U.S. Tax Filing Requirements for Common International Investments

If you are a U.S. citizen or resident with international investments or foreign financial accounts, you may have complex U.S. tax filing and reporting obligations—even if your accounts are tax-advantaged in your country of residence. Below are some of the most common country-specific accounts and the key U.S. tax considerations for each.

Canada: RESP and TFSA

Registered Education Savings Plans (RESPs) and Tax-Free Savings Accounts (TFSAs) are popular Canadian savings vehicles, but the U.S. does not recognize them as tax-advantaged.

  • Taxation: All income (interest, dividends, capital gains) earned in these accounts is taxable annually in the U.S., even if not distributed.

  • Reporting:

  • FBAR (FinCEN 114): Must be reported if the aggregate value of all foreign accounts exceeds $10,000 at any time during the year.

  • FATCA (Form 8938): Must be reported if the value of specified foreign assets exceeds IRS thresholds.

  • Foreign Trust Reporting (Forms 3520/3520-A): RESPs and TFSAs are generally treated as foreign trusts, requiring annual reporting with significant penalties for noncompliance.

Australia: Superannuation Funds

Australian superannuation funds (including self-managed super funds) are typically treated as foreign grantor trusts for U.S. tax purposes.

  • Taxation: U.S. persons must report income and gains from these funds on their U.S. tax return, even if not distributed.

  • Reporting:

  • FBAR: Required if the total value of foreign accounts exceeds $10,000.

  • FATCA (Form 8938): Required if asset thresholds are met.

  • Foreign Trust Reporting (Forms 3520/3520-A): Often required for superannuation funds.

  • PFIC Reporting (Form 8621): May be required if the fund holds non-U.S. mutual funds or similar investments.

United Kingdom: ISA (Individual Savings Account)

UK ISAs are tax-free in the UK, but not in the U.S.

  • Taxation: All interest, dividends, and capital gains in a UK ISA are taxable in the U.S. annually.

  • Reporting:

  • FBAR: Required if the total value of foreign accounts exceeds $10,000.

  • FATCA (Form 8938): Required if asset thresholds are met.

  • PFIC Reporting (Form 8621): Required if the ISA holds non-U.S. mutual funds or similar investments.

  • No Treaty Relief: The U.S.-UK tax treaty does not exempt ISAs from U.S. tax or reporting.

General U.S. Reporting for Foreign Accounts and Investments

  • FBAR (FinCEN Form 114): Required if the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the year.

  • FATCA (Form 8938): Required if the value of specified foreign financial assets exceeds IRS thresholds.

  • PFIC Reporting (Form 8621): Required for U.S. persons holding non-U.S. mutual funds or similar investments.

  • Foreign Trust Reporting (Forms 3520/3520-A): Required for many foreign retirement and savings accounts.

Key Takeaways:

  • U.S. persons must report and pay U.S. tax on income from most foreign accounts, even if tax-free or tax-deferred abroad.

  • Failure to comply with U.S. reporting requirements can result in significant penalties.

  • Each account type and country may have unique rules—consult a U.S. tax advisor with international experience for tailored guidance.

If you have international investments or foreign accounts, our team can help you navigate your U.S. tax filing and reporting obligations. Contact to schedule a call with a cross-border tax specialist.