FACTA - Greencard

[MJ Sally]

Me (US Citizen)
Wife (Greencard)

I used to work abroad and always filed my FBAR while filing as Married Filing Separately (MFS). I've been married to my wife for over 10 years. I returned to the U.S. in November 2023 and worked part-time for a U.S. company. I filed my 2023 taxes as MFS and used the Physical Presence Test, covering the period from November 2022 to November 2023.

To the best of my knowledge, since I qualified for the Physical Presence Test, I didn’t need to file Form 8833 because my foreign bank account balance was less than $100K.

In January 2024, my wife arrived in the U.S., received her green card, and got her SSN a week or two later. My question is: Did my wife need to file FBAR or FATCA when she wasn’t a U.S. resident before 2024?

Before 2024, I always filed as MFS, listing her name with "non-resident" next to it, and the IRS accepted our returns without issue. However, she has over $200K in her foreign bank account, and I’m getting worried about potential penalties. BTW, together, we have less than $300k and we don't share the same account.

Also, I have never owed taxes to the IRS because I always earned less than $100K while living and working abroad.

[pk]

@MJ Sally , hope you mean form 8938 -- Specified  Foreign Assets  Reporting.

(a) The FBAR and FATCA regs apply only to a US person ( citizen/GreenCard /Resident for Tax purposes ).

(b) Note that the trigger values are generally based on the last day of the year ( and yes there is also a "but" in it ).

(c)  Your wife's residency ( US personhood) starts from the day she was admitted with the GreenCard  or the first day here legally whichever is  first ( under GreenCard test ).  So it is essentially for the whole of 2024..  Thus  , and absent any other or treaty considerations , she was not subject to FBAR/FATCA  till then.

However, note that there is no tax consequences  of reporting FBAR/ FATCA but willful   disregard of the  law is heavy penalized.

Is there more I can do for you ?

[MJ Sally]

@pk 

So I'm guessing my wife and I didn't need to file form 8938 before 2024?

Please note: I came back to the US in November 2023, worked part time in the US, and claimed foreign exclusion using the physical presence test from November 2022 to November 2023. Before December 2023, I had over 50K in my foreign bank account. Does FACTA affect me because I lived in the US from November to December 2023?

[MJ Sally]

@pk 

So I'm guessing my wife and I didn't need to file form 8938 before 2024?

Please note: I came back to the US in November 2023, worked part time in the US, and claimed foreign exclusion using the physical presence test from November 2022 to November 2023. Before December 2023, I had over 50K in my foreign bank account. Does FACTA affect me because I lived in the US from November to December 2023?

[pk]

@MJ Sally ,  instead of my paraphrasing, here is the "horse's mouth " version from the IRS -->

Summary of FATCA reporting for U.S taxpayers | Internal Revenue Service

As I said earlier there is NO Tax Consequence  in filing FBAR and FATCA forms  --- when in doubt just file the  thing.   Your foreign banks / financial institutions, all are required to  report details of holders  ( with SSN  or ITIN ) accounts.  I am sensing ( perhaps wrongly ) that there is some reticence in  exposing your affairs to the IRS -- they already probably have a lot of that anyways ( through govt.  to govt money laundering  regs  & KYI intiatives) .

That is of course my personal opinion.

Is there more I can do for you ?

[MJ Sally]

@pk 

Thank you. I'm not trying to hide anything from the IRS. I just didn't know anything about FATCA. When I opened those foreign account. Also, the foreign bank needed my SSN.

I was more worried about any possible fines that I can get anything before 2024. But from what I read and your response, My wife and I are safe because my wife was not a resident and while I was living abroad, I was below (Less than 100K...MFS and living abroad) the threshold to file form 8938 

However, for the 2024 taxes, we have to file because we went over the threshold.

If I mistaken anything that you wrote, please let me know. I truly appreciate your response. Also, thank you for the article.

  

[pk]

@MJ Sally  all is good.  Thank you your patience.