Filing the Report of Foreign Bank and Financial Accounts, better known as an FBAR, means you will be submitting FinCEN Form 114 electronically to the U.S. Treasury. This is not part of your regular income tax return. It is a completely separate filing handled through the BSA E-Filing System.
The trigger is when the combined value of your foreign financial accounts tops $10,000 at any single point during the calendar year.
Do You Need to File an FBAR This Year?#
Before digging into the "how," let's make sure you actually need to file. Many expats and U.S. residents with overseas ties get caught off guard by this rule. It is important to remember the FBAR is not about taxing your account balances. It is a transparency tool the U.S. government uses to track foreign assets and combat financial crime.
The filing requirement kicks in for any “U.S. person,” which is a much broader category than most people realize. It covers:
U.S. citizens, no matter where they live in the world.
Resident aliens (this includes Green Card holders and anyone meeting the substantial presence test).
* U.S. entities like corporations, partnerships, and trusts.
What Is the $10,000 Aggregate Threshold?#
The key detail here is the **$10,000 aggregate value**. This means you need to add up the highest balance each of your foreign accounts reached during the year.
Even if no single account ever held $10,000, you still have a filing duty if their combined peak values broke that threshold, even for just one day.
Think about a U.S. citizen living in Canada. They might have:
* A local checking account that maxed out at $4,000.
* A savings account that peaked at $5,000.
* A small investment account worth $2,000 at its highest point.
No single account hit the magic number. But when you add them up ($4,000 + $5,000 + $2,000), the total comes to $11,000. That single fact triggers the requirement to file an FBAR.
To help you figure this out quickly, here is a simple checklist.
How Can a Checklist Help Determine My Filing Need?#
| Question | Yes | No |
|---|---|---|
| Are you a U.S. person (citizen, resident alien, etc.)? | ☐ | ☐ |
| Did you have a financial interest in or signature authority over at least one foreign financial account during the year? | ☐ | ☐ |
| Did the total maximum value of all your foreign accounts exceed $10,000 at any point? | ☐ | ☐ |
If you checked "Yes" for all three questions, you have an FBAR filing requirement. If you're still unsure, getting guidance on your specific situation from a tax professional who specializes in FBAR compliance is a smart next step.
How Do You Gather Your Financial Documents for Filing?#
Getting your paperwork in order before you start the FBAR e-filing process is the single best thing you can do to make it go smoothly. It saves a ton of time and helps you avoid frustrating errors. Trying to hunt down details mid-form is a recipe for disaster.
For every single foreign financial account you hold, you will need a few specific pieces of information. This includes the full, official name of the bank or institution and its complete mailing address. You will also need the account number and the type of account it is, for instance, checking, savings, or brokerage. If you have multiple accounts in different countries, staying organized is non-negotiable.
What Information Do You Need for Each Account?#
Your annual or monthly bank statements are your best friend here. They are the source of truth. The most critical piece of information you need to pull from them is the maximum account value the account reached at any point during the calendar year.
You have to find the absolute highest balance the account held, even if it was just for a single day. This catches a lot of people out.
For accounts held in a foreign currency, you will then need to convert that peak value into U.S. dollars. The government requires you to use the Treasury Department's official year-end exchange rate for the reporting year in question. A huge part of FBAR prep is tracking these balances, and it is essential to know how to effectively convert bank statements to Excel. This can make the calculations much, much simpler.
Pro Tip: I always recommend clients create a simple spreadsheet. Make columns for the bank's name, account number, the maximum value in the foreign currency, the exchange rate you used, and the final USD value. This is not just for filing; it becomes an invaluable record for your own files.
For non-residents filing US tax documents, having the right identification number is also a big deal. If you're unsure about this, our guide explains what is an ITIN number and how it fits into the U.S. tax system.
How Do You Navigate the FinCEN BSA E-Filing System?#
Alright, with your documents organized, you're ready to file. The whole FBAR process happens online through the Financial Crimes Enforcement Network's (FinCEN) BSA E-Filing System. One common point of confusion is that this is a completely separate government portal. It has nothing to do with the normal IRS website you use for your income taxes.
When you land on the homepage, you will kick off the process to prepare your FBAR. The system will then prompt you to choose the right report, which is FinCEN Form 114, Report of Foreign Bank and Financial Accounts. The online form is broken down into clear sections, starting with your personal details as the filer.
How Should You Enter Filer and Account Information?#
First up, the form needs your basic identifying info: name, address, and an ID number. If you're a U.S. citizen or resident, you will enter your Social Security Number (SSN). For non-U.S. individuals who do not have an SSN, this is where you will use your Individual Taxpayer Identification Number (ITIN).
After you have filled out the filer section, you will get to Part II, which is where you list the specifics for each foreign account. You have to create a separate entry for every single account, providing the bank's name, address, account number, and the highest value it reached during the year in U.S. dollars. This is exactly where having that organized spreadsheet saves you a ton of time and potential headaches.
This visual shows the simple but crucial workflow for getting your account data ready before you even log in.
Following this little process ensures all your information is accurate and easy to find, which really helps minimize errors when you are entering everything.
How Do You Finalize and Submit Your FBAR?#
Once all your accounts are entered, the last step is to sign and submit the report. You will do this electronically by checking a box, which acts as your legal signature confirming that everything you have entered is true and correct.
As soon as you submit, you will get a confirmation page and an email.
It is absolutely critical that you save a final copy of your submitted FBAR and the confirmation receipt for your records. This confirmation contains a unique BSA Identifier, which is your proof of filing and is necessary if you ever need to amend your report.
What Are the FBAR Deadlines and Penalties?#
When it comes to filing your FBAR, timing is everything. Get the deadline wrong, and you could be facing some seriously steep penalties.
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The official due date for FinCEN Form 114 syncs up with the federal income tax deadline, which is typically April 15.
But here is a crucial bit of good news: there is an automatic extension to October 15. You do not have to file a separate form to get this extra time. It is granted to everyone. Just make sure you do not miss that final October date.
What Happens if You Do Not File an FBAR?#
Missing the deadline is not like being a little late on a credit card bill. The penalties for FBAR non-compliance are severe, and they are split into two categories: non-willful and willful violations.
- A non-willful violation, such as an honest mistake or just not knowing you had to file, can still cost you. The penalty can be over $10,000 for each violation. That is a painful price for an oversight.
- A willful failure to file is a whole different ballgame. This is when the government believes you knew about the requirement and deliberately chose not to comply. The civil penalties here are staggering: the greater of $100,000 or 50% of the account balance at the time of the violation. And in the most serious cases, it can even lead to criminal charges.
It is no surprise, then, that the government's increased focus on foreign accounts has led to a massive jump in filings. Back in 2001, there were only about 131,000 FBARs filed. By 2020, that number had skyrocketed to over 1.4 million. You can see the trend for yourself by reviewing the official FBAR filing data by year.
What Is the Difference Between FBAR and Form 8938?#
It is one of the most common points of confusion I see with clients: the FBAR and Form 8938. They sound similar, they both involve foreign assets, but they are completely separate filings. Filing one does not mean you have taken care of the other.
The biggest distinction comes down to who you are reporting to. The FBAR (FinCEN Form 114) goes to the Financial Crimes Enforcement Network, or FinCEN. This is an arm of the Treasury Department focused on financial crimes. On the other hand, Form 8938 is an IRS form, filed right along with your annual income tax return.
Their reporting thresholds are worlds apart, too. The FBAR kicks in once the total value of all your foreign accounts hits just $10,000 at any point during the year. It is a surprisingly low bar that catches a lot of people off guard.
Form 8938 has much higher thresholds that start at $50,000 and go up depending on your filing status and whether you live in the U.S. or abroad. To get a complete picture, it is worth reading up on the various foreign asset reporting requirements, including FBAR and FATCA.
For non-resident filers, these details are critical. For instance, the very income that might push you over the Form 8938 threshold could be what you are reporting on a Form 1040-NR, directly linking these two obligations.
How Do FBAR and Form 8938 Compare at a Glance?#
To make it even clearer, I've broken down the main differences in this table. Think of it as your cheat sheet for keeping these two forms straight.
| Feature | FBAR (FinCEN Form 114) | Form 8938 (Statement of Specified Foreign Financial Assets) |
|---|---|---|
| Filed With | FinCEN (electronically via BSA E-Filing System) | IRS (attached to your annual income tax return) |
| Primary Purpose | To combat money laundering and tax evasion. | To ensure U.S. taxpayers report foreign assets for tax purposes. |
| Reporting Threshold | $10,000 (aggregate value of all accounts) | Starts at $50,000 (varies by filing status & residency) |
| What to Report | Foreign financial accounts (bank, brokerage, mutual funds). | A broader range of assets, including financial accounts, stocks, and business interests. |
| Deadline | April 15 (with an automatic extension to October 15) | Your income tax return deadline, including extensions. |
At the end of the day, you might need to file one, both, or neither. The key is knowing the specific rules for each form so nothing slips through the cracks.
What Are the Answers to Common FBAR Filing Questions?#
Even with the basics down, real-world questions always pop up when you sit down to file your FBAR. Let's tackle a few of the most common scenarios people run into.
What If I Find a Mistake on a Past FBAR?#
It happens. If you spot an error on a previously filed FBAR, the right move is to file an amended report.
You will do this through the same BSA E-Filing System you used for the original. Just be sure to check the "Amended" box and have your Prior Report BSA Identifier handy. You will find this number on the confirmation receipt from your first submission. Proactively correcting mistakes shows good faith and keeps you compliant.
Do I Report Cryptocurrency on the FBAR?#
This is the million-dollar question, and the answer is still a bit murky. FinCEN has made it clear they intend to require reporting for virtual currencies held in foreign accounts, but the final rules are still in the works.
Because this area is actively changing, it is absolutely essential to check the latest FinCEN instructions every single year before you file. Do not assume last year's rules still apply.
What About Jointly Owned Accounts?#
This one is simple but trips a lot of people up. If you own an account jointly with your spouse, you can file a single, joint FBAR to cover you both. Easy enough.
However, if that joint owner is anyone but your spouse, for example, a business partner, a parent, or a friend, you must each file a separate FBAR. And on your individual FBAR, you have to report the entire maximum value of that joint account, not just your share.
Navigating U.S. financial rules can be a maze, especially for non-residents. Getting a handle on these reporting duties is often the next step after establishing a financial presence. For anyone just starting out, learning how to open a US bank account for non-residents is a great first step.