US Insights
Foreign Bank Account Reports – FBARs
What is an FBAR
An FBAR, Foreign Bank Account Report, also known as FinCEN Form 114, is a form a US taxpayer needs to file every year to report accounts located outside of the United States.
An FBAR must be filed to report any account for which a taxpayer has a financial interest in or signature or other authority over located outside the United States if the aggregate value of those foreign financial accounts exceeds $10,000 at any time during the calendar year reported.
It does not matter whether the account produced any taxable income or not it will still need to be reported on a US taxpayer’s FBAR.
Why is an FBAR important
FBAR’s are filed with FinCEN, the US Treasury Department’s Financial Crimes and Enforcement Network rather than the IRS and exists to help combat tax evasion by specifically reporting money and assets held in foreign banks and intermediaries by a US taxpayer.
Failing to file an FBAR can mean facing heavy penalties and US taxpayer’s could be subject to monetary penalties and/or criminal penalties for FBAR reporting and/or recordkeeping violations depending on the circumstance. The maximum monetary penalties are adjusted annually for inflation.
Who needs to file an FBAR
- US Citizens
- US Residents (including Aliens)
- Estates
- Domestic Entities
Married couples can file a joint FBAR only if the spouse has interest in non-US accounts held jointly. If the spouse holds one non-US account separately, they must file a separate FBAR.
If filing jointly both the taxpayer and their spouse must file their FBAR on time and complete and sign the authorisation form, FinCEN Form 114A, authorising that they are filing jointly.
What to report on an FBAR
All non-US accounts should be reported on the FBAR. This includes:
- Bank accounts
- Securities accounts
- Other financial accounts, eg. Pension accounts
- Accounts for which signature authority is held
For each account the following must be reported on the FBAR, and the taxpayer must keep records with this information:
- Name on the account
- Account number
- Name and address of the foreign bank
- Type of account
- Maximum value of the account during the calendar year
When does an FBAR need to be filed by
The deadline for filing an FBAR is 15th April, this can be automatically extended to 15th October if required. US taxpayer’s do not need to request this extension.
In exceptional circumstances, such as a natural disaster, the US government may extend the date a taxpayer’s FBAR is due.
Generally, US taxpayers are also required to keep records of the previous five years from the due date of the FBAR.
Would you like to know more?
If you have any questions about the above may impact you or your business, please get in touch with your usual Blick Rothenberg contact or via the form below
Personal tax is one of the most complex areas of wealth management and can significantly erode your wealth over time
Blick Rothenberg is considered to be market leaders in the taxation of non-UK domiciled individuals and offshore trusts, as well as cross-border personal taxation.
We have a strong base of clients in the UK and a broad and longstanding international focus too, acting for a large number of non-UK domiciled individuals and international families. So, we understand the complexities that US citizens face when living, working and operating businesses in the UK.
Whether you are a start-up entrepreneur, a wealthy family with complex affairs, or a business executive, our dual-qualified team of tax advisers will look after your US UK personal tax affairs as well as those of your business.
If you wish us to contact you or want to discuss your situation please complete the form on this page and one of our team will be in touch.
Contact our team
You may also be interested in
US Insights – US Expansion – US Estimated Tax System
US Insights – US Expansion – 2024 Year End
