Trump said he will raise tariffs on $250 billion in Chinese goods to 30% and hike duties on another $300 billion in products to 15%.Politicsread more
Stocks dropped after Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China.US Marketsread more
The final week of August could be highly volatile as markets fret over the economy and the latest developments in trade wars.Market Insiderread more
Federal Reserve Vice Chair Richard Clarida said Friday that the global economy has deteriorated in the past month.Marketsread more
The latest escalation in the trade war ups the odds the economy will fall into recession and that the Fed will aggressively cut rates.Market Insiderread more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
"We don't need China and, frankly, would be far better off without them," Trump tweeted.Politicsread more
Recent trade friction between the two Asian powerhouses has morphed into a dispute with political implications that go far beyond the region.Asia Politicsread more
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" Trump wrote amid a series of tweets that rattled markets Friday.Politicsread more
"I would love this to be clarified. We come to a deal on trade, boy, this market is up 10 to 15%, but without it's going to be worrisome," Jeremy Siegel says.Marketsread more
Tesla solar energy systems reportedly ignited at an Amazon warehouse in Redlands, California last June, and the Seattle e-commerce titan confirmed that it has no further plans...Technologyread more
We get it. People with millions of dollars sometimes like to hide the money overseas.
Naturally, the government frowns on tax evasion. Following the financial crisis, Congress in 2010 enacted the Foreign Account Tax Compliance Act, also known as FATCA.
FATCA works through "dual reporting": Other countries agree to report on the assets held by U.S. account holders. These account holders, in turn, must report to the IRS that they have money in foreign bank accounts each year when they file their taxes, says Katelynn Minott, a CPA and expatriate tax specialist with Bright!Tax.
Some people are unhappy with the requirements. Edd Staton, an expat retiree who lives in Ecuador, said FATCA was intended to reel in "big-league tax evaders stashing money offshore."
Problem is, according to Ed Slott, CPA and founder of Ed Slott and Co., "they cast such a wide net … they catch the little fish — people who weren't doing anything wrong."
A client of Slott's was caught up in an IRS audit and faced stiff penalties about a year ago after having neglected a small but crucial part of his tax return. Slott says the client hadn't told his accountant he had a bank account with about $3,500 in a foreign country.
As Slott explains, Schedule B asks you to disclose whether you have a bank account in a foreign country. "Almost every tax program defaults to 'No,' " Slott said.
You must tell the government that you have this account, no matter how small, Slott says. "There's nothing wrong with having the account," he said. "It's not disclosing it" that can cause problems.
And it did cause problems for Slott's client. The penalties were massive, and the issue was solved only with the intervention of an attorney experienced in the tax situations of people who live out of the country.
How much you earn in income and how much you hold in assets help determine your filing requirements.
Americans living abroad must still file a U.S. tax return, says Minott. "It doesn't matter where you live, if you pay foreign taxes or if the U.S. has a tax treaty with their country of residency," she said.
As well as your Form 1040, there are often additional forms — for the foreign earned income exclusion, or the foreign tax credit form.
If you receive only Social Security and have no other income anywhere in the world, it's possible you do not require a tax return, regardless of where you live, according to Minott.
Minott says that if you are a single taxpayer who lives in, say, New Jersey and has a U.K. bank account worth more than $50,000, "you must file Form 8938 and the FBAR disclosure " for foreign bank and financial accounts.
It pays to be scrupulous in your tax reporting and requirements. As Staton points out, if "you can't afford to live in the U.S. because of the high cost of health care, taxes, among other costs," the last thing you want is to then incur penalties from the IRS.
Staton, the author of three books on retiring overseas, is dedicated to making this idea a part of the national conversation. "Choosing this path for many baby boomers may be the best or only viable option to rescue their retirement," he said.
Slott recommends using a CPA. But first, he cautions, ask if the professional has experience with FBAR rules and what you need to disclose to the IRS to keep you out of trouble.
"In people's heads, they want to keep it secret," Slott said. But "when you're a U.S. citizen, you pay tax on your worldwide income. It's all about disclosure."
Another client of Slott's inherited a large bank account in Europe. "He had to pay a fortune in penalties," Slott said. "Even with a good law firm.
You must disclose and you must be honest, Slott says. "Don't think anything is too small for the IRS," he said. "The form says any assets – not any amount [of assets]."
Most developed countries agreed to comply with FATCA, so check to see if the country you're interested in retiring to participates.
(Correction: An earlier version of this story incorrectly said the IRS created FATCA.)