There are many individuals in New York who operate a business in international territory. These businesses or their personal needs may lead them to consider opening an offshore bank account to keep track of their finances elsewhere. It is important to note that this activity is not illegal if you are open and transparent about it.
When does having an offshore account break the law?
Honesty is the best policy when considering opening an offshore bank account. The situations where offshore bank accounts become illegal are when you intend to commit tax evasion or fraud. Tax evasion means that you are trying to avoid paying your taxes on the income that you make. Every dollar that you make is eligible for taxes if you reside in the United States.
Many white-collar crimes involve money laundering and making money through illegal activity. Some individuals choose to utilize an offshore bank account for this reason, but this is illegal.
Why use an offshore bank account?
As long as you take all legal precautions, there are many benefits to considering an offshore bank account for your personal needs or your business. You will have more opportunities for investments and for making foreign exchanges when you have an offshore bank account, for example. You might also benefit from the exchange rates in another country when considering American standards.
There are several preparations to take if you plan to open an offshore bank account, including filing it with the IRS. Be sure to complete the FBAR form to the IRS and give information on any assets in offshore bank accounts that are over $10,000. If you have any additional questions about your offshore bank account and the legality of it, an attorney may help you.