How does the $10,000 FBAR threshold work?
Short answer
The FBAR threshold is an aggregate threshold, not a $10,000 exemption for each account. If the aggregate value of your reportable foreign financial accounts exceeds $10,000 during the calendar year, you generally have an FBAR filing requirement if the other filing conditions are met.Source 1Source 2
For practical preparation, FinCEN instructs filers to determine the annual maximum value of each reportable account separately, convert foreign-currency maxima to U.S. dollars using the applicable year-end Treasury rate, and aggregate those maximum account values.Source 2Source 3
Once the filing threshold is exceeded, reportable accounts below $10,000 are not excluded simply because each individual account stayed below $10,000.Source 1Source 2
It is not a per-account $10,000 rule
A common misunderstanding is to ask whether any single foreign account exceeded $10,000. That is not the FBAR test. The threshold is applied across the filer’s reportable foreign financial accounts.Source 1Source 2
| Account | Annual maximum | Individually over $10,000? |
|---|---|---|
| Account A | $6,000 | No |
| Account B | $5,000 | No |
| Aggregate maximum values | $11,000 | Threshold exceeded |
Assuming both accounts are otherwise reportable and the filer meets the other FBAR requirements, the filing threshold is exceeded even though neither account individually reached $10,000.Source 1Source 2 If you are not yet sure whether the filing rules apply to you, start with what an FBAR is and who must file.
Do the accounts have to peak at the same time?
FinCEN’s maximum-value instructions tell filers to determine the maximum value of each account during the calendar year and then use the aggregate of those maximum account values for the filing test.Source 2 This means the operational filing method does not require each account’s maximum to occur on the same date.
Example
Different annual peaks
Account A reaches a maximum of $6,000 in January. An unrelated Account B reaches a maximum of $6,000 in December. Under FinCEN’s maximum-value method, the aggregate maximum account values are $12,000, so the threshold is exceeded if the other FBAR criteria are met.Source 2Source 3
- Account AMaximum in January
- $6,000
- Account BMaximum in December
- $6,000
- Aggregate maximum account values
- $12,000
What if the same money is transferred between foreign accounts?
Transfers
Do not blindly double-count the same funds merely because they appear as the annual maximum in two foreign accounts at different times. IRS examination guidance states that when money is moved from one foreign account to another foreign account during the year, it should be counted only once when determining aggregate maximum value.Source 3
Example
Transfer between accounts
Account A contains $6,000 and the same $6,000 is later transferred to Account B. If those balances represent the same funds rather than two economically separate $6,000 amounts, the transfer should not automatically turn $6,000 into $12,000 for the threshold calculation.Source 3
If you cross the threshold, which accounts are reported?
If an FBAR is required, the filing generally reports each reportable foreign financial account for that filer, including reportable accounts whose own maximum value was below $10,000.Source 1Source 2 The separate question is whether a particular account is itself a reportable foreign financial account.
Foreign-currency accounts
For threshold and reporting purposes, determine the maximum value in the account’s own currency and convert that maximum using the Treasury Reporting Rate for the last day of the calendar year being reported. If Treasury does not provide a rate for that currency, FinCEN permits another verifiable exchange rate with its source identified.Source 2
See the dedicated Maximum account value and exchange rates guide for the calculation method and evidence rules.
Related questions
Does each foreign account get its own $10,000 allowance?
If all my accounts are below $10,000 individually, can I still have to file?
Do my accounts have to exceed $10,000 on the same day?
Does moving the same money between two foreign accounts count twice?
IRS examination guidance says the same money moved from one foreign account to another during the year should be counted only once when determining aggregate maximum value.Source 3
What if I am not sure an account is reportable?
Determine account reportability first. The threshold calculation should include reportable foreign financial accounts for the filer; unusual pensions, employer accounts, trusts and authority-only arrangements may need more specific guidance.
Next pages
Sources
Official sources used for this page.
Source 1: FinCEN, FinCEN Report of Foreign Bank and Financial Accounts (FBAR) Electronic Filing Requirements (opens in a new tab)
Core aggregate-threshold rule.
bsaefiling.fincen.govChecked Source updated Back to text
Source 2: FinCEN, Reporting Maximum Account Value (opens in a new tab)
Separate annual account maxima, aggregation, FX and reporting mechanics.
fincen.govChecked Back to text
Source 3: IRS, IRM 4.26.16 — Report of Foreign Bank and Financial Accounts (opens in a new tab)
Account valuation, aggregation and transfer treatment.
irs.govChecked Source updated Back to text