In today’s globalized economy, it’s common for U.S. citizens, residents, and businesses to maintain financial accounts outside the United States. However, with foreign accounts comes a strict set of disclosure requirements. One of the most important—and often misunderstood—is the Foreign Bank Account Report (FBAR), officially known as FinCEN Form 114. Failing to file an FBAR when required can result in substantial penalties. This detailed guide explains who must file FBAR, what it covers, key thresholds, deadlines, and how to stay compliant.
What Is the FBAR (FinCEN Form 114)?
The FBAR is a mandatory report that must be filed with the Financial Crimes Enforcement Network (FinCEN)—a bureau of the U.S. Treasury Department—not the IRS. It is used to report a financial interest in or signature authority over foreign financial accounts that exceed certain thresholds.
While the form is not filed with your tax return, it is closely monitored by the IRS and tied to anti-money laundering and tax enforcement laws.
Who Must File the FBAR?
According to the FinCEN and IRS guidelines, you must file an FBAR if:
- You are a U.S. person (citizen, resident, or entity such as a corporation, partnership, or LLC), and
- You have a financial interest in or signature authority over at least one foreign financial account, and
- The aggregate value of all your foreign accounts exceeded $10,000 at any time during the calendar year.
Who Is Considered a U.S. Person?
The term “U.S. person” includes a wide range of individuals and entities:
- U.S. citizens living in the U.S. or abroad
- U.S. residents (including green card holders)
- Domestic partnerships and corporations
- Limited liability companies (LLCs) organized under U.S. law
- Trusts or estates formed under U.S. jurisdiction
Even if you live abroad or consider yourself a dual citizen, if you meet the above criteria, FBAR filing requirements apply to you.
What Counts as a Foreign Financial Account?
Not all foreign assets are reportable under FBAR, but many are. Reportable accounts include:
- Bank accounts (savings, checking, deposit accounts held abroad)
- Securities accounts (stock brokerage accounts located outside the U.S.)
- Mutual funds or pooled investment funds available exclusively outside the U.S.
- Foreign retirement or pension accounts (in many cases)
- Foreign insurance or annuity accounts with cash value
- Accounts where you have signature authority but no financial interest
Note: Cryptocurrency accounts are not currently required on the FBAR (as of 2025), but this may change in the future. However, foreign exchanges that hold U.S. dollar equivalents may still trigger reporting obligations.
What Is the $10,000 Threshold?
The $10,000 threshold applies to the aggregate value of all your foreign financial accounts. That means you must file an FBAR if the combined balance of all your foreign accounts—at any point during the calendar year—exceeds $10,000, even for just one day.
For example:
- Account A in Canada: $4,000
- Account B in Germany: $5,500
- Total: $9,500 → No FBAR filing required
- If Account A rises to $6,000 → Total is now $11,500 → FBAR is required
Joint Accounts and Signature Authority
Joint Accounts:
If you jointly own a foreign account with your spouse or another individual, each co-owner may have to file their own FBAR, unless a filing exemption applies (e.g., spouses filing jointly with signed authorization).
Signature Authority Only:
Even if you don’t own the account but have authority to control its funds (such as signing checks or transferring money), you may be required to report it. This is common among corporate employees, board members, and financial managers.
How to File the FBAR
The FBAR is not filed with your IRS Form 1040. It must be submitted electronically through FinCEN’s BSA E-Filing System:
- Access the BSA E-Filing System
- Complete FinCEN Form 114 online or via upload
- No paper filings are accepted
It is important to complete the form accurately, including details like:
- Name and address of the financial institution
- Maximum account value during the year
- Account number(s)
- Account type
- Whether the account is jointly held or includes signature authority
FBAR Filing Deadline
The deadline to file the FBAR is April 15 following the calendar year being reported. However, FinCEN grants an automatic extension to October 15—no separate extension form is needed.
For example, for the 2024 calendar year, the FBAR is due April 15, 2025, with automatic extension to October 15, 2025.
What Happens If You Don’t File?
The penalties for failing to file an FBAR can be severe and vary based on whether the violation is deemed willful or non-willful.
Non-Willful Violation:
- Penalty of up to $10,000 per account per year
- May be waived if reasonable cause can be demonstrated
Willful Violation:
- Penalty up to the greater of $100,000 or 50% of the account balance per year
- Criminal charges possible—up to 5 years in prison and additional fines
The IRS is increasingly aggressive in FBAR enforcement, especially when linked to tax evasion or offshore concealment.
FBAR vs. FATCA (Form 8938)
Taxpayers often confuse FBAR with FATCA reporting (IRS Form 8938). While both involve foreign financial accounts, they have different thresholds, forms, and governing laws:
| FBAR (FinCEN Form 114) | FATCA (Form 8938) |
|---|---|
| Filed with FinCEN | Filed with IRS |
| Threshold: $10,000 aggregate | Threshold: $50,000+ (single), $100,000+ (married) |
| Includes signature authority accounts | Only financial interest required |
| Filed separately from tax return | Filed as part of Form 1040 |
Some individuals must file both forms. Ensure you assess your situation carefully.
Tips for Staying Compliant
- Track all your foreign account balances throughout the year
- Use currency exchange rates published by the U.S. Treasury for reporting
- Maintain detailed records (bank statements, account opening forms, etc.)
- Consult a tax professional if you have any doubt about your filing requirement
- Amend prior year FBARs if you discover past noncompliance
Conclusion: Know Your FBAR Obligations
If you are a U.S. person with foreign financial accounts that collectively exceed $10,000, you likely have an FBAR filing obligation. FinCEN Form 114 plays a vital role in international tax compliance, anti-money laundering, and financial transparency. Failing to comply can result in steep financial penalties and legal exposure. If you have foreign accounts, act early, stay organized, and when in doubt, seek professional guidance to remain compliant with your FBAR responsibilities.
