FBAR & FATCA filing requirements for Americans abroad
When you leave the U.S. behind to live and work abroad you gain a whole new set of tax documents to add to your yearly filing requirements. The Foreign Bank Account Report (FBAR) and FATCA Form 8938 are two common and important forms you may have to file, and it’s crucial to do it right—filing incorrectly or not filing when you’re supposed to can lead to penalties ranging from a monetary fine to losing your passport.
Understanding your expat tax obligations is key to avoiding a problem with the IRS, so below we’ll dive into the FBAR and FATCA filing requirements for Americans abroad. If you’re unsure which tax documents you need to file or haven’t filed taxes in a few years, it’s always best to trust your taxes to an expat tax professional.
Ready to file your documents? Get started with Virtual Expat Tax Preparation from H&R Block Expat Tax Services.
Do you file an FBAR, FATCA Form 8938, or both?
A common question U.S. expats ask us is if they need to file an FBAR or Form 8938. The answer is: You could have to file one, none, or both. While they both exist to report financial assets to the government, they differ in a number of ways.
We'll dive into the FBAR and FATCA summary and individual FBAR and FATCA filing requirements in more detail below, but here’s the quick who-what-where-when comparing the two:
|FATCA Form 8938||FBAR (FinCEN Form 114)|
U.S. citizens and certain U.S. corporations, trusts, and partnerships who hold assets in foreign financial accounts and also fall in the following thresholds:Citizens living in the U.S.:
Citizens living outside the US:
Other specified domestic entities:
|U.S. citizens, resident aliens, trusts, estates, and domestic entities whose assets in foreign financial accounts exceed a total of $10,000 at any time during the calendar year.|
|Where it gets filed||With your yearly IRS tax return||With FinCEN, the Financial Crimes and Enforcement Network of the U.S. Treasury Department|
|Filing deadline||By the normal U.S. expat tax return due date, normally June 15.||By May 17 (5-month automatic extension to Oct 15)|
|Penalties for failing to file||You're fined up to $10,000 for failure to disclose and then another $10,000 every 30 days after the IRS notifies you of a failure to file. While the maximum fine is a penalty of $60,000 the IRS may also apply criminal penalties.||Currently, you're fined up to $10,000; if the IRS determines it was willful, that fine goes up to the greater of $100,000 or 50% of account balances. Criminal penalties may also apply.|
FATCA filing requirements
The Foreign Account Tax Compliance Act (FATCA) 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 requirements impact U.S taxpayers and overseas financial institutions:
- U.S. taxpayers with foreign accounts and assets may need to file Form 8938: Statement of Specified Foreign Financial Assets with their annual U.S. Income Tax Return
- FATCA reporting requirements for financial institutions overseas mandates them to disclose information about U.S. citizens who hold accounts overseas
Form 8938 is the same as an FBAR in many ways. However, it has higher reporting thresholds and requires you to disclose certain "non-account" assets such as:
- Business and trust ownership
- Certain contractual investments with foreign parties
FATCA reporting deadline for 2019 & 2020
As Form 8938 is filed with your U.S. income tax return, due dates applicable to Form 1040 apply. Automatic extensions for expats living abroad or additional extensions to October 15 can provide more time to collect needed information from foreign financial institutions and determine your filing requirements.
You can always see up-to-date FATCA declaration deadlines on our expat tax deadlines page.
Who files? Form 8938 filing thresholds
Who is subject to FATCA reporting? The filing thresholds differ depending on where you lived during the tax year.
If you live within the U.S. the entire tax year, you must file Form 8938 if the value of your reportable foreign assets exceeds either of these levels:
- More than $50,000 (or $100,000 if married filing jointly) at the end of the year, or
- More than $75,000 (or $150,000 if married filing jointly) at any time in the year
Expats living abroad have an increased reporting threshold. You don’t need to complete this form unless your foreign assets exceed either:
- $200,000 (or $400,000 if married filing jointly) at the end of the year, or
- $300,000 (or $600,000 if married filing jointly) at any time during the year
FATCA 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 FATCA information, 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.
FBAR filing requirements
By law, you must file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts, or "FBAR") if both of the following are true:
- You're a U.S. citizen or resident taxpayer or domestic business entity
- You own, control, or have signature authority over foreign bank and financial accounts with a combined value over $10,000
FBAR filing deadline for 2021
The FBAR is filed separately from your tax return and does not go to the IRS. Your FBAR is filed online through the BSA E-Filing System. The 2021 deadline for the FBAR is May 17, and an automatic five-month extension to October 15 is available if your FBAR is filed after the initial tax deadline.
You can always see up-to-date FBAR reporting deadlines on our expat tax deadlines page.
Who files? FinCEN Form 114 filing thresholds
You're probably required to file an FBAR if you're:
- A U.S. citizen or green card holder
- Using personal or business 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.
Not sure if you should file FBAR vs. FATCA Form 8938? The experts at H&R Block are here to help.
Confused whether you should file an FBAR, FATCA declaration, or both? Don't go it alone—your H&R Block tax advisor will know exactly what to do with your specific situation. Ready to file?
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