The Foreign Bank Account Report or FBAR is an annual report that discloses the existence of bank accounts investment accounts retirement savings plans and similar financial accounts that are located in a financial institution that is outside of the United States.
If you are an American with bank accounts or other forms of financial accounts located outside of the United States you may be required to file a FBAR with the Treasury Department. Here’s how you do that.
Find the highest account balance during the year convert the amount to U.S. dollars and if the total across all accounts is at least $10000 then the report will need to be filed. There isn’t a fee or a tax associated with filing the report but severe penalties can be imposed for not filing the FBAR on time.
Keep in mind that if you are required to file a FBAR you might need to report that information on Form 8938 with your yearly tax return. Form 8938 implements the requirement to disclose foreign accounts and foreign financial assets to the IRS on a tax return. This requirement is part of the larger Foreign Account Tax Compliance Act (FATCA). The filing information on the FBAR and the Form 8938 are similar but there is a difference in the monetary filing limits ($10000 for FBAR filings $50000 or more for Form 8938).
During this hectic filing season contact our Louisville CPA office to find out more information about these forms and how to meet the proper deadlines if you have money outside of the country.