What is the FBAR (Foreign Bank Account Report)?
Every year, under the law known as the Bank Secrecy Act, you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts. You report the accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114.
If you’re an expat with foreign financial accounts, ignoring your FBAR requirements can result in expensive penalties($10,000 per non-willful violation and up to 50% of the balance in the accounts per willful violation) and other legal consequences. The United States government has stepped up efforts to investigate and prosecute expats who fail to report their foreign-held financial assets. This means that the risk of non-compliance with FBAR regulation is greater than ever before.
What is the difference between FBAR and FATCA?
The FBAR is reported to the FinCEN (Financial Crimes Enforcement Network) and is not part of your taxes. FATCA, on the other hand, does go to the IRS and is a part of your annual tax return filing(form 8938) .
In addition, the account balance requirements for filing FATCA are much higher. The reporting threshold amount for FBAR is $10,000, but $300,000(for single) for FATCA.
Who Must File and What Needs to Be Filed?
A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:
a financial interest in or signature or other authority over at least one financial account located outside the United States if the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
FBAR Deadlines
The FBAR must be filed by April 15th every year. If you miss this deadline, there is an automatic extension to October 15th.
Catching up using the Streamlined Procedure gives US expats the opportunity to avoid IRS fines while retro-claiming the exemptions allowing them to minimize their US tax liability – most often to zero.
What is the FBAR (Foreign Bank Account Report)?
Every year, under the law known as the Bank Secrecy Act, you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts. You report the accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114.
If you’re an expat with foreign financial accounts, ignoring your FBAR requirements can result in expensive penalties($10,000 per non-willful violation and up to 50% of the balance in the accounts per willful violation) and other legal consequences. The United States government has stepped up efforts to investigate and prosecute expats who fail to report their foreign-held financial assets. This means that the risk of non-compliance with FBAR regulation is greater than ever before.
What is the difference between FBAR and FATCA?
The FBAR is reported to the FinCEN (Financial Crimes Enforcement Network) and is not part of your taxes. FATCA, on the other hand, does go to the IRS and is a part of your annual tax return filing(form 8938) .
In addition, the account balance requirements for filing FATCA are much higher. The reporting threshold amount for FBAR is $10,000, but $300,000(for single) for FATCA.
Who Must File and What Needs to Be Filed?
A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:
a financial interest in or signature or other authority over at least one financial account located outside the United States if the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
FBAR Deadlines
The FBAR must be filed by April 15th every year. If you miss this deadline, there is an automatic extension to October 15th.
Catching up using the Streamlined Procedure gives US expats the opportunity to avoid IRS fines while retro-claiming the exemptions allowing them to minimize their US tax liability – most often to zero.