Understanding How the TDF Relates to Your Offshore Money

The TDF90, or Report of Foreign Bank and Financial Accounts, is an asset reporting form that must be filed separately from one's tax return.

This form is also commonly referred to as the Foreign Bank Account Report, or F-BAR.

F-BAR Basics

The TDF establishes basic rules for reporting, so only certain people have to fill it out. Individuals who have more than $10,000 offshore must report it. This figure is taken as an accumulative total, meaning that you can't have multiple bank accounts that all have just under that amount.

Reporting this income on the F-BAR does not exempt you from the need to do so elsewhere, however. For instance, you're also supposed to report accumulative sums of more than $10,000 in the appropriate spot of your regular tax form's Schedule B. The F-BAR is an entirely separate document. As such, it has its own deadline and filing guidelines.

Remember that the F-BAR has to be filed prior to June 30th of every year at the U.S. Treasury in Detroit, Michigan. This deadline is absolute; the IRS does not offer extensions. It's important that the information you include is complete, including things like foldable gold, foreign currencies and anything else held in an overseas bank.

Some commodities, such as pooled funds, cash-value insurance policies and similar financial products, are also included in the form's definition of what must be reported.

Why Does One Need to File the F-BAR?

In essence, the reason for this extra reporting is that it provides the IRS with a greater level of detail for verification. Auditors have been known to raise a suspicious eye at tax payers who fail to report their foreign bank accounts and other sources of offshore money on both their regular returns and the TDF form.

Many investors balk at the extra charges associated with having their tax preparers fill out their TDF90s. Nonetheless, professionals stress that it's important for these forms to match up with the original tax return document so that no audit flags are raised.

To get help with your Foreign Bank Account report, contact Nagel Law by visiting www.nagellaw.com.