The April tax filing due date is right around the corner. US persons abroad will soon be finalizing their US tax returns and getting ready to pay the US Treasury. Unfortunately, this can be difficult and expensive to achieve if you do not maintain a checking or other account in the United States. Payment of US taxes must be made in US dollars. A big problem for many Americans living overseas is the inability to open and/or maintain bank accounts in the United States. Since this is a problem, some individuals use their credit cards to make tax payments – but, OUCH, this is costly and can add a significant burden to the cash outlay. Some individuals obtain certified bank checks from their local (i.e., “foreign” non-US) banks payable to the US Treasury in US dollars – this can be a time-consuming exercise with the bank and in addition, it will cost money to have prepared.
American Citizens Abroad Inc., (ACA) a non-profit organization, has come to the rescue just in time for tax season. On March 1, ACA announced a partnership, of sorts, with the State Department Federal Credit Union (SDFCU) to make available to all ACA members US accounts. These accounts are very easy to open, and are available to any persons living abroad who are members of the ACA. The accounts are generally activated within 48 hours and are very convenient, full-service accounts denominated in US dollars.
Through your membership with ACA, you can join SDFCU. SDFCU checks your membership status with ACA before accepting you as a member (account holder) of SDFCU. Obtaining ACA membership is very easy. If you are not already a member of ACA, you can join now.
Not a “Foreign” Financial Account – No FBAR, No 8938 Reporting
What else is good about opening up a SDFCU account? Plenty!
- The account comes with everything online.
- SDFCU has very good 365/24/7 real-live-humans to provide any necessary support.
- You can “marry it up” the account with your financial planning including savings, retirement and college/school fees planning.
- Perhaps best of all, this is not a foreign account – it’s a US account and you need not include it in your Foreign Bank Account Report (FBAR/FinCEN Form 114) or Form 8938 (Statement of Specified Foreign Financial Assets; which is attached to your tax return, Form 1040).
Of course, you will want to keep your local bank account wherever you live in order to meet all your local banking needs such as salary payments, paying bills and so on.
FAQs regarding the ACA SDFCU accounts can be found here.
SDFCU Accounts are NOT Affiliated With the US Government or US Department of State
It is very important to remember that the financial institution is the State Department Federal Credit Union. The SDFCU scheme is entirely separate from the US Department of State. This bears repeating: SDFCU is not part of the US Department of State. It is not owned by the US Government. It is owned by its members/account owners – including you when you join. It just so happens that its origins trace back to the need to provide banking services for State Department employees strewn around the world, who have the same problems as many Americans overseas. Moreover, the SDFCU, while including in its name the term “Federal”, is not run by the US Government or limited to US Government employees. Simply put, this financial institution has elected to organize itself under federal credit union regulations instead of state banking laws.
Thank you ACA for Your Initiative
Given the difficulty I have seen for my own clients in paying US taxes from abroad, the ACA/SDFCU account is so very needed. Given its convenience and simplicity I feel sure that it will become very popular and that many individuals will open up this account. Thank you ACA, for taking the initiative to solve what has been a vexing problem for many Americans overseas.
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