The FBAR (aka FinCEN Form 114) is a form that US citizens who hold “monetary” assets outside the US must submit each year. This form doesn’t go to the IRS, but to the Department of the Treasury. The deadline is April 15, though an extension is granted to everyone until October 15, without exception, essentially making that the due date.
There are no tax consequences to filing this form. Uncle Sam just feels more comfortable knowing how well its citizens are doing. 🙂 No seriously, these files would likely just be used in an investigation into fraud or money laundering.
There ARE stiff penalties for not filing… and avoiding these penalties is the primary reason for using the amnesty program (Streamlined Foreign Offshore Procedure).
How do you know if you have to file? Unfortunately, answering this question can take almost as much work as filling out the form!
You can skip this process and just know you have to file, if at any time of the year, your bank account balances and investments together totaled US$10,000 or more. (Use the right conversion rate).
Otherwise, here’s how you find out if you have to file.
For each account, investment, pension plan, whole life insurance policy, etc., find the maximum value reached at any time during the year. Add up all these maximums, and convert the sum to US dollars (see FBAR instructions). If the total is $10,000 or more, you have to file the FBAR.
Not to be outdone by the Treasury Department, the IRS has another similar form, with a higher threshold, that goes directly to the IRS with your tax return. This is form 8938.
If you live outside the United States, you have to file form 8938 if the above sum above is $300,000 or more, or if the sum of all the YEAR END values is $200,000 or more. (If you live inside the United States, the thresholds are quite a bit less). Otherwise, the FBAR is all you need.
Note: If you have delinquent FBAR’s or 8938’s, DO NOT file these without finding out how to avoid the late filing penalties!