Hello, I think this question has been answered in part before, but I have a twist:
I am an American citizen, my wife is a Canadian citizen. We live in Canada.
We have a joint checking account. Linked to that account is HER savings account, which has only her name on it -- she has access to it; I do not. Each month, our paychecks are deposited into our joint checking account, and what isn't used for monthly bills is transferred into HER savings account.
This was not set up as a means to avoid FBAR filing requirements... I was just too lazy to do the extra paperwork when our joint checking was set up, and I have a job that will net me a reasonable salary, so I figured, why not just leave her name only on the savings account?
I have a few questions:
1. Do I have a financial interest in her savings account, as defined by FBAR reporting requirements, such that the money in this account has to be reported?
2. If the answer to 1 is yes, which I am assuming it is, does my financial interest extend beyond the time during which we've had the joint checking account (going back approximately 1.5 years)? Or, is she completely in the clear if we have no joint accounts?
3. If the answer to 1 is yes, do I ALSO have an interest in her RRSPs which she transfers money into from her savings account (the same one that is linked to our joint checking account, that I have no access to)?
4. Finally, the most important question -- if the answer to any of these questions is yes, what in the world happens when I file my FBAR? I have filed taxes dutifully for the entirety of the time I"ve been in CAnada -- 12 years -- and the >10,000 filing requirement has only really been a consideration for the past 2 tax years. If my wife's accounts are included on the FBARs I file, do I have to justify why those accounts total more than my reported income on my 1040s (i.e with paperwork, receipts, etc.)?
Thank you for your help,
Alex
FBAR with non-resident alien spouse and joint accounts
Moderator: Mark T Serbinski CA CPA
1. I don't understand why the convolution. Since you have to file FBAR, what does it matter that you have one account or 2? Do you have signing authrity on that account? Yes: FBAR on that ccount. NO: No FBAR on that account.
2. Why do you ask if SHE is in the clear? YOU are the one needing to file FBAR.
3. See 1.
4. Do you understand what FBAR is for? It is for reporting foreign accounts whisc you own or have signing authority over. It is not for reporting tax.
Fpr US purposes, the savings account is not taxable in your name, so what is the problem about "justifying".
In Canada, you are responsible for the tax on her savings account to the extent that you contribute to it.
2. Why do you ask if SHE is in the clear? YOU are the one needing to file FBAR.
3. See 1.
4. Do you understand what FBAR is for? It is for reporting foreign accounts whisc you own or have signing authority over. It is not for reporting tax.
Fpr US purposes, the savings account is not taxable in your name, so what is the problem about "justifying".
In Canada, you are responsible for the tax on her savings account to the extent that you contribute to it.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Thanks for your response!
Here is the specific passage that triggered my angst (from the FBAR guidelines document published by the IRS): http://www.irs.gov/pub/irs-utl/IRS_FBAR ... _Guide.pdf, page 4, defining "financial interest," reads as follows:
"The owner of record or holder of legal title is a person acting as an agent, nominee, attorney, or a person acting on behalf of the United States person with respect to the account.
 Example: John is a United States citizen. His brother Paul maintains bank accounts in Mexico on behalf of John. The accounts are held in Paul’s name but Paul only accesses the accounts in accordance with his brother’s instructions. John has a financial interest in the Mexican bank accounts for FBAR reporting purposes. If his brother Paul is a United States citizen or resident, he also has an FBAR reporting requirement with respect to the accounts.
This is why it's confusing to me -- my wife doesn't only access her accounts in accordance with my instructions. But we are married -- so some withdrawals from savings (HER savings account) only occur after my input (i.e. home renovations). Following that line of thought out to its logical conclusion, though, is ridiculous -- do I have a financial interest in her RRSPs because I gave my opinion when we decided whether or not to withdraw from these for our first home purchase?
With respect to your response to my question 3 -- I do understand what FBAR is for, but my understanding was that it extended to tax liability, that is, the IRS could get involved, if it looked like you had unreported income (which I do not).
My major concern, in any event, still hinges on that passage copied above. I've reported all my income; I'm not worried anything is being done illegally. I just want to make sure my filing requirements are up to date.
THanks again -- this forum is immensely helpful.
Alex
Here is the specific passage that triggered my angst (from the FBAR guidelines document published by the IRS): http://www.irs.gov/pub/irs-utl/IRS_FBAR ... _Guide.pdf, page 4, defining "financial interest," reads as follows:
"The owner of record or holder of legal title is a person acting as an agent, nominee, attorney, or a person acting on behalf of the United States person with respect to the account.
 Example: John is a United States citizen. His brother Paul maintains bank accounts in Mexico on behalf of John. The accounts are held in Paul’s name but Paul only accesses the accounts in accordance with his brother’s instructions. John has a financial interest in the Mexican bank accounts for FBAR reporting purposes. If his brother Paul is a United States citizen or resident, he also has an FBAR reporting requirement with respect to the accounts.
This is why it's confusing to me -- my wife doesn't only access her accounts in accordance with my instructions. But we are married -- so some withdrawals from savings (HER savings account) only occur after my input (i.e. home renovations). Following that line of thought out to its logical conclusion, though, is ridiculous -- do I have a financial interest in her RRSPs because I gave my opinion when we decided whether or not to withdraw from these for our first home purchase?
With respect to your response to my question 3 -- I do understand what FBAR is for, but my understanding was that it extended to tax liability, that is, the IRS could get involved, if it looked like you had unreported income (which I do not).
My major concern, in any event, still hinges on that passage copied above. I've reported all my income; I'm not worried anything is being done illegally. I just want to make sure my filing requirements are up to date.
THanks again -- this forum is immensely helpful.
Alex
Your wife is not maintaining these accounts on your behalf and acting solely at your behest. She is not acting as your agent, particularly she is not maintaing the accounts because you re not in a position to manage an account.
The day will come when spouse's account will be included in FBAR/FinCEN, for the very suspicions that you outline.
But we are not there yet.
But, if it makes you feel better, you could spend the extra 5 minutes and report these accounts. It has no bearing on your 1040, other than check boxes.
The day will come when spouse's account will be included in FBAR/FinCEN, for the very suspicions that you outline.
But we are not there yet.
But, if it makes you feel better, you could spend the extra 5 minutes and report these accounts. It has no bearing on your 1040, other than check boxes.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best