The FBAR Threshold Requirements: What is ‘Aggregate Total?’

More than $10000 FBAR Threshold

FBAR Annual Aggregate Total Threshold Requirement

What is FBAR Annual Aggregate Total Threshold Requirement: When it comes to filing the annual FBAR (Foreign Bank and Financial Account Reporting Form) on FinCEN Form 114, some taxpayers (understandably) get confused by the “more than $10,000” reporting requirement. A common question we receive is whether or not it is more than $10,000 per account — or in total for all the accounts.  The distinction is important, because the failure to file the FBAR accurately can result in fines and penalties — although oftentimes the fines can be avoided, minimized or abated with FBAR Amnesty. Let’s go through the basics of the FBAR Annual Aggregate Total Threshold Requirement and when it needs to be filed.

What does Annual Aggregate Threshold for FBAR Mean?

The threshold for FBAR filing is technically more than $10,000 in “annual aggregate total” of all accounts combined — on any given day of the year.  It is an annual aggregate total, which means it is not $10,000 per account, but rather if the maximum balances of all accounts, when totaled together, exceeds $10,000.

As provided by FinCEN:

• • • • Who Must File an FBAR

        • A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.  

      • Financial Account

        • A financial account includes, but is not limited to, a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution).

        • A financial account also includes a commodity futures or options account, an insurance policy with a cash value (such as a whole life insurance policy), an annuity policy with a cash value, and shares in a mutual fund or similar pooled fund (i.e., a fund that is available to the general public with a regular net asset value determination and regular redemptions)

      • Foreign Financial Account

        • A foreign financial account is a financial account located outside of the United States. For example, an account maintained with a branch of a United States bank that is physically located outside of the United States is a foreign financial account.

        • An account maintained with a branch of a foreign bank that is physically located in the United States is not a foreign financial account.

FBAR Reporting Continues to Evolve

In conclusion, the more than $10000 FBAR threshold is understandably confusing. There is no FinCEN requirement that the specific account balance exceed $10,000. Rather, the determining factor is whether the annual aggregate total of all accounts combined exceeds $10,000 on any given day of the year. If you meet the threshold for reporting, then all of the accounts should be included on the FBAR, which needs to include all dormant accounts as well.

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