Have a Tax Question? Ask a Tax Expert
Hi and welcome to our site!There are several issues to address...
First of all - your wife is not your dependent from tax prospective - but you likely filed a joint tax return - correct?
joined tax return
So - that interest income must be included into your joint tax return every year starting when you filed a joint tax return. You will need to amend your 2011 and 2012 tax return and add that missing income.If that interest income was subject of a foreign income tax - you may claim a credit.
Depending on your income level - you will calculate additional income tax liability - and penalty - the maximum is 25% on that additional tax liability. Plus interest charges ~4-5% annual rate.To amend your tax returns - use form 1040X - www.irs.gov/pub/irs-pdf/f1040x.pdfFile separate forms for each year.
What you are originally asked - is FBAR reporting requirements.If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing a Report of Foreign Bank and Financial Accounts (FBAR).United States persons are required to file an FBAR if:1.The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and2.The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.Here is the form - http://www.irs.gov/pub/irs-prior/f90221--2012.pdf
In this case i don't fall under this, but my wife falls under it?
in this case if i have an account less than $10,000 , i don't need to report that account interest only she need to report as she has more than $10,000
Yes - if that is your wife's account - she is required to file. Not you. And she will need to sign that FBAR form. The penalty for willful failure to file FBAR form is $10,000.Because you are filing late - I suggest to attach a letter with explanation of facts - mention that that is not willful failure - and you are filing as soon as you learn about filing requirements and you are making all steps to comply with IRS regulations this matter.Also mention that not reporting was not to avoid any tax liability - and all worldwide income was actually reported on your jointly filed tax returns.
So far - there are two main issues (1) reporting income from foreign sources on your tax return; (2) FBAR form that should be filed by your spouse only.
Sorry for your situation.Please take a look at 1040X and FBAR form - and if you need any help - be sure to come back.
i see fines from 10,000 up to 100,000 dollars but we did not about the rule FBAR. So when people get 100,000 dollar fine?