Residents of U.S. Possessions - Form 8898 Bona Fide Residence

 

You may need to file Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession if you became or ceased to be a bona fide resident of one of the following U.S. Possessions: American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, or the U.S. Virgin Islands.

If your worldwide gross income is $75,000 or more, you must file Form 8898 for the tax year in which you became or ceased to be a bona fide resident of the U.S. possession. For married individuals, the $75,000 filing threshold applies to each spouse separately. When figuring whether your worldwide gross income is more than $75,000, do not include any of your spouse’s income. If both you and your spouse are required to file Form 8898, file a separate Form 8898 for each of you.

The bona fide residence rules for the U.S. possessions named above are explained in Chapter 1 of Publication 570 Tax Guide for Individuals with Income From U.S. Possessions.

Penalty for Not Filing Form 8898

If you are required to file Form 8898 for any tax year and you fail to file it, you may owe a penalty of $1,000. Also, you may owe this penalty if you do not correctly include all the information required by the form. However, you will not owe this penalty if you can show that such failure is due to reasonable cause and not willful neglect.

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