Turbotax And Form Td F 90-22.1

[JimGant]

FBAR, as most of us Yanks know, is that annual report we're supposed to file if our aggregate amount in all our foreign bank accounts exceeds, even for a day, $10,000. Most tax software addresses this requirement, even tho' not filed with your 1040, And I just got the TurboTax software, CD version, for tax year 2011. Same bugs as last year still exist, plus some new ones -- more annoying than critical (and possibly not the same on other versions of TurboTax, like their on-line version).

First off, here's some guidance from the IRS:

Q. Does more than one form need to be filed for a husband and wife owning a joint account?

A. No, provided that the names and Social Security numbers of the joint owners are fully disclosed on the filed FBAR. A spouse having a joint financial interest in an account with the filing spouse should be included as a joint account owner in Part III of the FBAR. .

Ok, TurboTax (TT) asks who's the filer of the FBAR -- and since TT knows I'm filing a joint tax form with my wife, she and I are the two boxes shown. I check my box, and PART I of the FBAR is filled in with my name, social security number, address, and DOB. I'm then asked about my accounts --whether owned singly or jointly. I reply jointly -- and here's where it becomes comical.

First, the guidance from the instructions on the FBAR form:

Item 24. Enter the number of joint owners for the account. If the exact number is not known, provide an estimate. Do not count the filer when determining the number of joint owners.

Items 25-33. Use the identifying information of the principal joint owner (excluding the filer) to complete Items 25-33. Leave blank items for which no information is available. If the filer's spouse has an interest in a jointly owned account, the filer's spouse is the principal joint owner. Enter “(spouse)” on line 26 after the last name of the joint spousal owner.

TT asks "who's the principal joint owner" -- but gives you the option to check your own name (even tho' it knows you're the filer, and per instructions, are excluded from being the "principal joint owner.") However, per US experience, where your joint acct with your wife normally carries your social security number, you just might check your own name as "principal owner" in error. Then, your name would appear as both the filer (in blocks 1 thru 6, on each page) as well as the "principal joint owner" in block 26. Your wife's name and social (or ITIN) would not appear anywhere. So, officially you're not in compliance with provided that the names and Social Security numbers of the joint owners are fully disclosed .

So, check the block next to your wife's name, not yours. But even then, TT leaves out her social security number and full address (definitely in error, as this did not occur last year, and will probably be fixed with subsequent iterations of TT updates).

So, when you print out your FBAR, check for omissions, like SS number, address, and spouse in parentheses on line 26. And, again annoying, TT prints out all pages, including the blank ones -- which the FBAR instructions say are not to be sent in. Remember also that, since the wife is not filing her own FBAR, both your and her signatures are required in the single signature block on page one. TT doesn't give a 'heads up' on this.

Also, this year's Schedule B has a new line: "Are you required to file a TD F 90-22.1? Yes or No" I guess this means that, if you check a block, you can no longer go 'duh, what's a FBAR' in your plead of ignorance.

Not that the FBAR police would have any interest in any of us (unless, after 10 years of filing FBARS -- and not reporting any Thai source interest or dividends on Schedule B -- their curiosity is aroused..)

But as far as TurboTax causing errors, not to worry. You can always follow Geithner's example:

Among the better “oops” tax excuses of the last few years was the statement by Treasury Secretary hopeful Tim Geithner when accused of not paying approximately $35,000 of self-employment/FICA tax. TurboTax didn’t tell me I owed it, he famously said. He was then confirmed as Treasury Secretary.

And, it's just as easy to avoid TT and fill in the FBAR form yourself. However, using last year's form, and just changing dates and numbers, won't work, as they've revised the form Nov 2011. Easy to download the new one, of course.

And FBAR e-ling is on the horizon.

http://www.journalofaccountancy.com/Web/20114587.htm

[wannascuba]

When is the FUBAR form due? Oops I mean FBAR...

[Langsuan Man]

When is the FUBAR form due? Oops I mean FBAR...

The FBAR must be received by the Department of the Treasury on or before June 30th of the year immediately following the calendar year being reported

I don't understand why the OP insists that the form be done by Turbo Tax, since it must be mailed anyway and cannot be filed electronically like the rest of the OP's taxes using Turbo Tax

Here is the form:

f90221.pdf

[JimGant]

I don't understand why the OP insists that the form be done by Turbo Tax, since it must be mailed anyway and cannot be filed electronically like the rest of the OP's taxes using Turbo Tax

Huh? You missed the last part about ... "it's just as easy to avoid TT and fill in the FBAR form yourself. However, using last year's form, and just changing dates and numbers, won't work, as they've revised the form Nov 2011. Easy to download the new one, of course."

And I actually don't use TT for my FBAR -- besides being too cumbersome, it also doesn't print out the FBAR correctly -- as I mentioned -- thus requiring writing-in such information as spouse's SS and spouse in parentheses. Not that the FBAR police would care -- they're just happy you attempted to file correctly, and just your name, social, and amounts somewhere on the form should keep 'em happy.

So, the point of the post was just a 'heads-up' on some quirks with this particular software -- for the purists -- and those who are entirely dependent on tax software to navigate all this bureaucratic BS.

Also, "cannot be filed electronically like the rest of the OP's taxes using Turbo Tax" brings up the point that, if you don't have a US address -- only a Thai one (excluding and APO address), you can't file electronically with TT. However, other software programs, like TaxACT, do -- at least historically -- allow filing from a foreign address.

And, per the last link I referenced, it sounds like efile for FBAR is in the works. And maybe will be mandatory -- which means, as wanna said, FBAR is really FUBAR.

[lopburi3]

So a spouse must file or sign but by definition only US persons are required to file - so would a foreign national spouse be required to sign in area 44? I don't believe so.

United States Person. United States person means United States

citizens; United States residents; entities, including but not limited to,

corporations, partnerships, or limited liability companies created or

organized in the United States or under the laws of the United States;

and trusts or estates formed under the laws of the United States.

[lopburi3]

Will move this to financials where it usually appears each year.

[el jefe]

A Thai spouse who does not hold a US green card is not required to file or sign form 90-22.1.

[Pib]

Jim,

Yea, I agree its just as easy to avoid TurboTax (or whatever tax software someone may use) and fill in the FBAR form yourself. I don't use TT anymore but TaxAct, and unless something has changed this year with TaxAct it does not fill out the FBAR form for you but gives you a heads-up not to forget to submit the FBAR if required.

I just pull up last year's FBAR form, assuming it's still the current form to use, make the necessary updates, printout, sign (both the wife and I sign), and mail it off shortly after I have electronically filed our joint tax return. But this year it will take me a little longer to complete the form since there is a new Nov 11 FRAR form which I have just downloaded and I will need to fill it in from scratch (after reading the instrucitons which come with the form) which ain't hard to do at all...just some addresses, social security numbers, account numbers and amounts, and some other easy stuff.

Cheers,

Pib

[JimGant]

So a spouse must file or sign but by definition only US persons are required to file - so would a foreign national spouse be required to sign in area 44? I don't believe so.

If you're filing jointly with your foreign spouse, who has an ITIN number instead of a social security number (because, as a non-greencard holder and/or non resident alien, she's ineligible for a social security number), then, yes, treat her same as a US person (using the ITIN in lieu of a SS number, same as on your 1040.

From directions on the FBAR form:

Provide the filer's United States taxpayer identification number. Generally, this is the filer's United States social security number (SSN), United States individual taxpayer identification number (ITIN), or employer identification number (EIN).

If Thai wife has no ITIN (or SS number), no need for her inclusion, and signature, on the FBAR form.

Pib.

The new Nov 2011 form has identical blocks to the superceded form, so just do a pdf lift to fill in, then change the dates and numbers. The only thing I can see different on this new form are the directions -- mainly, penalty warnings and don't file empty pages.The admonition "Don't use previous editions of this form" could cost you $10,000 (joke, joke, joke -- I think

[JimGant]

If, for whatever reason, your Thai wife doesn't have an ITIN, thus allowing filing jointly, with two exemptions, and twice the standard deduction -- you should include her anyway on the FBAR as the principal joint owner. Since she has no FBAR obligation of her own, no signature is required. And in the ID block, I'd enter "NRA" for non-resident alien. Also, I would put spouse in parentheses.

Why? Because if this joint account generates interest or dividend earnings, you can report just half of it on your 1040 Schedule B, since marital income in Thailand is considered community property. And, just like in the States, if you live in one of the 9 community property states, you divide joint account income in two if filing "married, filing separately."

You could also report the joint account as owned separately, since your wife doesn't exist in the eyes of the Feds. And, the numbers reported would be the same as reported in the joint section. But, if the Feds eventually marry-up your foreign accounts with your tax filings, showing accounts as joint would be more precise, plus giving reason as to why interest being reported is only half of what shows up on the Fed's screen.

Anyway, nitnoy observation. Plus, unless your wife is really rich in her own right, she should have an ITIN. If in doubt, do the numbers.

[lopburi3]

Do not believe wife needs to sign this form if not a US Person (an ITIN for normal tax filing does not make her a US Person in my reading) - the information is provided in section III and you put (spouse) after name as instructed but as above case no signature is required by her.

[JimGant]

Do not believe wife needs to sign this form if not a US Person (an ITIN for normal tax filing does not make her a US Person in my reading) -

The Feds are really bobbling this whole issue, coming out with new forms every few months. Two forms ago, the term "ITIN" was not mentioned in the filing instructions. Then, it was in subsequent forms. Why? Because if you make your wife a defacto US person for the purposes of taxes, well, then, she too puts her income subject to US taxation. Most who opt for the wife getting an ITIN do so because she had little income -- and thus the additional exemption and deduction from the ITIN option provide for reduced taxation by filing jointly. But, in doing so, she now, as a defacto US person for taxation purposes, says all her income is subject to US taxation.

As such, if she had a bank account solely in her name, she would have to file her own FBAR. Same as a Thai wife who is a *real* US person for taxation purposes. Reason being: the Feds are looking for foreign accounts that are subject to US taxation. An account owned by a non resident alien, who has opted for the ITIN route, falls within this Fed criteria.

So, if ITIN wife has no separate account, only a joint account with Yank spouse, she needn't file a separate FBAR. But, she would need to co-sign with her husband -- as a defacto US person. Same as a real US person. No co-signature? Tells me the 'principal joint owner' is not subject to FBAR reporting.

This FBAR thing is so convoluted, whether one or two signatures arrive on the form is probably inconsequential. I doubt the turkeys at Treasury really understand any of this. Thus, the rewrites of the FBAR form instructions every few months. That you file the form should be good enough. That you -- and a million others -- don't fill it out correctly -- well, standby for another form rewrite.