The FBAR: When (and How) to Report Money in Foreign Bank Accounts

As an American living abroad, it’s no surprise that you may have a financial account (banking, pension, investment, etc.) located outside of the U.S. But did you know that simply having financial assets in foreign accounts might trigger special reporting requirements? It’s true, and the main reporting requirement is known as an FBAR (Report of Foreign Bank and Financial Accounts). The actual form you’d fill out come Tax Day is FinCEN Form 114.

Below we’ll run through the basics of what you should know about the FBAR, including:

• What an FBAR is
• Who files an FBAR
• FBAR deadlines
• Filing instructions
• Penalties for not filing

Need to submit an FBAR? H&R Block Expat Tax Services makes it simple to file your expat taxes and FBAR together using H&R Block’s online expat tax services, designed for U.S. expats abroad.

What is an FBAR?

What is “FBAR” and what does it mean? FBAR is another name for FinCEN Form 114 (formerly called the Report of Foreign Bank and Financial Accounts), and is used to report foreign financial accounts that held a combined amount of $10,000 or more at any point during the calendar year.

The FBAR exists to combat tax evasion, specifically by having U.S. citizens report money and assets in non-U.S. banks. Rather than filing with the IRS, you submit an FBAR to FinCEN, the U.S. Treasury Department’s Financial Crimes and Enforcement Network. Failing to file means facing heavy penalties, so it’s always in your best interest to stay up to date.

Most expat tax filers will just report the balance in their foreign bank accounts, but you may also have to report:

• Foreign assets like stock that’s held by foreign financial institutions
• Assets in a foreign branch of a U.S. financial institution
• Foreign mutual funds, life insurance or annuity contract
• Foreign retirement accounts
• Accounts that you don’t own but are able to control

Who files an FBAR?

Who files an FBAR? U.S. persons (U.S. citizens, Green Card holders, resident aliens, and dual citizens) are required to file an FBAR if the combined balance of all the foreign accounts you own or have a financial interest or signature authority is more than $10,000 at any point during the calendar year. This is true regardless of whether you live in the U.S. or abroad.

Financial interest is determined based upon who is the owner of record or legal title. Signature authority means that you have some level of control over the disposition of assets through direct communication with the institution.

For example, if you’re a signatory on an employer’s foreign bank account, you have signature authority and should report the account on your FBAR.

Foreign financial accounts include bank accounts, securities accounts, and certain foreign retirement arrangements. Accounts located outside of the 50 states, D.C., the U.S. possessions, and tribal territory are considered “foreign” accounts.

For example, suppose you are a U.S. citizen living in Brazil. You have two Deutsche Bank checking accounts and a poupança account at a Brazilian bank that all together held $15,000 during the tax year. In this case, you must file an FBAR even if each account only held $5,000.

Your foreign retirement accounts may also have to be included. For example, Canadian Registered Retirement Savings Plans (RRSP), Canadian Tax-Free Savings Accounts (TFSA), Australian Superannuation funds, and Hong Kong Mandatory Provident funds are all foreign financial accounts reportable on the FBAR.

Ready to file FinCEN Form 114? Get started and either file an FBAR only or go the traditional route and file your U.S. taxes and FBAR together.

FBAR deadlines 2023

The FBAR is an annual filing and if you want to avoid penalties, make sure to file FinCEN Form 114 by the due date.

The FBAR 2023 deadline is the same as your income tax return due date, usually April 15 (with an automatic extension to October). Check our expat tax deadline page for up to date FBAR deadlines for tax year 2022 and 2023.

Ready to file FinCEN Form 114? Get started and file your U.S. taxes and FBAR together.

How to file FBAR filing instructions

Wondering how to file an FBAR online? It’s not as daunting as it may seem. Your FBAR must be filed electronically online. You can do this either through FinCEN’s BSA e-filing system or you can file your FBAR alongside your taxes with a tax preparation service that offers FBAR submissions, such as H&R Block Expat Tax Services.

Married taxpayers should take note: In very few situations are you able to submit a joint FBAR. If you own accounts jointly with your spouse, and either none or only one of you own a separate account, you are able file a single report. Otherwise, each spouse must file their own. If you are filing prior year or an amended form, you must still use FinCEN’s website to do so and you must file separate accounts.

How to File an FBAR and U.S. Taxes Together

1. Head over to our Ways to File page, choose to file taxes yourself or with an advisor, register online and complete your tax organizer.
   
2. We’ll assign you the right advisor for your situation (if you choose to file with an advisor)
   
3. We prepare your U.S. tax return and FBAR
   
4. You review and pay for your FBAR and return.
   
5. We file your return with the IRS and FBAR with FinCEN.
   

File Your FBAR Now!

Penalties for not filing an FBAR

What happens if you don’t file an FBAR when you’re supposed to? In short, the answer here is penalties. Unless you’re trying to evade taxes there really aren’t any disadvantages of filing the FBAR. Not filing, however, costs you — under the current rules, if you’re required to file but either you do not file on time or if you do not correctly report your foreign accounts, you can be subject to FBAR penalties of up to $10,000 per violation even if you didn’t know you had to file.

The penalties are much steeper if you knowingly fail to file. If you’re aware of your requirement and do not file accurately, or if you don’t file it on time, you could get hit with a $100,000 penalty per violation or an even higher penalty, depending on your account balances at the time of the violation. In the end, it makes financial sense to stay in compliance.

Ready to file FinCEN Form 114? Get started and file your U.S. taxes and FBAR together.

What if I’ve never filed an FBAR but I should have?

If you’ve never filed an FBAR and you were supposed to, don’t panic — there’s a process called IRS Streamlined Filing Compliance Procedures that can help you get caught up on your FBAR filing without penalties.

Streamlined compliance procedures allow Americans to get caught up on past FBARs without penalties. If you can qualify for Streamlined Filing, we recommend you take advantage of the proceedings — penalties for delinquent FBARs range anywhere from a few hundred dollars up to a few hundred thousand for serious offenders. If you need to catch up on multiple years of FBAR filings, choose to file your taxes and FBAR with an advisor, and our international tax advisors can help you decide on the best course of action for your unique situation.

What else should I know about reporting foreign bank and financial accounts?

What else should you know about reporting foreign bank accounts? If you’re a U.S. expat, you may need to file more forms than just FinCEN Form 114.

Generally, U.S. citizens and resident aliens must report all worldwide income, including income from foreign trusts and foreign bank and securities accounts, such as interest income. To do this you’ll need to complete and attach Schedule B (Form 1040) to your tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and also requires U.S. citizens to report the country in which each account is located. If that describes you, you’ll answer “yes.”

In addition, you may also have to complete and attach FATCA Form 8938 to your return. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds.

Note that filing Form 8938 does not replace or otherwise affect your requirement to file FinCEN Form 114.

Get FBAR help with H&R Block Expat Tax Services

Have questions about filing? Ready to file FinCEN Form 114? No matter how complicated your U.S. tax return is, there’s an expat tax expert ready to help.

Ready to file FinCEN Form 114? Get started and file your U.S. taxes and FBAR together.

You may be interested in:

• Filing an FBAR from the UK
• Filing an FBAR from Canada
• Filing an FBAR from Australia
• Filing an FBAR from France
• Filing an FBAR from Germany
• Filing an FBAR from Japan