When it comes to bank accounts, you might have heard about best current accounts, savings accounts and many more. But there is something called as the offshore bank accounts and foreign bank account reporting as well. Let us know better about these 2 accounts in this article.
Offshore Accounts: The offshore bank accounts are getting very popular these days among the multi-national businesses. They have become familiar globally. These kinds of accounts help you in protecting the assets and you can find better opportunities of investments with it. It helps your business grow smoothly. To select the best offshore account, you will have to consider the below points:
- First and foremost is to look for the bank’s credibility. Make sure that the bank is completely reputed and established.
- Find out if the specific bank you choose, has operational experience internationally. There should be proven record in the offshore management.
- You will have to check if the bank is offering multi-currency facility as well as quick transfer in currencies.
- You need to go with the institutions that does not require for detailed information on credit.
The offshore account is a better option for saving huge taxes. The concept behind these accounts is to provide protection on the wealth as well as assets. It helps businesses to develop business in private and confidential manner. Business giants always choose these types of accounts because they might be asked to pay certain exorbitant amount on the assets in the country in which they reside. You need to choose the service provider who offers enticing tax benefits.
Foreign bank account reporting (FBAR): If you are someone owning a foreign bank account, then you might have known what a FBAR is. If you really don’t know what it is, then you can know it. A FBAR is none other than the regulation which is required to meet the terms, if you possess a foreign bank account. It is a report that contains info about foreign account you hold along with the transactions conducted. It is not mandatory to file the FBAR report if you have a foreign account unless the aggregate balance does not exceed $10000. It is exceeds this limit, then it becomes mandatory to file the FBAR report. If you fail to file this report besides exceeding the aggregate balance, then you will have to face the consequences of the law. You will be subjected to strict fines as well as penalties by IRA- Internal Revenue Service. It can also involve jail time. The law behind the requirements of FBAR is BSA (Bank Secrecy Act). It requires an individual to report the financial activity annually to IRA via TD F 90-221 form.
The FBAR form is necessary because the world is big and US government cannot maintain everything and this is why they have bought this form to the public holding the foreign accounts. The main purpose behind this is that people can report all their financial activity associated with the foreign accounts. No matter where you reside in this world, but if you are a United States citizen, then definitely you will have to pay all the taxes on the income you earn. There are some constituencies in US which wish to know about the flow of funds you get in foreign accounts so that they can track if there is any illegal things going on. There might be terrorists groups who might have gathered funds for getting the powerful weapons and this is why there have been strict rules associated with the foreign accounts these days.