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Form 5471 - Foreign Corporations Form 8858 - Foreign Disregarded Entity Form 8865 – Foreign Partnership Form 8992 - GILTI (Global Intangible Low-Taxed Income)
Filing Requirements For U.S. Taxpayers Living Abroad FinCen Form 114 - Foreign Bank Account Reporting (FBAR) Foreign Pensions Form 1040-NR - Nonresident Alien Income Tax Return Form 1116 - Foreign Tax Credit
Foreign Earned Income Exclusion - Form 2555 Bona Fide Residence Test Physical Presence Test
Form 3520 - Foreign Gift Disclosure Form 8621 - PFIC (What Is A PFIC?) Form 8833 - Treaty-Based Return Position Disclosure Form 8938 - FATCA Reporting Form W-7 - ITIN Application (Certified Acceptance Agent) Totalization Agreements
Expat Tax Resolution Solutions Back Tax Returns Back Taxes Owed Bankruptcy Innocent Spouse Relief Installment Agreement IRS Collection Process IRS Tax Appeal – The Latest On What You Need To Know IRS Tax Lien Offer In Compromise Penalty Abatement Tax Audit
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Home » Tax Samaritan Blog » Expat Tax Solutions » Expatriate Tax » Foreign Bank Account Reporting (FBAR) » FBAR Filing Requirements – What You Need To Know

FBAR Filing Requirements – What You Need To Know

March 16, 2016
By Randall Brody
FBAR Filing Requirements

FBAR Disclosures Top 1 Million

Yesterday, the IRS announced that FBAR disclosures topped 1 million filings to a record of 1,163,229 FBARs, up more than 8 percent from the year prior. As awareness and compliance efforts increase, it is important that taxpayers in the US and overseas are aware of the FBAR filing requirements and the FinCen Form 114 (the “FBAR” form).

FBAR Filing Requirements

U.S. taxpayers with foreign accounts exceeding certain thresholds must file Form 114, Report of Foreign Bank and Financial Accounts, known as the “FBAR.” All FBARs must be filed electronically with the Treasury Department’s Financial Crimes Enforcement Network (FinCen) no later than June 30.

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account whose aggregate value exceeded $10,000 at any time during 2015, you meet the FBAR filing requirements. The Bank Secrecy Act requires you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).

Form 8938 Filing Requirements

Under FATCA, certain U.S. taxpayers holding specified foreign financial assets outside the United States must report those assets to the IRS, generally using Form 8938, Statement of Specified Foreign Financial Assets. This is filed as part of the individual tax return (i.e. Form 1040).

Reporting thresholds vary based on whether a taxpayer files a joint income tax return or lives abroad. The lowest reporting threshold for the Form 8938 is $50,000 in specified foreign financial assets. Higher asset thresholds apply to U.S. taxpayers who file a joint tax return or who reside abroad.

Failure to report foreign financial assets on Form 8938 may result in a penalty of $10,000 (and a penalty up to $50,000 for continued failure after IRS notification). Further, underpayments of tax attributable to non-disclosed foreign financial assets will be subject to an additional substantial understatement penalty of 40 percent.

Reporting Worldwide Income

If you are a U.S. citizen or resident alien, you must report income from all sources within and outside of the U.S, including income from foreign trusts and foreign bank and securities accounts. This is true whether or not you receive a Form W-2 Wage and Tax Statement, a Form 1099 (Information Return) or the foreign equivalents.

Not reporting income from foreign sources may be a crime. The IRS and its international partners (aka “other foreign countries”) are pursuing those who hide income or assets offshore to evade taxes.

Taxpayers that meet the FBAR filing requirements need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and requires U.S. citizens to report the country in which each account is located.

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If you would like a quote, please click on the button below for a free, no obligation Tax Preparation quote and/or free 30-minute consultation to discuss your situation regarding FBAR filing requirements further:

Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.

When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).

Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.

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