Who Must File: The Basics

Any US citizen, green card holder, or resident alien with foreign accounts must check filing rules FBAR is required if total foreign account balances exceed $10,000 at any point during the year This covers bank accounts, brokerage accounts, mutual funds, and certain foreign pensions Even signing authority on a foreign account you don't own can trigger a filing requirement

FBAR & FATCA: Reporting Requirements for Foreign Accounts

FBAR vs FATCA: Key Differences

FBAR (FinCEN 114) goes to Treasury; FATCA (Form 8938) goes to the IRS with your tax return
FBAR threshold is $10,000 aggregate; FATCA starts at $50,000 (domestic) or $200,000 (expats)
You may need to file both in the same year — they serve different agencies with different rules
FBAR covers all foreign accounts; FATCA also includes assets like directly held foreign stock

Filing Thresholds and Deadlines

FBAR is due April 15 with an automatic extension to October 15 — no request needed
FATCA Form 8938 follows your tax return deadline, including any extensions
Single filers in the US: report if foreign assets exceed $50,000 year-end or $75,000 at any point
Joint filers get double the thresholds; expats get even higher ones — $400,000 at year-end

Penalties for Non-Compliance

Non-willful FBAR penalties can reach $10,000 per account per year — the IRS enforces aggressively
Willful violations can hit $100,000 or 50% of the account balance, whichever is greater
FATCA penalties start at $10,000, with up to $50,000 more for continued non-filing after IRS notice
Criminal prosecution is possible in extreme cases involving willful evasion or fraud

Common Situations That Trigger Filing

Inheriting a foreign account from a relative overseas — even temporarily holding funds triggers it
US expats with local bank accounts, retirement plans, or investments in their country of residence
Immigrants who kept home-country accounts after moving to the US, even dormant small-balance ones
Business owners with foreign subsidiaries, payroll accounts, or corporate accounts abroad

Streamlined Filing for Late Filers

The IRS Streamlined program lets non-willful late filers catch up with reduced penalties
Domestic filers pay a 5% penalty on the highest aggregate balance over six years
Qualifying expats may face zero penalties under the streamlined foreign offshore program
You must file three amended returns and six years of FBARs to complete the process

How Foreign Accounts Affect Investment Planning

Foreign mutual funds classified as PFICs face harsh US tax treatment under special rules
Holding investments in US-based accounts is generally simpler and more tax-efficient
Foreign pensions may not get the same tax deferral they receive in their home country under US law
A cross-border advisor can help restructure holdings to cut reporting burden and avoid tax traps

Who Must File: The Basics

FBAR vs FATCA: Key Differences

Filing Thresholds and Deadlines

Penalties for Non-Compliance

Common Situations That Trigger Filing

Streamlined Filing for Late Filers

How Foreign Accounts Affect Investment Planning

Related Topics

Expat Tax Optimization Strategies

Expatriate Tax Planning

529 Plan Tax Strategies

Who Must File: The Basics

FBAR vs FATCA: Key Differences

Filing Thresholds and Deadlines

Penalties for Non-Compliance

Common Situations That Trigger Filing

Streamlined Filing for Late Filers

How Foreign Accounts Affect Investment Planning

Related Topics

Expat Tax Optimization Strategies

Expatriate Tax Planning

529 Plan Tax Strategies