Reports of Foreign Bank Account (FinCEN Form 114)
In addition to filing US tax returns and related informational forms, a US person may also be required to submit a Report of Foreign Bank Account, otherwise known as an "FBAR". Financial and criminal penalties may apply for failure to meet FBAR filing requirements.
An FBAR is a report submitted to the US Department of the Treasury Financial crimes network detailing all your "accounts" situated outside the US.
United States persons are required to file an FBAR if:
- The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
- The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
Most report the details of their bank accounts, but you may also have to include:
- Non-US securities accounts
- Non-US mutual funds, life insurance or annuity contract
- Non-US retirement accounts like Superannuation
- Accounts that you don’t own but can control or sign for
The requirement to file is there each calendar year if the accumulated highest balance of all of the non-US accounts (including any superannuation funds) is over US$10,000 in any calendar year. In other words, take the highest balance of each account for the calendar year and add them together. If that equates to more than US$10,000, you have an FBAR filing requirement for that year.
All accounts must be included on the FBAR for any year you need to file, not just the account(s) with a high balance.
A United States person includes but is not limited to US citizens, US residents, and Green card holders. A US person can also be an entity, including but not limited to corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States. Finally, trusts or estates formed under the laws of the United States are also considered a United States person.
Many clients who contact us are compliant with their US tax returns but haven’t filed an FBAR. We assist with this by preparing the FBARs and, where possible, submitting them under an amnesty for protection from penalties. Contact us if this is your situation.
You can find more information about filing an FBAR here: File an FBAR.
