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The Foreign Bank Account Reporting Deadline is Approaching – What You Need to Know!

Updated - May 2020

As a US expat, there are many US tax and legal intricacies that can complicate matters. When living abroad, Americans face additional obligations, including the Foreign Bank Account Reporting (FBAR). Fortunately, these requirements are easy to navigate once you know the rules. Here’s what you should know about FBAR filing, so you’ll be prepared when the deadline approaches!

What Is the FBAR?

FBAR, also known as FinCEN Form 114, reports your foreign bank account information to the US Treasury. It’s not technically a tax form, as it doesn’t generate taxes or amounts due. Instead, FBAR is simply informational. The purpose of the form is to prevent US citizens from hiding offshore assets and income to avoid US taxation. The FBAR must be filed by individuals and companies who own, or have an interest in, foreign bank or financial accounts that exceed the reporting threshold for the given year.

Who Needs to File the FBAR?

Individual Foreign Bank Account Holders

US citizens or Resident Aliens (Greencard holders) will need to file an FBAR if they have at least one foreign financial account with a total balance exceeding $10,000 at any point during the calendar year. All US persons must file an FBAR if they meet these requirements, regardless of age or circumstance. Guardians of minors and those unable to file for themselves must file the FBAR on behalf of their charges.

Joint Foreign Bank Account Holders

Joint account holders will actually need to file separate FBAR forms if they have other separate accounts to report as well, but both persons will report the full balance of the joint account(s) on their respective forms. If a couple has only a jointly held account (no separate accounts), they may file a single FBAR form to report the account.

US Companies with Foreign Accounts

US companies must also follow the FBAR reporting requirements. A US company is considered to be any corporation, partnership, LLC, estate or trust that is formed or organized under the laws of the US.

FBAR Specifics

If you own, or have an interest in, any foreign financial accounts, it’s important to stay on top of the financial information. If at any point during the calendar year, the account balance exceeds $10,000, you must file an FBAR form – so it’s very important to keep a close eye on these accounts in order to stay compliant.

Foreign financial accounts include things like:

  • Checking
  • Savings
  • Brokerage
  • Deposit
  • Mutual funds
  • Whole-life insurance policies
  • Securities
  • Any other accounts held with a financial institution

Foreign Bank Account Reporting Deadline

The Foreign Bank Account Reporting filing is due on April 15th. However, if you’re unable to file your FBAR by the regular deadline, you’ll receive an automatic extension until October 15th.

Filing your FBAR in a timely manner is important, because there is a penalty of $12,921 for each non-willful violation. If you willfully fail to report an account, you may even be subject to a penalty equal to $129,210 or 50% of the balance of the account, whichever is greater.

If you need to file an FBAR that is past due, you may be able to avoid the penalty if you have reasonable cause for failing to file and you are up-to-date on your US tax returns.

How to File the FBAR

The FBAR must be filed electronically through the BSA e-Filing System. In order to complete the form, you’ll need the following information:

  • Your name, Social Security Number (SSN) or ITIN and address
  • The names, addresses and SNN/ITIN of all joint owners of the account
  • The names and addresses of your foreign bank(s)
  • The type of account – bank, securities or other
  • Your foreign bank account number for each account
  • The maximum balance of your foreign financial account during the year, converted to US dollars

How Should I Proceed with FBAR Filing?

Consulting with a tax professional is always recommended when it comes to US expat taxes and FBAR filings, as both can be quite complex! In any instance, you should first carefully review your foreign bank account information to see if any warrant an FBAR filing. If so, gather all the necessary information and head to the BSA e-Filing website, where your FBARs must be electronically submitted. Head over to our blog for more details about filing your FBARs.

This post was written by David McKeegan, co-founder of Greenback Expat Tax Services. Greenback specializes in the preparation of US expat taxes for Americans living abroad. Greenback offers straightforward pricing, a simple, hassle-free process, and CPAs and IRS Enrolled Agents who have extensive experience in the field of expat tax preparation. For more information about FBAR, expat taxes or Greenback, please visit greenbacktaxservices.com.