Understanding FBAR filing requirements are imperative to ensuring you’ll be ready to fill out forms the right way and remain compliant with the IRS.
Visit the Virtual Expat Tax Preparation page for more instructions and to get started filling out your FBAR and other forms, or find an office near you to talk with a tax advisor if you're in a country with an H&R Block tax office.
Recent financial reporting rules from FACTA will affect many U.S. expats living and working abroad. In addition, FBAR reporting applies to all U.S. persons with combined foreign account balances amounting over $10,000. If you haven’t been filing returns and FBARs, this could affect you. Not filing correctly could lead to additional taxes, fines or other penalties.
FBAR Filing Requirements
By law, you must file The Foreign Bank and Financial Accounts form (FBAR) if both of the following are true:
- You're a U.S. citizen or resident taxpayer or domestic business entity
- You own or control foreign bank and financial accounts with a combined value over $10,000
FBAR Filing Deadline
You file your FBAR separately from your tax return. You can do this online through the BSA E-Filing System. The deadline for the FBAR is April 17 to coincide with Tax Day, but an automatic six-month extension to October 15th is available if your FBAR is filed after April 17th.
Who Should File an FBAR?
You're probably required to file an FBAR if you're:
- A U.S. citizen or green card holder living abroad
- Using foreign accounts for everyday activities
The reporting requirement covers many types of foreign accounts maintained outside of the United States, including:
- Bank accounts
- Securities accounts
- Certain foreign retirement arrangements
The FBAR filing requirement isn’t new, but expats often overlook it. Recent international enforcement efforts have raised awareness of the requirement.
Don't worry. Your FBAR is only an informational document. No additional tax will be added. However, penalties can be levied if you don’t file or file late. It’s important to work with an expat tax advisor who understands your obligations.
FATCA Filing Requirements and Form 8938
The Foreign Account Tax Compliance Act (FACTA) is a part of the government’s efforts to combat offshore tax evasion. American expats of all income levels with foreign accounts and assets should know about it. FATCA filing requirements bring about two notable changes that affect all expats:
- U.S. taxpayers with foreign accounts and assets may need to file Form 8938: Statement of Specified Foreign Financial Assets, with their returns
- Financial institutions must report information about U.S. citizens who have accounts with their institutions
FATCA Due Dates
File Form 8938 with your return. The form was first required in 2011. You must file Form 8938 each year it applies. Form 8938 is the same as an FBAR in many ways. However, it requires you to disclose certain “non-account” assets such as:
- Business and trust ownership
- Certain contractual investments with foreign parties
File Form 8938 Filing (with your tax return) by April 17, 2018; June 15, 2018 for expats; or October 15, 2018 if you file an additional extension.
Form 8938 Filing Thresholds
If you live within the U.S., you must file Form 8938 if the value of your reportable foreign assets exceeds either of these levels:
- More than $50,000 - $100,000 if married filing jointly - at the end of the year
- $75,000 - $150,000 if married filing jointly - at any time in the year
Expats living abroad all year, or those who move back to the U.S. during the year, have an increased reporting threshold. You don’t need to complete this form unless your foreign assets are valued in excess of either:
- $200,000 - $400,000 if married filing jointly - at the end of the year
- $300,000 -$600,000 if married filing jointly - at any time during the year
Financial Institution Reporting
Many foreign financial institutions must report their U.S. citizen and resident clients’ accounts worth more than $50,000. If you’re an expat who hasn’t been filing returns and FBARs, this could affect you.
Example: The foreign banks you use might be required to obtain additional information about you. They would report this information to the U.S. government. The IRS can then determine if you’re not in compliance before you report yourself. In that case, many preferential disclosure options will be unavailable to you. You might face additional tax, penalties, and interest.