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OK, I have a question....  My husband and I are retired and living in Egypt...we live off of the interest in the bank.  Does not exceed $50,000.  we do not file income tax, because we have no income to claim.  Now our bank wants us to file a W9 form with them....I have no problem with that.. just wondering why now?

If someone can help me with this...please

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Interest paid on investments is regarded by many countries as income and subject to income tax.  The W9 form is sent out by the banks as a requirement of the IRS to find tax cheaters.  Sounds like they have found you!!

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If the bank asked you to fill out a W-9, I assume you are a U.S. citizen.  If you are a U.S. citizen, all of your investment income, no matter where earned, is subject to U.S. income tax.  You may be able to deduct taxes paid to a foreign government.  And where did you get the idea that interest earned from a bank is not income - it most certainly is!

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W-9 is so bank can comply, you may have to report if you have over $10,000US combined in all foreign accounts

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Income tax on interest or dividends earned on investments has nothing to do with FATCA or FBAR. FBAR filing is required if the total of financial assets in foreign accounts exceeds $10,000. There is a Pdf that you can complete on line and print off and sign and mail. FATCA has 2 reporting thresholds depending on whether you meet the definition of a foreign resident (resides no less than 330 days outside the US in any 12 month period). This is from the IRS's site:

Reporting Thresholds

Reporting thresholds vary based on whether you file a joint income tax return or live abroad. If you are single or file separately from your spouse, you must submit a Form 8938 if you have more than $200,000 of specified foreign financial assets at the end of the year and you live abroad; or more than $50,000, if you live in the United States. If you file jointly with your spouse, these thresholds double. You are considered to live abroad if you are a U.S. citizen whose tax home is in a foreign country and you have been present in a foreign country or countries for at least 330 days out of a consecutive 12-month period.

Taxpayers living abroad. You must file a Form 8938 if you must file an income tax return and:

  • You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year. These thresholds apply even if only one spouse resides abroad. Married individuals who file a joint income tax return for the tax year will file a single Form 8938 that reports all of the specified foreign financial assets in which either spouse has an interest. 
  • You are not a married person filing a joint income tax return and the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year. 

Taxpayers living in the United States. You must file Form 8938 if you must file an income tax return and:

  • You are unmarried and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year 
  • You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year. 
  • You are married filing separate income tax returns and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. For purposes of calculating the value of your specified foreign financial assets in applying this threshold, include one-half the value of any specified foreign financial asset jointly owned with your spouse. However, report the entire value on Form 8938 if you are required to file Form 8938.

 

There is an article in the current issue of the Guad Reporter that has some erroneous info, in particular, it says that property is counted along with financial assets in meeting the thresholds. That is wrong. Property is not counted.

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4 hours ago, bontepar said:

Uncle Sam will chase you around the globe to get your money that is why many Americans give up their citizenship!

Really? 

Out of 320 million citizens how many have given up their citizenship?

FYI,giving up your citizenship does not mean you have no US tax obligations.

I filed my FBAR online last week,it took me all of 20 minutes and didn't cost me a dime...

 

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2 hours ago, cbviajero said:

Really? 

Out of 320 million citizens how many have given up their citizenship?

FYI,giving up your citizenship does not mean you have no US tax obligations.

I filed my FBAR online last week,it took me all of 20 minutes and didn't cost me a dime...

 

In 2015 4,279 Americans renounced their US citizenship.  The population of the US in July 2015 was 321,442,019 (I don't believe that includes US citizens living abroad.)  While 2015 saw the highest number of US citizens renouncing their citizenship, statistically .0001331% actually did that in 2015.  I'd say that I not "lots."  I would assume that you must be a citizen of another country to renounce US citizenship.  The US has the highest cost in the world to renounce US citizenship at $2,350.   It's illegal to give up U.S. status to dodge paying a tax bill -- and doing so doesn't mean authorities won't come looking for back taxes.

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IF your income from foreign banks is 50,000 per year,

You probably need to fill in a few more forms for the feds - and maybe a state or two.....

I wouldn't mind a few hours of work to get 50,000 income per year.

And I wouldn't mind paying some taxes on it.

Give your principal away - and poof - no more forms and no more taxes....

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