How to File an FBAR for Americans

What is the FBAR, how to file, and why? If you’re living and working abroad for the first time, you might not realize you still need to file tax paperwork even if you’re not making an income back home.

You might be spending your first year abroad, or maybe you’re here because you just found out about the FBAR and are freaking out. But in any case, everyone who is reading this is thinking WHY at this point. And you better get going, because it’s due April 15 (and also April 15th of every coming year until otherwise). . You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15. You don’t need to request an extension to file the FBAR.

What is an FBAR form?

The FBAR stands for “Foreign Bank Account Report.” It is a form that a citizen needs to fill out stating all their foreign bank accounts, including how much was in them at the end of the tax year.

Why does IRS need this?

This is an official IRS form to basically make sure American citizens abroad are not dodging being double taxed or to make sure there is no illegal money hiding out anywhere.

How long does it take to fill out?

Less than 10 minutes. You fill it out electronically. It’s really very easy, and you can call the IRS if you need help (and yes, they are helpful and not scary…unless you really are a fugitive or dodging tax).

Here is the official site to fill out your FBAR: https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

Note: Make sure you keep all your FBAR PDF files in a folder on your computer after you file. It’s good to keep personal reference each year.

Consequences for not filing?

Don’t take that risk, especially if you ever want to move back to the U.S. This is an official government form that is required for all U.S. citizens abroad (see below). If you are audited someday (and audits can look back 10 years btw), they are able to penalize you $10,000 for each year you didn’t file. More about consequences here.

Who needs to file?

United States persons are required to file an FBAR if:

1. 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
2. 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.

You’re exempt if:

• Certain foreign financial accounts jointly owned by spouses
• United States persons included in a consolidated FBAR
• Correspondent/Nostro accounts
• Foreign financial accounts owned by a governmental entity
• Foreign financial accounts owned by an international financial institution
• Owners and beneficiaries of U.S. IRAs
• Participants in and beneficiaries of tax-qualified retirement plans
• Certain individuals with signature authority over, but no financial interest in, a foreign financial account
• Trust beneficiaries (but only if a U.S. person reports the account on an FBAR filed on behalf of the trust)
• Foreign financial accounts maintained on a United States military banking facility.

For more information about filing your FBAR, please visit the IRS website: https://www.irs.gov/filing or the FBAR guideance guide.

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