FinCEN Form 114

FinCEN Form 114, commonly referred to as the FBAR (Report of Foreign Bank and Financial Accounts), is a mandatory filing requirement for U.S. persons who have a financial interest in, or signature authority over, foreign bank accounts and certain other financial accounts. Here's some important information about the FBAR:

Reporting Threshold: If the aggregate value of your foreign financial accounts exceeds $10,000 at any time during the calendar year, you are required to file the FBAR. The threshold includes the combined value of all your foreign accounts, even if they are held at different financial institutions.

Types of Reportable Accounts: The FBAR covers a wide range of financial accounts, including bank accounts, savings accounts, checking accounts, investment accounts, mutual funds, brokerage accounts, and even certain foreign insurance policies with cash value. It's important to note that virtual currency accounts, such as cryptocurrency wallets held on foreign exchanges, may also be considered reportable accounts.

Filing Deadline and Extension: The FBAR is filed separately from your income tax return. The annual filing deadline for the FBAR is April 15th, with an automatic extension until October 15th. Unlike income tax extensions, no additional extension beyond October 15th is granted.

Electronic Filing: The FBAR must be filed electronically through the Financial Crimes Enforcement Network's (FinCEN) BSA E-Filing System. Paper filings are not accepted.

Reporting Requirements: When filing the FBAR, you are required to provide detailed information about each foreign account, including the account number, the name and address of the financial institution, the type of account, and the maximum value of the account during the year. Additionally, if you have signature authority but no financial interest in the account, you must disclose the details of the account holder.

Penalties: Failing to file the FBAR or filing it inaccurately or late can result in significant penalties. The penalties can range from non-willful penalties (up to $10,000 per violation) to willful penalties (up to $100,000 or 50% of the account balance per violation), with potential criminal penalties in severe cases.

Foreign Financial Account Reporting (Form 8938): The FBAR requirement is separate from the requirement to report foreign financial accounts on Form 8938 (Statement of Specified Foreign Financial Assets). While there may be overlap in certain circumstances, it's important to understand and comply with both reporting obligations.

It's essential to consult with a qualified tax professional who specializes in international tax matters to ensure compliance with FBAR reporting requirements. They can provide guidance specific to your situation, help you accurately report your foreign accounts, and assist in navigating the complexities of international tax compliance.