FBAR Filing Services
In addition to your annual US tax return filing responsibility, if you are a US person and have a foreign bank account or are a signatory on a foreign bank account, you are required to file a report called an FBAR or FinCEN Form 114 (formerly known as TD F 90-22.1). This is a separate filing from your tax return, with an independent filing date of June 30 with no extensions.
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.
United States person includes U.S. citizens; U.S. residents; entities, 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; and trusts or estates formed under the laws of the United States.
Failure to file FinCEN Form 114 by the June 30 deadline can carry a penalty of $10,000 per account.
FAQ on FBAR
The FBAR – The annual foreign bank account reporting form (formerly TD F 90-22.1 but from this year is now called FinCEN Form 114) is due again. Please note, this Form can now only be filed online.
What is an FBAR?
FBAR is the acronym for the Foreign Bank Account Report. It must be filled annually by June 30 if the aggregate of the highest balances in your foreign (non-US) bank accounts is greater than $10,000 (approx. £6080). Depending on your cash and asset value, you may also be required to fill out Form 8938 for the purpose of declaring https://filethetax.com/website/assets that exceed the $200,000 (approx.. £121,602).
I sign checks for my local Scouts; do I need to include the highest balance for that account too?
Yes, remember this is not a tax return; so you will not have to pay as a result. This is simply a report of where you have financial interest that is not in the US.
What about my joint accounts?
There is a place on the form for reporting joint accounts. If the joint account holder is a US person you will need to provide their Social Security Number. If not, then leave that field blank.
I am a US person with a company abroad? Does my company have to report as well?
Your company does not need to report as well but details of the accounts need to be provided to you for you to comply. You need to include any non-US bank accounts, even those bank accounts that are not yours but for which you have signing authority.
How do I convert from my local currency to US Dollars?
Convert foreign currency by using the Treasury’s Financial Management Service under Exchange Rates found in Reference & Guidance at http://www.fms.treas.gov. Use the exchange rate from December 31, 2013.
What if none of my accounts exceeds $10,000?
The rule is that it is the aggregate of the highest balance in all non-US bank accounts held during the year. For example, if you have three non-US bank accounts and two of them have $2 each as the highest balance and the third had $9,997, you will have to file the FBAR for each missed year, declaring ALL of your accounts. Please note, the total is GREATER than $10,000.
What if I closed my bank accounts during the year?
These still need to be included if they existed at any time between January 1 and December 31.
I won the lottery and I had $2 million in my current account which I moved to my savings account, so I have to report it twice?
Yes, but remember, this is only a reporting task, not a tax issue. Nonetheless, it is important that you are accurate with your information regarding the highest balances in all accounts at any given time in the calendar year.
Do I report half of the highest balances in my joint bank accounts?
No, you must report the full amount.
What if I don’t file this form at all?
The IRS and Department of Justice are actively looking for all US persons who are not compliant with their filing. If you determine that you are required to file this form but you do not submit it, you are at risk of a fixed $10,000 fine for EACH ACCOUNT you did not report for EACH YEAR you did not file. These forms can be time consuming, but are straight forward. The bottom line is to file them and on time. Read what can happen if you don’t.
I didn’t know about these forms! How do I make that right and get up-to-date?
Don’t panic. Your first course of action should be to contact your tax adviser for advice on getting back into the system with these or any other filing requirements. This will at least show effort that you wish to become compliant. The idea is to become compliant with all your US taxes voluntarily before the IRS finds you. Here is some information on Voluntary Disclosure.
I reported my interest income on my non-US bank accounts, but I have not done the FBAR Form as I did not know about it.
This is a situation which is recognized by the IRS and it is possible to catch up with your FBAR filings without incurring penalties. Speak with your tax adviser about this.
This form is fairly straight forward to prepare, however, it does take time to collate the information so do not leave it to the last minute