The FBAR (Foreign Bank Account Report), officially known as FinCEN Form 114, is a mandatory annual filing for U.S. persons who hold foreign financial accounts. One of the most misunderstood aspects of this requirement is the $10,000 threshold—especially the rule that applies to the aggregate value of all foreign accounts. This guide explains who must file and how to determine whether you meet the threshold, even if no single account exceeds $10,000.
📌 What Is the FBAR?
The FBAR is a report filed with the U.S. Department of the Treasury—not the IRS. It is used to disclose foreign financial accounts to the Financial Crimes Enforcement Network (FinCEN) and is part of anti-money laundering compliance efforts under the Bank Secrecy Act (BSA).
👥 Who Must File FBAR?
You must file FBAR if all of the following conditions apply:
- You are a U.S. person (includes citizens, residents, green card holders, and certain domestic entities)
- You had a financial interest in or signature authority over one or more foreign financial accounts
- The aggregate value of all foreign accounts exceeded $10,000 at any point during the calendar year
💰 Understanding the $10,000 Aggregate Threshold
The $10,000 threshold is not based on individual accounts—it refers to the combined highest value of all foreign financial accounts at any time during the year.
Example:
- Account A: Max balance = $4,000
- Account B: Max balance = $3,500
- Account C: Max balance = $3,000
Aggregate value = $10,500 ⇒ FBAR filing required
Even though no single account exceeded $10,000, the total exceeded the threshold. You must report all three accounts.
🏦 What Types of Accounts Must Be Reported?
You must report any foreign financial account, including but not limited to:
- Bank accounts (savings, checking, CDs)
- Securities and brokerage accounts
- Mutual funds and pooled investment funds
- Foreign retirement accounts (depending on structure)
- Accounts held in foreign branches of U.S. banks
- Online accounts with offshore financial institutions
🔑 What Is “Signature Authority”?
You may have to file FBAR even if the account is not yours, but you have signature authority—meaning you can control the account via direct communication with the bank (e.g., a corporate employee or trustee).
👥 Joint Accounts and Spouses
- Married couples can file a joint FBAR if all reportable accounts are jointly held
- If either spouse owns individual accounts, each must file separately
- Children are also subject to FBAR rules; parents may file on their behalf
🌐 Currency Conversion
To calculate the value of your foreign accounts, you must convert the highest balance to U.S. dollars using the Treasury’s year-end exchange rate.
Access official rates at: Treasury Reporting Rates of Exchange
🗓️ When Is the FBAR Due?
- Deadline: April 15, 2025
- Automatic extension: Through October 15, 2025 (no form needed)
- Where to file: Submit electronically through the BSA E-Filing System
🚫 What Happens If You Don’t File?
Penalties for noncompliance can be severe:
- Non-willful violation: Up to $10,000 per violation
- Willful violation: Greater of $100,000 or 50% of the account balance per year
- Criminal penalties may apply in serious cases
✅ Summary
If you’re a U.S. person with foreign accounts totaling more than $10,000 combined at any time in 2025, you must file FBAR using FinCEN Form 114. The aggregate rule means even smaller accounts count toward the threshold. To stay compliant, calculate your account values correctly, report all qualifying accounts, and file by the April deadline (or use the automatic extension). If you’re unsure, it’s best to consult a tax professional experienced in international reporting.
