June News Letter

I cannot believe June is here already – kids are out of school, summer vacations are well in swing, and I hope you are all enjoying your summer …

Below is a list of hot tax topics.  We hope you find the information helpful and useful.

INDIVIDUAL INCOME TAX – JUNE 15th EXTENSION

Taxpayers who live outside the United States and Pureto Rico and whose main place of work is outside the United States, have an automatic extension of time to file until June 15th to file their US individual tax returns.

This June deadline also applies to those in military service on duty outside the U.S., but not in a combat zone or a qualified hazardous duty area.  (A special longer extension applies to those individuals.)

Taxpayers with a June deadline can file a Form 4868 by June 15th to get an additional four months to file.  Mererly being outside the United States on the April deadline does not give a person an extension to June 15th.

Please understand this is only an extension to file your returns and this is NOT an extension of payment.  That is, if there is a balance due with your tax returns, penalties and interest will continue accruing.  Therefore, we request you provide your information as soon as possible and we will file your returns as soon as possible.

FOREIGN BANK ACCOUNT RETUNS – JUNE 30th DUE

The Individual U.S. person’s Foreign Bank Account Return (FBAR) is due June 30, 2012 for the 2011 calendar year and there are no extensions to delay filing.

Further, this is not your Individual Income Tax Return (Form 1040).  The FBAR is a report of your foreign (i.e. non-US) bank accounts.  We often prepare this return along with the individual INCOME tax return but these are two separate returns sent to 2 separate tax authorities.

United States persons are required to file an FBAR if:

1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and

2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year.

You can read more about the FBAR here - http://www.irs.gov/businesses/small/article/0,,id=148849,00.html

Here is a link to the Form TD F 90-22.1 – http://www.irs.gov/pub/irs-pdf/f90221.pdf

Failure to file could include penalties of $10,000 per account not reported and/or jail time.

If you need assistance filing this return, please contact our office asap.

As always please feel free to contact us if you have any problems, questions, or concerns.