Employees don their tax planning hats to find the best ways to save taxes.Įxperts say that most of the investments in life insurance, tax-saving fixed deposits, PPF, NPS, ELSS and others occur during the end of the financial year. So, if you're a US owner of a PFIC and meet the threshold requirement, make sure to file Form 8621 annually to avoid IRS penalties.As tax filing season draws closer, salaried people eagerly wait for their Form 16 as it is the key to filing their income tax returns. It's worth noting that Form 8621 can be complex, and it's advisable to have a tax practitioner prepare it for you. However, there is a discrepancy between the regulation and instructions regarding whether Form 8621 is required when a taxpayer is below the threshold requirement with no distributions. For married filing jointly, the combined PFIC ownership must exceed $50,000 for the form to be required. Stay one step ahead of the IRS and avoid costly penalties by filing Form 8621įor those filing single or married filing separately, form 8621 must be filed in any year that their total number of PFICs exceed $25,000.

The minimum threshold requirements vary depending on whether the person is filing single, married filing separately or jointly. The threshold requirements for PFIC reporting changed in 2012, with all PFICs requiring reporting each year regardless of any distributed income. PFICs refer to foreign mutual funds and holding companies, which US owners are required by the IRS to report ownership of on Form 8621.Īnd while reporting on offshore accounts, assets, investments and income is generally required annually, Form 8621 can be one of the more difficult international information returns to file.įailing to file this form can lead to various fines and penalties from the IRS, which can be mitigated with the agency's tax amnesty programs known as voluntary disclosure.

Hey there! Wondering whether you need to file IRS Form 8621 every year? Well, the answer depends on whether you're a US owner of a Passive Foreign Investment Company (PFIC) and if you meet the threshold requirements.

Filing form 16 online