What is an FBAR and who must file?
Short answer
An FBAR is the Report of Foreign Bank and Financial Accounts, filed on FinCEN Form 114. It is a Treasury/Bank Secrecy Act reporting requirement for certain U.S. persons with foreign financial accounts; it is not filed with your federal income-tax return.Source 1Source 2
At a high level, a U.S. person generally has an FBAR filing obligation when the person has a financial interest in, or signature or other authority over, one or more financial accounts outside the United States and the aggregate value of the reportable foreign financial accounts exceeds $10,000 at any time during the calendar year.Source 1Source 2
What does “U.S. person” mean for FBAR purposes?
For FBAR purposes, the term includes U.S. citizens and U.S. residents. It also includes certain entities created, organized or formed under U.S. law, including corporations, partnerships and limited liability companies, as well as certain trusts and estates.Source 3 The federal income-tax treatment of an entity does not by itself determine whether that entity has an FBAR filing requirement.Source 3
The four questions that usually determine whether an FBAR is relevant
Are you a U.S. person for FBAR purposes?Source 3
Is the account located outside the United States?Source 2
All four concepts matter. The $10,000 test is an aggregate test; it is not a rule that only accounts individually worth more than $10,000 are reportable.Source 1Source 2 See how the $10,000 FBAR threshold works for the calculation.
What kinds of accounts can matter?
Foreign bank accounts are the most obvious example, but FBAR reporting can also extend to other foreign financial accounts. The IRS specifically gives examples including bank accounts, brokerage accounts and mutual funds.Source 2 Whether a particular pension, investment arrangement, custodial account or other financial product is reportable can depend on its legal and operational characteristics, so those topics belong in the dedicated reportable-accounts guidance rather than being reduced to a one-line rule here.
Does the account need to produce taxable income?
No. The IRS states that whether the foreign financial account produced taxable income does not determine whether the account is a foreign financial account for FBAR purposes.Source 2 FBAR reporting and federal income-tax reporting are related compliance topics, but they are not the same filing.
Where is the FBAR filed?
The FBAR is filed electronically through FinCEN's BSA E-Filing System. Individuals can use the individual filing process without registering for an institutional BSA E-Filing account.Source 4 The FBAR is not attached to Form 1040 or otherwise filed as part of the federal income-tax return.Source 2 The steps are in how to file an FBAR yourself.
Examples
Example 1
One foreign bank account
A U.S. citizen has one reportable foreign bank account and its value reaches $12,000 during the year. Assuming the other filing criteria are met, the aggregate threshold is exceeded.
Example 2
Several smaller accounts with maxima at different times
Account A reaches an annual maximum of $6,000 in January. Account B reaches an unrelated annual maximum of $6,000 in December. FinCEN's filing instructions aggregate the separately determined annual maxima, producing $12,000 for threshold purposes. Assuming the other filing criteria are met, the filer would file an FBAR.Source 1Source 2
Example 3
Account with no income
A reportable foreign bank account pays no interest during the year. The absence of taxable income does not by itself remove the account from FBAR consideration.Source 2
Related questions
Is an FBAR the same as a tax return?
Do I need to file if none of my foreign accounts individually exceeds $10,000?
Do foreign accounts have to earn income to be reportable?
No. Whether an account produced taxable income does not determine whether it is a foreign financial account for FBAR purposes.Source 2
Can employer accounts create an FBAR issue even if I do not own them?
Yes, potentially. FBAR rules can apply when a U.S. person has signature or other authority over a foreign financial account even without owning the account. Whether that authority exists depends on the facts, including whether the person can control the disposition of funds through communication with the financial institution.Source 1Source 2 See signature or other authority.
Can I file an FBAR myself?
Yes. Individuals can file electronically through FinCEN's BSA E-Filing system without using a paid preparer or institutional filing account.Source 4
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 filing criteria and FBAR guidance.
bsaefiling.fincen.govChecked Source updated Back to text
Source 2: IRS, Report of Foreign Bank and Financial Accounts (FBAR) (opens in a new tab)
Filing criteria, examples of accounts, income-tax-return distinction and filing mechanics.
irs.govChecked Back to text
Source 3: FinCEN, Who Is A United States Person? (opens in a new tab)
Definition of U.S. person for FBAR purposes.
fincen.govChecked Back to text
Source 4: FinCEN, How Do I File the FBAR? (opens in a new tab)
Electronic filing and individual filing method.
fincen.govChecked Back to text