- 1 Do You Need to File an FBAR?
- 2 FBAR Even When No Tax Return is Required
- 3 Foreign Account Filing is Not Limited to US Citizens or US Residents
- 4 No FBAR Exception for Foreign Residence
- 5 More than $10,000 in Aggregate Total, Not Per Account
- 6 Non-US Person 6013(g) and FBAR Filing
- 7 Who has to File the FBAR is Complicated
- 8 About Our International FBAR & FATCA Law Firm
Do You Need to File an FBAR?
Do You Need to File an FBAR: One very common question that US Taxpayers with foreign accounts may ask themselves around tax season is whether or not they are required to file an FBAR. The FBAR is used to report foreign bank and financial accounts to FinCEN (Financial Crimes Enforcement Network). The form is due at the same time a tax return is filed — and is generally on an automatic extension through October. The failure to file the FBAR form may result in significant fines and penalties. Here are 5 facts to consider when determining whether you need to file an FBAR or not:
FBAR Even When No Tax Return is Required
The FBAR is required for US Persons (who meet the threshold). If you are a US Person, then whether or not you are required to file an actual tax return does not determine whether or not you have to file an FBAR. In other words, if a US Person meets the threshold reporting requirements for filing an FBAR, then they have to file the form — whether or not they meet the threshold filing requirements for filing a tax return in that same year.
Foreign Account Filing is Not Limited to US Citizens or US Residents
The United States follows a worldwide income taxation model and reporting model for all US persons. Thus, the FBAR is not limited to US Citizens; any person who falls into the category of being a “US Person” may be required to file the FBAR.
No FBAR Exception for Foreign Residence
FinCEN Form 114 filing is based on US Person status and not the actual country where the person resides. Therefore, even if a US person resides outside of the United States — they are still required to file the annual FBAR if they meet the FBAR filing requirement threshold.
More than $10,000 in Aggregate Total, Not Per Account
It is important to remember that the “more than $10,000” threshold is not based on individual account value. Rather, the FBAR filing threshold is based on an annual aggregate total of all accounts. It does not matter whether the account generates any income nor if the person opened the account before becoming a US Person. The filing of the FBAR represents a snapshot of the account balance(s) and if on any day of the year the total value of all accounts combined exceeds $10,000, then the FBAR may be required.
Non-US Person 6013(g) and FBAR Filing
Sometimes, a non-US person and their US person spouse will make a 6013(g) election for the nonresident to be treated as a US person for tax filing. The general rule is that a non-US person who makes this type of election is not then automatically required to file the FBAR based on making this election alone if they are not otherwise a US person, since the FBAR is not a tax filing.
Who has to File the FBAR is Complicated
Like most anything involved in the world of international tax filing and reporting — the FBAR is much more complicated than meets the eye. Some US persons may be required to file the form, even if they reside overseas and are not even required to file a US tax return. If a US Person is unsure whether they have to file the FBAR, they should reach out to a Tax Law Specialist to get the lay of the land.
About Our International FBAR & FATCA Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
Contact our firm for assistance.