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.
What else is good about opening up a SDFCU account? Plenty!
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.
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.
The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.
Virginia La Torre Jeker J.D.
Virginia La Torre Jeker J.D., is based in Dubai. Virginia has been a member of the New York Bar since 1984 and is also admitted to practice before the United States Tax Court. She has over 30 years of experience specializing in the international aspects of US tax, including FATCA. She has been quoted in the New York Times and Newsweek, and is regularly quoted in many local news articles and publications."
EUCED - European Network for Economic Cooperation and Development is a European Economic Interest Grouping (EEIG), as per EU Council Regulation # 2137/85, established for European and worldwide economic and development operations. As well as, the status of an European Business Association.Read more