Move Savings From Us To Filipino Bank?

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Posted (edited)

I've heard advice that I shouldn't move more than $10k into a Philippines account because of FATCA... but I don't see what could go wrong here. Please chime in if you know more than what I've been able to find as a layman. The US just wants to know about the money, right? They don't actually take a percent if you state that it's your previously earned savings, or so the documentation would seem. Or has anyone heard/experienced the US gov't confiscating money first, then asking questions later? I would need this money to live on... but I don't feel safe keeping it in the US while I'm away for decades...

 

 

(Old55);   I moved this great question into a new topic. I also did an edit. Because you are a new member all your posts need approved that is why it took awhile to show up. Also most of the support and the forum owner live in Philippines or Oz so keep those hours. Hope you understand

Edited by Old55
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The FATCA debate has really heated up and there is no shortage of people taking to the internet to vent their outrage at the US government.  I, like many others who live here, was concerned about what impact this would have on my wife and me.  In order to educate myself, I did some research.  The following link provided the best information that I was able to find.  http://www.irs.gov/Businesses/Corporations/Summary-of-FATCA-Reporting-for-U.S.-Taxpayers

 

Below is the part that I think is of the most interest to people interested/worried about FATCA.  I do not think it wise for any of us to disclose our financial data, but I will say that after reading this, I am not at all worried about the law as it is currently written.  :rolleyes:   Hope this helps everyone. :cheersty:

 

Reporting Thresholds

Reporting thresholds vary based on whether you file a joint income tax return or live abroad. If you are single or file separately from your spouse, you must submit a Form 8938 if you have more than $200,000 of specified foreign financial assets at the end of the year and you live abroad; or more than $50,000, if you live in the United States. If you file jointly with your spouse, these thresholds double. You are considered to live abroad if you are a U.S. citizen whose tax home is in a foreign country and you have been present in a foreign country or countries for at least 330 days out of a consecutive 12-month period.

Taxpayers living abroad. You must file a Form 8938 if you must file an income tax return and:

  • You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year. These thresholds apply even if only one spouse resides abroad. Married individuals who file a joint income tax return for the tax year will file a single Form 8938 that reports all of the specified foreign financial assets in which either spouse has an interest. 
  • You are not a married person filing a joint income tax return and the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year.
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Philippine savings accounts are suppose to be insured up to 500,000 Pesos. I did that in  BPI  and BDO. Two Passbook accounts.

Early this year I got a notice from BPI along with 3 blank pages for me to fill out. I had to disclose a lot of information and I did not want that.

It was suppose to be a request by Internal Revenue in the US about a citizens savings abroad to tax it if necessary. The bank was going to withhold a part of my savings for the IRS. I didn't fill out the forms. Instead, I withdrew my savings and closed both accounts. 

I think maybe some US citizens hide their assets in foreign banks. I'm not one of them. Instead, I go personally to the states and have my friend who is an accountant to do my taxes. 

So, now I just have my checking account in BPI where I have money deposited as I need it from my US bank. My wife here has her own checking and passbook account. My name is not on any of them.

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I've heard advice that I shouldn't move more than $10k into a Philippines account because of FATCA... but I don't see what could go wrong here. Please chime in if you know more than what I've been able to find as a layman. The US just wants to know about the money, right? They don't actually take a percent if you state that it's your previously earned savings, or so the documentation would seem. Or has anyone heard/experienced the US gov't confiscating money first, then asking questions later? I would need this money to live on... but I don't feel safe keeping it in the US while I'm away for decades...

 

 

(Old55);   I moved this great question into a new topic. I also did an edit. Because you are a new member all your posts need approved that is why it took awhile to show up. Also most of the support and the forum owner live in Philippines or Oz so keep those hours. Hope you understand

 

As Mike J stated the FATCA thresholds are high and probably don't impact many of us.  However there is a related law that does impact many of us, FBAR:

 

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR

 

FBAR requires that you report if you have a foreign bank account that reaches 10 k during the year.  It is not really a big deal and I have done it.

 

Remember that any interest or other income you get from bank accounts or investments in the Philippine have to be reported as income to the IRS.  You can get a foreign tax credit for the tax paid in the Philippines but mine has been so small, I don't bother.

 

Regarding moving all your money to the Philippines, most here agree that you should leave most of your money in the safety of your U.S. bank.  Although I consider most of the major banks here relatively safe, you can never tell what might happen politically that could change that quickly.  Accounts here are insured here by the government, similar to the U.S., but only to p500,000, a bit over 10k usd.

 

There are some bank investments here with good interest here, but I have not done enough research on them to comment.  They carry risk, of course.

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If you transfer $10,000 or more out of the US at any time you are suppose to report it to the IRS (to supposedly protect against money laundering) ..... you can send $9,990 and you don't have to report it .... to keep me from having to report any banking info to the IRS everything is in my wife's name including US $ account and checking ... I simply make out a check to her each month from my US bank to cover our monthly living expenses ..... she deposits it in her US $ account and then withdraws it in US $'s and converts it to pesos ..... no muss no fuss and as she is 22 years younger than me she will undoubtedly out live me ..... me being 70 ..... this works very well as I only get social security and file no income tax as I'm below filing requirements ..... JMHO

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You are ALL correct.  I do something similar to what Mike does. I have my US bank account situated where I can send my wife in the Philippines money every month to our joint checking account.

I'm careful not to keep too much in my checking account since there have been reports of customers losing money in ATMs from their checking accounts. Nothing the bank can do about it since only the savings accounts are insured. 

I trust my US bank more than I do Philipine banks but I have to do business in the Philippines.

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The individual does not have to report a transaction over 10,000 unless it is a cash transaction.  The financial institution will report the non-cash transactions over 10,000.  The cash transaction rule applies domestically in the U.S. too.

 

Here is a horror story about the thugs at the IRS abusing the rule domestically.

 

http://www.wnd.com/2014/10/irs-seizes-life-savings-for-deposits-under-10000/

 

If you transfer $10,000 or more out of the US at any time you are suppose to report it to the IRS (to supposedly protect against money laundering) ..... you can send $9,990 and you don't have to report it .... to keep me from having to report any banking info to the IRS everything is in my wife's name including US $ account and checking ... I simply make out a check to her each month from my US bank to cover our monthly living expenses ..... she deposits it in her US $ account and then withdraws it in US $'s and converts it to pesos ..... no muss no fuss and as she is 22 years younger than me she will undoubtedly out live me ..... me being 70 ..... this works very well as I only get social security and file no income tax as I'm below filing requirements ..... JMHO

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Here is a horror story about the thugs at the IRS abusing the rule domestically.

 

http://www.wnd.com/2014/10/irs-seizes-life-savings-for-deposits-under-10000/

 

This is not the first news report I've heard on the subject. I try to comfort myself in the fact that most of these stories hinge on cash transactions, and that I'll be safe with a transfer that is electronic & can be traced... but to be honest I'm scared to death.

 

In the past 6 years, over 2,500 people have had their life savings confiscated by the IRS. They weren't even under suspicion of criminal activity. The IRS was just "following the law"...

 

I don't want to be an American any more :(

Edited by ucello
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me being 70 ..... this works very well as I only get social security and file no income tax as I'm below filing requirements ..... JMHO

 

Should file joint return online, you're missing about $500 in return for not making enough $$$, only in American may we pay nothing in and get cash back.

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Regarding moving all your money to the Philippines, most here agree that you should leave most of your money in the safety of your U.S. bank. Although I consider most of the major banks here relatively safe, you can never tell what might happen politically that could change that quickly

 

Agree, I'm with the "leave the bulk of your money in your USA account" crowd. There's also the possibility that if someone gets arrested then the Phils AMLC (Anti Money Laundering Council) could freeze and attempt to seize your Phil's account(s). Altough not widely reported in the press, this can (and does) happen more often then you might think. There's even a stipulation in their law that basically states that even if they think you have used money for illegal activities then they can seize it. It's up to you to disprove it and how are you supposed to do that if all of your accounts are frozen?

 

http://www.amlc.gov.ph/amlc.html

 

 

From: http://www.chanrobles.com/republicactno9160rules.htm#.VUKN1E0R45u

 

Sec. 3. Authority to Freeze Accounts. –
(a) The AMLC is authorized under Sections 6 (6) and 10 of the AMLA to freeze any account or any monetary instrument or property subject thereof upon determination that probable cause exists that the same is in any way related to any unlawful activity and/or money laundering offense. The AMLC may freeze any account or any monetary instrument or property subject thereof prior to the institution or in the course of, the criminal proceedings involving the unlawful activity and/or money laundering offense to which said account, monetary instrument or property is any way related. For purposes of Section 10 of the AMLA and Section 3, Rule 3 of these Rules, probable cause includes such facts and circumstances which would lead a reasonably discreet, prudent or cautious man to believe that an unlawful activity and/or a money laundering offense is about to be, is being or has been committed and that the account or any monetary instrument or property subject thereof sought to be frozen is in any way related to said unlawful activity and/or money laundering offense.
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