Form 114 and foreign wages

[Richard W]

I have entered information for Form 8938 identifying all the foreign accounts, but don't see how to "activate" this for e-filing Form 114.  

[itonewbie]

Are you trying to file FBAR or FATCA?  F.8938 for FATCA is to be filed with the 1040 and it has much higher thresholds (yes, plural, because that depends on both the taxpayer's filing status and whether he/she resides overseas) for filing than FinCEN 114 for FBAR, which is only $10k.  Unlike FATCA, FBAR is to be filed separately with FinCEN.  The types of accounts, assets, and level of details reportable on F.8938 and FinCEN 114 are also different even though there are some overlaps.

The issue you have with EIN is separate from FBAR/FATCA.  If your client is not employed by a US employer and has no W-2, you need to indicate in your input for wages that it was a foreign employer and services were not performed while resident in the US.  Sorry I can't be more precise since I don't use PS.

[Richard W]

Thanks - I figured out the wages issue. Its has to be entered on the 8863 worksheet and select to carry forward as wages to the 1040. 

As for foreign assets, my client lives overseas and has over 181,000 (US) in banks over there. In the past we filed Form 114 through the tax software (I just switched to Proseries this year). Interestingly, there is simply a box to check for this on the business input forms, but I can't find anything in the individual form inputs.

UPDATE - found the box to check to file Form 114 Electronically... but I don't actually see the Form in the form list...

[LG-CPA]

Follow these steps:

1. Open client in ProSeries
2. In the File menu, select "Go to Foreign Bank Reporting Form 114"

I use pay-by-return, so there is an extra charge ($6 plus tax).  Not sure if it is included in the unlimited versions.

[itonewbie]

No, the wage issue cannot be from F.8863 because that form has nothing to do with foreign earned income.  If your client lives overseas and has a tax home there, you'd be claiming foreign earned income exclusion and all the relevant input would be made on F.2555.

As for FATCA, your client shouldn't need to file based solely on the number you indicated, whatever his filing status is.  For unmarried and MFS, the thresholds are $300k at any time during the year and $200k at year-end.  The thresholds for MFJ are $600k at any time during the year and $400k at year-end.  Be careful that FATCA requires reporting of more than just bank and financial accounts.

This article may help you with the preparation of FBAR.

[itonewbie]

Oops, forgot the link.  Here you go: https://proconnect.intuit.com/community/help-articles/help/proseries-form-114-fbar-faq-s/00/4678

[Mn3]

Hello,

I'm hoping you can help me with this issue. I use Proseries Professional and have a client who had foreign wages. She does not qualify for the exclusion on Form 2555, therefore, wouldn't I just list her wages on a W2 and take the foreign paid tax credit?

When I put her wages on the W2 worksheet, I still get an EIN error even though China has been selected. Do I still need to fill out Form 2555 even though she is not eligible?

[itonewbie]

It would be usual for an individual to be on China payroll and not be eligible for foreign earned income exclusion.  If you would like to discuss more, please open a new thread on your own.

You should be able to use the W-2 worksheet but make sure you enter China for Foreign Country.  You then need to create a F.1116 for China and enter the gross foreign source income as the amount you enter in the W-2 worksheet will not flow automatically to F.1116 (and not all of the compensation may be foreign source).

China has a very different tax regime than China and IIT provides for various concessions for foreign nationals, which are not applicable under US tax law.  This means you cannot rely on the IIT receipts or return for US tax reporting purposes but will need to obtain full details of the compensation package, including cash and noncash benefits to determine the proper US tax treatments.