If you’re a U.S. person with foreign financial accounts, understanding FBAR filing requirements is crucial to staying compliant and avoiding steep penalties. This guide explains what the FBAR is, who must file it, how to file correctly, and what happens if you don’t.
If you’re unsure about your filing obligations or need help navigating the process, professional tax assistance can ensure everything is handled accurately and on time.
Key Insights
U.S. persons must file FBAR if the total value of foreign accounts exceeded $10,000 at any point during the year
FBAR must be submitted electronically to FinCEN, not with your tax return
Includes a range of accounts: bank accounts, retirement accounts, crypto wallets, and more
Missed filings can result in major penalties or jail time, but catch-up options are available
What Is the FBAR?
The FBAR (Foreign Bank Account Report), officially known as FinCEN Form 114, is a mandatory annual filing for U.S. persons who have a financial interest in or signature authority over foreign financial accounts. It was introduced under the Bank Secrecy Act to track offshore assets and deter tax evasion. Unlike your regular tax return, the FBAR must be filed electronically with the Financial Crimes Enforcement Network (FinCEN).
You’re required to file if the total value of your foreign accounts exceeded $10,000 at any point during the calendar year-even for just one day. This report applies regardless of whether the accounts generated income or remained dormant. If the combined maximum value of your qualifying accounts crossed the threshold, you must file.
Who Must File the FBAR?
You must file the FBAR if:
- You are a U.S. person, including citizens, green card holders, residents, corporations, partnerships, LLCs, trusts, and estates
- You have a financial interest in or signature authority over one or more foreign accounts
- The total value of all foreign accounts exceeded $10,000 at any point during the calendar year
Common Types of Reportable Foreign Accounts
These accounts typically trigger the FBAR filing requirement:
- Foreign bank accounts (checking, savings)
- Brokerage or securities accounts overseas
- Mutual funds and foreign retirement plans
- Life insurance policies with a cash value
- Foreign-held digital wallets and crypto accounts
Even if you don’t personally own the account but can direct transactions or access funds, you may be required to report it.
Accounts That Are Typically Exempt
You are generally not required to report:
- Correspondent or Nostro accounts
- Accounts at U.S. military banking facilities overseas
- IRAs and qualified retirement plans you own or benefit from
- Accounts held by U.S. government or international organizations
- Foreign accounts jointly owned with a spouse, if your spouse files and you submit Form 114a
If you’re unsure whether your account is exempt, review FinCEN and IRS guidelines or consult a tax professional.
How to File an FBAR: Step-by-Step Guide
Filing your FBAR involves more than just filling out a form. Accuracy and recordkeeping are critical. Here’s how to do it right: This checklist provides a step-by-step guide to help you properly file your FBAR.
Follow each step carefully to ensure you meet all the necessary requirements and deadlines. If you need any help, please reach out to our tax attorneys.
| Step | Task | Complete |
|---|---|---|
| 1 | Gather all financial documents and account statements from your foreign accounts. | |
| 2 | Identify every foreign account where you have a financial interest or signature authority. | |
| 3 | Verify that the combined balance of these accounts exceeds $10,000 at any time during the year. | |
| 4 | Collect the dates and highest balance figures for each account. | |
| 5 | Convert foreign currency balances into U.S. dollars using the official exchange rate. | |
| 6 | Complete FinCEN Form 114 with all required account details. | |
| 7 | Review all information for accuracy and consistency before filing. | |
| 8 | File the FBAR electronically via the FinCEN BSA E-Filing System. | |
| 9 | Keep copies of the filed FBAR and all supporting documentation. | |
| 10 | Mark the filing deadline on your calendar and follow up on any required corrections. |
Important Reminder: Always double-check your data for accuracy and keep detailed records of all your foreign accounts and transactions. Filing your FBAR on time is crucial to avoid hefty penalties, so make sure you understand each step of the process and reach out for professional advice if needed.
Do Digital and Crypto Accounts Count?
Yes. Non-traditional accounts held abroad are still subject to FBAR if they meet the filing threshold.
Examples include:
- PayPal or Apple Pay accounts connected to foreign banks
- Crypto wallets or exchanges located outside the U.S.
If the maximum value of these accounts exceeds $10,000 at any time during the year, they must be reported.
To determine your filing obligation, ask yourself:
- Is the account held outside the U.S.?
- Do I have ownership or control over the funds?
- Did the value ever exceed $10,000?
If the answer is yes to all three, you’re likely required to file.
Penalties for Not Filing the FBAR
Failing to file an FBAR can result in steep consequences:
- Non-willful violations: Up to $10,000 per unreported account
- Willful violations: The greater of $100,000 or 50% of the account value
- Criminal penalties: May include prosecution, especially in cases of fraud
Each year you fail to file counts separately. Even unintentional errors can result in substantial fines. If you’re behind, the IRS offers programs like Streamlined Filing Compliance Procedures to catch up with reduced penalties.
FBAR vs. FATCA: What’s the Difference?
Although they overlap, FBAR and FATCA (Form 8938) serve different purposes. You may need to file both.
| Feature | FBAR | FATCA (Form 8938) |
|---|---|---|
| Governing Agency | FinCEN | IRS |
| Filed With | BSA E-Filing System | With tax return |
| Trigger Threshold | $10,000 total in foreign accounts | $50,000+ for U.S. residents; $200,000+ for expatriates |
| Covered Assets | Financial accounts | Financial and non-account assets |
FATCA has broader asset requirements and is part of your tax return. FBAR is a separate filing with FinCEN.
Best Practices to Stay Compliant
To simplify FBAR compliance:
Keep detailed records of all foreign accounts throughout the year
Document account balances and relevant transactions
Use official exchange rates for all conversions
Set annual reminders for the April 15 filing deadline
Consult a tax professional for unusual or complex cases
By following these practices, you reduce your risk of penalties and ensure you remain compliant year after year.
File With Confidence and Avoid Costly Mistakes
FBAR filing doesn’t have to be overwhelming. With the right help, you can report your accounts accurately, meet every deadline, and avoid unnecessary penalties.
Our experienced tax attorneys:
Clarify your FBAR requirements
Prepare and file FinCEN Form 114
Provide guidance on digital and crypto accounts
Help with past-due filings through IRS compliance programs
Whether you’re filing for the first time or catching up on missed reports, we make it easy to stay compliant.
Contact us today for a free consultation and protect your foreign financial interests with confidence.
FBAR Filing FAQs
What is the FBAR?
The FBAR, or FinCEN Form 114, is an annual report that U.S. persons must file if they have foreign financial accounts totaling over $10,000 at any point in the calendar year. It helps the government track offshore holdings to deter tax evasion.
How do I file the FBAR?
To file, complete FinCEN Form 114 and submit it electronically using the BSA E-Filing System. You’ll need to report account details, including the maximum balances during the year, and retain supporting records for at least five years.
Who needs to file the FBAR?
Any U.S. person, including individuals, trusts, and entities, with a financial interest in or authority over foreign accounts must file if the total value exceeds $10,000 at any time during the year. This includes digital wallets and crypto accounts held abroad.
When is the FBAR due?
The FBAR is due April 15 each year. If you miss that deadline, there is an automatic extension until October 15, so no formal request is needed for extra time.
What happens if I miss the FBAR filing deadline?
Missing the FBAR deadline can lead to severe penalties. Non-willful violations may result in fines up to $10,000 per account, while willful violations can incur penalties of $100,000 or 50 percent of the account’s value. Delinquent filers may qualify for IRS compliance programs to minimize penalties.
