Understanding your Tax Obligations if You Have Foreign Assets

If you have foreign assets or you are considering purchasing foreign real estate, it is important to be aware that as a U.S. citizen, you may still have tax liability and filing obligations. This remains true even for those individuals with dual citizenship, according to the Internal Revenue Service.

The filing deadline for U.S. citizens who live overseas is June 16, 2014. The normal extended due date this year falls on a Sunday, meaning that eligible taxpayers receive an additional one-day extension. In order to take advantage of the automatic two-month extension, it is necessary for taxpayers to submit a statement along with their tax return explaining their particular situation.

In addition, non-resident aliens receiving income from sources in the United States last year will need to make a determination regarding whether they have a U.S. tax obligation. Depending upon the source of the income, the filing deadline for non-resident aliens may be either on April 15 or June 16.

Resident aliens and U.S. citizens are required by federal law to report any income received from foreign bank and securities accounts and foreign trusts. Generally speaking, taxpayers affected by such requirements will need to complete and submit a Schedule B along with their tax return. Depending upon their individual situation, taxpayers may also be required to complete and submit a Statement of Foreign Financial Assets. In most instances, U.S. citizens must submit the Statement of Foreign Financial Assets if the aggregate value on their assets is greater than specified thresholds.

Although tax obligations regarding foreign assets can be somewhat confusing, taxpayers living abroad may take advantage of specific software to assist them in determining their tax obligations and ensuring that their taxes are filed appropriately. Taxpayers may also choose to use IRS Free File to prepare and file their returns electronically free of charge.


  • Reference: http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free

Daveed Hollander

With over 2 decades of doing business in Costa Rica real estate industry Daveed Hollander is a trusted realtor for the southern pacific region of Costa Rica. Delivering a professional and tailored service Daveed offers you a wide ranging portfolio of quality properties. With an in-depth knowledge and a genuine appreciation for the area, he enthusiastically supports sustainable development in the southern pacific. A respected and active participant in the local community Daveed and his family reside in Dominical. Fluent in English and Spanish, Daveed has established regional connections and excellent communication skills allow him to successfully identify valid and authenticated investment opportunities. Well known for his friendly and genuine approach your search for a potential property is benefited by his conscientious and detail orientated service.