Report of Foreign Bank and Financial Accounts (FBAR): US Expat Taxation
An FBAR needs to be filed if you are an expat having a foreign account holding more than $10,000. It is a mandatory filing.
You need to file FBAR if you are a US citizen or resident alien and if:
- You have a bank account holding $10000 dollars or more of money or assets in a foreign country.
- Even a single day in the whole taxation year the account had a value of more than $10000
- You have the controlling signature for making deposits to that account.
- If there are more than one financial deposit accounts and the sum of assets in all accounts is more than $10000
The FBAR must be filed before or on the 30th of June of every year. In case of expats the deadline for filing income tax returns gets extended. However, this extension does not apply to FBAR filing. The FBAR needs to be filed within the deadline and failure to do so leads to penalty. If the IRS proves you guilty of willingly not fling FBAR then the fine levied is $100,000 or half of the value of your money account, whichever is more. In case of accidental non-filing the penalty is $10,000 per violation if the reason is not justified. There is absolutely no clause for requesting and extension for filing FBAR.
In case you have not declared your foreign account and have not received any complaint from the IRS then you can still file FRAR along with an explanation of late filing. You will not be subjected to legal action or penalty if you do so.
Record of Authorization to Electronically File FBARs:
In case you do not want to file FBAR on your own and want to do so via a third party or in case you are filing your FBAR jointly with your spouse then you can do so by downloading and signing the FinCEN114a form. This report is a proof of transferring authority for filing the FBAR to the relevant individual. You do not have to submit the FinCEN114a form along with FBAR filing. You and the filer need to keep it with yourself and produce it in case demanded by IRS during cases of conflict.