Offshore accounts have a shady image in the public eye, due to a history of misuse and abuse. Despite this perception, it is perfectly legal to open an offshore investment account. Knowing how to manage the files of your offshore accounts is an important part of keeping your finances above board with the authorities.
#
Print out a hard copy of every digital financial transaction you make, and keep every statement you receive in the mail. Keeping track of the large sums of money involved in an offshore investment account shouldn't be left to the whims of a malfunctioning server or the "Saved" file of an email account. Its best to have original financial statements and documents in hand from the institution that is handling your account.
# 2
File your hard-copy documents in a hanging file cabinet. Hanging file cabinets are easy to keep organized and maneuver through, thanks to the way the individual files slide back and forth. Use removable, color-coded tabs on the tops of your files. Since your offshore account is in another country, keep all of these files a separate color from the files concerning the accounts in your home country. Government tax agencies, such as the IRS, will ask for very specific information should an audit occur. The more specific and separate your files are, the easier life becomes at such a moment.
# 3
Keep all your offshore investment-account records on file for at least 7 years after the assets have been sold. The IRS has a 3-year statue of limitations on auditing a tax return--unless you fail to report more than 25 percent of your income, which takes it up to 7 years. If you have ever failed to file a tax return, or have filed a fraudulent one, this time limit is eliminated and the records should be kept, even if they are over 7 years old.
Tags: offshore accounts perception investment finances transaction money account
© Copyright 2012, Inc. All rights reserved.