Foreign Income

If you are a U.S. citizen or resident alien, you must report income from all sources within and outside of the U.S. Not reporting income from foreign sources may be a crime.

In addition to reporting your worldwide income, you must also report on your U.S. tax return whether you have any foreign bank or investment accounts. The Bank Secrecy Act requires you to file a Report of Foreign Bank and Financial Accounts (FBAR) (FinCEN Form 114, previously Form TD F 90-22.1), If You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

Effective July 1, 2013, the FBAR must be filed electronically through FinCEN's BSA E-Filing System. The FBAR is not filed with a federal tax return. A filing extension, granted by the IRS to file an income tax return, does not extend the time to file an FBAR. There is no provision to request an extension of time to file an FBAR.

Foreign earned income exclusion

The United States taxes citizens and residents on their worldwide income. Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income.For 2015, the maximum exclusion is $100,800 per taxpayer, $101,300 for 2016.

Diary must include: the date and type of gambling you engaged, the name and address of the places where you gamble, the people you gambled with and the amount you win and lose.

If you need any more information regarding the above topic, contact me at 630-663-1500.