Do You Need to File an FBAR?
Many U.S. citizens living outside the United States are surprised to learn that filing a tax return may not be their only reporting obligation. In addition to your federal income tax return, you may also need to file something called an FBAR.
You must file an FBAR if the combined total of your foreign financial accounts exceeded $10,000 at any time during the year.
What Is an FBAR?
FBAR stands for Foreign Bank Account Report. The official name is FinCEN Form 114, and it is filed electronically with the U.S. Treasury — not with your tax return.
It does not matter if:
• The balance only exceeded $10,000 for one day
• The funds were already taxed in another country
• You owe no U.S. income tax
If the threshold is met, the reporting requirement applies.
What Accounts Count?
Foreign financial accounts may include:
• Foreign checking and savings accounts
• Foreign investment or brokerage accounts
• Some foreign retirement accounts
• Joint accounts
• Accounts where you have signature authority
If the account is located outside the United States, it may be reportable.
Important: It’s $10,000 Combined
The $10,000 threshold applies to the total of all foreign accounts combined, not per account. If your combined balance exceeds $10,000 at any point during the year, an FBAR is generally required.
Is an FBAR a Tax?
No. The FBAR does not calculate tax and does not create tax by itself. It is strictly an informational reporting requirement. Many expats owe little or no U.S. income tax because of the Foreign Earned Income Exclusion or Foreign Tax Credit — but the reporting obligation may still exist.
What If You Didn’t Know?
Many expats miss FBAR filings simply because they were unaware of the rule. If the failure to file was non-willful, there are compliance options available to correct past years without penalties.
The Bottom Line
If you are a U.S. citizen or green card holder living abroad, it is important to determine whether FBAR reporting applies to you. If you are a U.S. taxpayer living abroad and are unsure whether you should be filing FBARs — or whether you may need to correct past filings — I invite you to contact me directly for a free initial consultation to review your situation and discuss your options.
This article is for general informational purposes only and does not constitute tax advice. FBAR requirements depend on individual facts and circumstances