also requires a disclosure of the foreign bank account. You should
include Schedule B with your annual income tax return if only just for the foreign bank account disclosure.
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