FBAR Filing Requirements for U.S. Expats

U.S. expats must file an FBAR (FinCEN Form 114) for any year in which the combined value of their foreign financial accounts exceeded $10,000 at any point, even for one day. The FBAR is due April 15 with an automatic extension to October 15, it is filed with FinCEN rather than the IRS, and it carries no tax. It is an information report. Missing it does carry penalties, up to $16,536 per violation for a non-willful violation, which is why the first thing to know is whether you are required to file.

What the FBAR is

The FBAR is the Report of Foreign Bank and Financial Accounts, filed on FinCEN Form 114. It exists under the Bank Secrecy Act, not the Internal Revenue Code, which is why it goes to the Treasury’s Financial Crimes Enforcement Network and not to the IRS. The IRS enforces it, but the form itself never touches your tax return.

Nothing on the FBAR creates tax. It lists your foreign accounts and their highest balances for the year, and that is all. Income earned in those accounts is taxed through your Form 1040 the same way it would be if the account were in Ohio. The FBAR is how the government knows the accounts exist.

Who must file an FBAR

You must file an FBAR for a calendar year if all five of the following are true:

1. You are a U.S. person: a U.S. citizen, a green card holder, a U.S. resident for tax purposes, or an entity formed under U.S. law such as a corporation, partnership, LLC, trust, or estate.
2. You have one or more financial accounts.
3. The account is located in a foreign country.
4. You have a financial interest in the account, or signature or other authority over it.
5. The combined value of all such accounts exceeded $10,000 in U.S. dollars at any time during the year.

Living abroad does not change any of this. A U.S. citizen who has lived in Germany for twenty years and banks only in Germany meets the first condition, and every account in Germany meets the third. The FBAR follows the person, not the residence.

The same is true for people who did not know they were U.S. persons. If you were born in the United States and moved away as a child, or hold citizenship through a parent, you are a U.S. person for FBAR purposes whether or not you have ever filed a U.S. return.

Which accounts count

A foreign financial account is any financial account held at an institution located outside the United States. What matters is where the account is, not who owns the bank. An account at the Frankfurt branch of a U.S. bank is a foreign account. An account at the New York branch of a German bank is not.

For expats, the accounts that most often push the total past $10,000 are the ones people do not think of as bank accounts:

• Foreign pension and retirement accounts, including UK SIPPs, Australian superannuation accounts, and Canadian RRSPs. Most are reportable when you hold a financial interest in them.
• Foreign brokerage and investment accounts, including accounts that hold only mutual funds.
• Foreign life insurance or annuity contracts with a cash value.
• Joint accounts with a non-U.S. spouse. You report the full value of the account, not your half.
• Business accounts you can sign on. If you are an officer or employee with signature authority over your employer’s foreign account, that account counts toward your personal FBAR even though the money is not yours.

Accounts and assets that do not count: foreign real estate held directly, precious metals and cash held directly, and personal property. Cryptocurrency held directly is not currently reportable on the FBAR. FinCEN has announced plans to amend the FBAR regulations to address virtual currency, but that change has not been finalized.

Signature authority. You have signature authority when you can control what happens to the money in an account by communicating directly with the institution, alone or together with someone else. It does not require ownership. A finance manager who can wire funds from a company account has signature authority over that account.

Exceptions

A small number of U.S. persons with foreign accounts are exempt from filing. These exceptions rarely apply to individual expats, so if none of them describes you, move on.

• You have a financial interest in or signature authority over an account at a U.S. military banking facility operated abroad for U.S. government operations.
• You are an officer or employee of a bank regulated by a U.S. banking authority, and you have no personal financial interest in the account.
• You are an officer or employee of a U.S. corporation with publicly traded equity, and you have no personal financial interest in the account.
• You are an officer or employee of a U.S. corporation with more than $10 million in assets and more than 500 shareholders, and you have no personal financial interest in the account.

The FBAR deadline

The FBAR is due April 15 for the previous calendar year. Every filer receives an automatic extension to October 15. You do not have to request it, file anything, or explain anything; if you file by October 15, you are on time. Extensions past October 15 are granted only in specific circumstances, such as federally declared disasters.

If October 15 has passed and the FBAR is not filed, the report is delinquent. That is not a dead end. The delinquent FBAR submission procedures let most non-willful filers catch up without penalty, and they are explained in our guide to filing delinquent FBARs.

How to file the FBAR, step by step

1. Gather the details for each account. You need the name and address of the institution, the account number, the type of account, and the maximum value of the account at any point during the year. Bank statements are the usual source. FinCEN allows the maximum value to be a reasonable approximation based on available records.

2. Convert each maximum value to U.S. dollars. Use the Treasury Reporting Rates of Exchange for December 31 of the year you are reporting, even if the account peaked in a different month. The rates are published by the Treasury and are the only rates FinCEN accepts.

3. Complete FinCEN Form 114 in the BSA E-Filing System. The form is filed online at bsaefiling.fincen.gov. There is no paper option for individuals. You can file it yourself or authorize a preparer to file it for you with FinCEN Form 114a.

4. Handle joint accounts and spouses. Each joint owner reports the full value of the account. Married couples can file one FBAR covering both spouses only if every reportable account is jointly owned and both spouses sign Form 114a. If either spouse has a separate foreign account, each spouse files a separate FBAR.

5. Keep the confirmation and your records. Save the BSA acknowledgment for every year you file. Keep the account records that support the values you reported for five years.

FBAR penalties

There are two tiers of civil penalty, and the distinction is whether the failure was willful.

Non-willful. If you did not know about the requirement, the penalty is up to $16,536 per violation. Following the Supreme Court’s 2023 decision in Bittner, a violation is one unfiled report, not one unreported account. In practice, non-willful filers who come forward before the IRS contacts them may pay no penalty at all.

Willful. If you knew about the requirement and did not file, the penalty is the greater of $165,353 or 50 percent of the account balance at the time of the violation, per violation, per year. Willful failures can also be prosecuted criminally, with fines and imprisonment. Willfulness can include deliberately not finding out; ignoring a bank’s written notice about U.S. reporting is the kind of fact the IRS may use to argue it.

When you are not sure whether an account needs to be reported, report it. There is no penalty for over-reporting.

Missed an FBAR? Your options

If you missed one or more FBARs, the right fix depends on your tax returns. If every return was filed and all foreign income was reported, you can usually file the late FBARs under the Delinquent FBAR Submission Procedures with no penalty. If income was also unreported or returns were not filed, the Streamlined Filing Compliance Procedures cover both problems in one submission. Filing late FBARs quietly, with no explanation, is the one option the IRS specifically discourages. Our guide to delinquent FBAR submission walks through each path.

FBAR vs Form 8938

Many expats who file an FBAR also file Form 8938, the FATCA statement of specified foreign financial assets. The two overlap but are not the same form: Form 8938 goes to the IRS with your tax return, has much higher thresholds for people living abroad, and covers some assets the FBAR does not. The full thresholds are in our Form 8938 guide. The table below shows which assets are reported on which form.

Type of Account	Form 8938	FBAR
Financial (deposit and custodial) accounts held at foreign financial institutions	Yes	Yes
Financial account held at a foreign branch of a U.S. financial institution	No	Yes
Financial account held at a U.S. branch of a foreign financial institution	No	No
Foreign financial account for which you have signature authority	No, unless you otherwise have an interest in the account as described above	Yes, subject to exceptions
Foreign stock or securities held in a financial account at a foreign financial institution	The account itself is subject to reporting, but the contents of the account do not have to be separately reported	The account itself is subject to reporting, but the contents of the account do not have to be separately reported
Foreign stock or securities not held in a financial account	Yes	No
Foreign partnership interests	Yes	No
Indirect interests in foreign financial assets through an entity	No	Yes, if sufficient ownership or beneficial interest (i.e., a greater than 50 percent interest) in the entity.
Foreign mutual funds	Yes	Yes
Domestic mutual fund investing in foreign stocks and securities	No	No
Foreign accounts and foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantor	Yes, as to both foreign accounts and foreign non-account investment assets	Yes, as to foreign accounts
Foreign-issued life insurance or annuity contract with a cash value	Yes	Yes
Foreign hedge funds and foreign private equity funds	Yes	No
Foreign real estate held directly	No	No
Foreign real estate held through a foreign entity	No, but the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estate	No
Foreign currency held directly	No	No
Precious Metals held directly	No	No
Personal property, held directly, such as art, antiques, jewelry, cars and other collectibles	No	No
“Social Security”- type program benefits provided by a foreign government	No	No

Frequently Asked Questions

Get FBAR help

Tax Samaritan prepares and files FBARs for U.S. expats as part of annual tax preparation and as a standalone service, and handles late FBARs through the IRS procedures above. Our FBAR and FATCA compliance page explains what is included. To get started, request a free tax quote and an enrolled agent will review your accounts and tell you exactly what needs to be filed.