U.S. Tax Obligations on Foreign Income & Assets
All U.S. taxpayers—including citizens, permanent residents, and tax residents—are legally required to report their worldwide income on their U.S. tax return, regardless of where they live or whether they file in another country. At Prestivo Tax, we help you navigate this global reporting landscape, leveraging tax treaties and foreign tax credits to minimize your U.S. tax liability where possible.

FinCEN Form 114 (FBAR)
If the total balance of your foreign financial accounts exceeds $10,000 at any point during the year, you must file a Report of Foreign Bank and Financial Accounts (FBAR), also known as FinCEN Form 114. This is a separate disclosure filed electronically with the Financial Crimes Enforcement Network (FinCEN)—it is not submitted with your tax return.

Due Date: April 15 (with an automatic extension to October 15).

Our Service: Prestivo Tax has extensive experience preparing and e-filing FBARs through the secure FinCEN BSA system. We ensure accurate reporting of all qualifying accounts to help you stay compliant.

Form 8938 (FATCA Reporting)
In addition to the FBAR, you may need to file IRS Form 8938, Statement of Specified Foreign Financial Assets, with your federal income tax return. The reporting thresholds for Form 8938 are generally higher than the FBAR and depend on your filing status and residence.

Purpose: This form is part of the Foreign Account Tax Compliance Act (FATCA) and often requires similar information as the FBAR, plus details on additional foreign assets.

Global Cooperation: The U.S. Treasury has established intergovernmental agreements with numerous countries to exchange financial account information automatically, making compliance essential.

Foreign Currency Conversion
Converting foreign income, account balances, and asset values to U.S. dollars is a critical step in accurate reporting.

For FBAR & Form 8938: You must use the U.S. Treasury Financial Management Service exchange rate for the last day of the tax year.

For Income & Deductions: The IRS does not prescribe an official rate but requires a consistent, reasonable method. The general rule is to use the exchange rate in effect on the date you receive, pay, or accrue an item.

Currency fluctuations can introduce complexity into your tax preparation. Prestivo Tax helps you apply the correct rates consistently, ensuring your reporting is both accurate and defensible.

How Prestivo Tax Can Help
Navigating foreign income reporting, FBARs, FATCA, and currency conversion requires specialized knowledge. Our team provides comprehensive guidance to:

• Determine your filing requirements for worldwide income, FBAR, and Form 8938.
• Prepare and e-file all necessary disclosures accurately and on time.
• Apply optimal currency conversion methods and leverage available tax treaties.
• Ensure full compliance amidst evolving international tax agreements.

Let Prestivo Tax bring clarity to your global tax obligations. Contact us to secure compliant and strategic handling of your international reporting needs.