Foreign accounts

FBAR filing requirements

If you are a U.S. citizen, green card holder or other U.S. tax resident with bank accounts, deposits or other financial accounts abroad, you may have to report them to the Treasury every year on the FBAR, even if they earn nothing. The trigger is low: more than $10,000 across all your foreign accounts at any time during the year.

What the FBAR is

FBAR is short for Report of Foreign Bank and Financial Accounts, which is filed on FinCEN Form 114. It comes from the Bank Secrecy Act: every year, U.S. persons report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep records of them. Whether an account produced any taxable income makes no difference to whether it is reported.

It is not part of your tax return. The FBAR is filed electronically with the Treasury’s Financial Crimes Enforcement Network, FinCEN, through its BSA E-Filing System, and individuals can file there without registering for an account. FinCEN writes the rules and has delegated civil enforcement to the IRS, which is why you will see both names on it.

Who has to file

You file an FBAR for a calendar year if three things are true: you are a U.S. person; you had a financial interest in, or signature authority over, at least one financial account located outside the United States; and the combined value of your foreign accounts was more than $10,000 at any time during that year.

The $10,000 is not per account. FinCEN’s instructions have you find each account’s maximum value for the year, which is a reasonable approximation of its highest balance; periodic statements will do if they fairly reflect it. Convert each maximum to dollars at the Treasury exchange rate for the last day of the year and add them together. If the total is more than $10,000, you file and report every account, including the small ones.

A U.S. person is a citizen, a resident, or an entity such as a corporation, partnership, LLC, trust or estate formed under U.S. law. For individuals, resident means a resident alien under the same tests the income tax uses, and that is where most immigrants come in.

Green card holders: if you were a lawful permanent resident at any time during the calendar year, you are a resident under the green card test.
Work visa holders: on a visa such as an H-1B you become a resident by meeting the substantial presence test, which takes at least 31 days in the United States this year and 183 days over three years, counting all of this year’s days, a third of last year’s and a sixth of the year before’s. The IRS manual says a work visa holder who does not meet the test is not a U.S. resident for the FBAR.
Students: days spent as an exempt individual, which includes a student on an F, J, M or Q visa who substantially complies with it, do not count toward that test.
Treaties and joint-return elections do not change it: if you meet a residency test, a treaty provision that lets you file your income tax return as a nonresident does not change your FBAR residency, and a nonresident spouse who elects resident treatment to file jointly does not become a U.S. resident for the FBAR through that election, although it does bring them into Form 8938.
Children count: minor children are U.S. persons too, and if a child cannot file their own FBAR, a parent or guardian files it for them.
Companies file their own: a U.S. company that meets the test files its own FBAR, even an LLC that is disregarded for income tax. And if you own more than 50% of a company, its foreign accounts are accounts you have a financial interest in.

What counts as a foreign financial account

A financial account here is wider than a bank account. It covers savings, checking, deposit and time deposit accounts, securities and brokerage accounts, commodity futures and options accounts, insurance and annuity policies with a cash value, and shares in a mutual fund or similar pooled fund. It is foreign if it is physically located outside the United States: an account at an overseas branch of a U.S. bank counts, and an account at a U.S. branch of a foreign bank does not.

Fixed and term deposits are time deposits, and they count.
Real estate abroad that you own directly is not an account, and neither is foreign cash or gold you hold yourself, or jewelry, cars and other personal property.
Social security-type benefits paid by a foreign government are not reported.
Pensions need care. The FBAR exception for retirement plans covers U.S. plans under sections 401(a), 403(a) and 403(b) of the Internal Revenue Code, and IRAs. A pension or provident fund abroad is not on that list, so do not leave one off on the assumption that it is exempt.
Virtual currency: FinCEN’s current position, in Notice 2020-2, is that a foreign account holding only virtual currency is not reportable, unless it also holds other reportable assets. FinCEN has said it intends to propose changing that, so check its FBAR page before relying on it.

Joint accounts and signature authority

If an account is in more than one name, each U.S. person named on it has a financial interest in it, and each joint owner reports the entire value of the account, not a share. That holds when the other owner is a parent or sibling abroad who is not a U.S. person.

Married couples get one simplification. If every foreign account you have is owned jointly with your spouse, your spouse can report the joint accounts on one timely FBAR for both of you, provided you have both completed and signed FinCEN Form 114a. Whether you file your income tax return jointly or separately makes no difference to this. Otherwise each of you files, and each reports the full value of the joint accounts.

Signature authority means the power, alone or together with someone else, to control the disposition of assets in an account by direct communication with the bank. If your parents gave you authority over their account abroad, so the bank will act on your instructions, you have signature authority even though none of the money is yours, and the account goes on your FBAR and counts toward your $10,000.

When it is due, and who can file it

The FBAR covers a calendar year and is due April 15 of the following year. If you miss that date, FinCEN grants an automatic extension to October 15, and you do not have to ask for it. For 2025 accounts the date was April 15, 2026, and the extension runs to October 15, 2026; for 2026 accounts it is April 15, 2027. A due date that falls on a weekend or legal holiday moves to the next business day, and disaster relief can extend it further.

You can file it yourself or have a preparer file it for you. To authorize a preparer, you sign FinCEN Form 114a, Record of Authorization to Electronically File FBARs. It is not sent to FinCEN: you and the preparer each keep a copy for five years and produce it if FinCEN or the IRS asks. The form itself says the legal responsibility to file on time stays with you, not the preparer.

Keep records for each account you report for five years from the FBAR’s due date: the name on the account, the account number, the bank’s name and address, the type of account and its maximum value during the year. Bank statements or a copy of the filed FBAR can serve, if they hold that information.

FBAR vs Form 8938

Your tax return asks about foreign accounts too. Schedule B, Part III, line 7a asks whether at any time during the year you had a financial interest in or signature authority over a financial account in a foreign country, and the IRS says to check Yes even if you are not required to file the FBAR. Having such an account is itself a reason to file Schedule B, whatever your interest and dividends were.

Form 8938, Statement of Specified Foreign Financial Assets, is a separate requirement that comes from FATCA. It is attached to your Form 1040 and due with it, including extensions, and you do not file it for a year in which you do not have to file a tax return. It does not replace the FBAR: the IRS says filing Form 8938 does not relieve you of the FBAR, so if you meet both tests, you file both.

Who files: the FBAR covers U.S. persons, including citizens, resident aliens and U.S. entities. Form 8938 covers specified individuals, meaning citizens, resident aliens and certain nonresident aliens, and certain domestic entities.
Where it goes: the FBAR goes electronically to FinCEN through BSA E-Filing. Form 8938 goes to the IRS with your income tax return.
Thresholds if you live in the United States: the FBAR applies above $10,000 combined at any time in the year. Form 8938 applies if you are unmarried, or married filing separately, with more than $50,000 on the last day of the tax year or more than $75,000 at any time, and if you are married filing jointly with more than $100,000 on the last day or more than $150,000 at any time. The Form 8938 thresholds are higher for people living abroad.
What each covers: accounts you only have signature authority over, and accounts at a foreign branch of a U.S. bank, go on the FBAR but not Form 8938. Foreign stock held outside an account and foreign partnership interests go on Form 8938 but not the FBAR. Form 8938 also covers an interest in a foreign pension plan.
Penalties for Form 8938: $10,000 for failing to file, then $10,000 for each 30 days the failure continues more than 90 days after an IRS notice, up to $50,000 more, plus a 40% penalty on tax underpaid because of a transaction involving an undisclosed foreign asset. FBAR penalties are below.

Penalties, and what to do about missed years

For a violation that is not willful, the statute caps the FBAR penalty at $10,000, a figure adjusted for inflation each year; for penalties assessed on or after January 17, 2025, FinCEN’s published maximum is $16,536. In Bittner v. United States (2023) the Supreme Court held that this maximum applies per report, not per account, so one late FBAR listing several accounts is one violation. The law also bars a non-willful penalty where the violation was due to reasonable cause and the account’s balance was properly reported.

A willful violation is far more expensive: up to the greater of $165,353, as adjusted, or 50% of the balance in the account at the time of the violation. Willful violations may also be subject to criminal penalties.

If you missed FBARs in past years, what to do depends on what else was missed. The IRS no longer lists separate delinquent FBAR submission procedures among its options. Its page on undisclosed foreign financial assets names three routes: the IRS Criminal Investigation Voluntary Disclosure Practice, the Streamlined Filing Compliance Procedures and the delinquent international information return submission procedures. It encourages people to consult professional tax or legal advisors.

Only the FBARs were missed, and the income was reported and the tax paid: if the IRS has not contacted you about them and you are not under civil or criminal investigation, the IRS says to file the late FBARs as soon as possible to keep potential penalties to a minimum. File them through BSA E-Filing and pick the reason they are late from the list, or choose Other and explain.
Income from the accounts was also left off your returns, and the failure was not willful: the streamlined domestic offshore procedures, for U.S. residents, involve amended returns for the last three years, delinquent FBARs for the last six, and a miscellaneous offshore penalty of 5% of the highest year-end total of the affected assets. They require that you filed returns for those years in the first place, and they are not open to anyone already under IRS civil examination or criminal investigation.
The failure may have been willful: the IRS points people in that position to its Criminal Investigation Voluntary Disclosure Practice and says they should consult professional or legal advisers.

Foreign accounts and a return to prepare?

USTAXX prepares federal returns for clients with accounts abroad, including Schedule B and Form 8938 where they apply, and goes through the FBAR test with you. We work with clients remotely, through a secure portal, by phone or video, and in person in Naperville, IL.

Tax preparation service Book a consultation (847) 773-7070

Questions people ask

Is the $10,000 FBAR threshold per account?

No. It is the total across all your foreign accounts: FinCEN has you add each account’s maximum value for the year, converted to dollars, and if the total is more than $10,000 you report every account, including the small ones.

Do green card holders and H-1B workers have to file an FBAR?

Yes, once their foreign accounts cross the threshold. A green card holder is a U.S. resident for any year in which they hold that status, and a visa holder becomes one by meeting the substantial presence test. The IRS manual adds that a treaty position letting a resident file as a nonresident does not change FBAR residency.

I am only a signer on my parent’s account abroad. Do I report it?

Yes, if your foreign accounts together exceed $10,000. Signature authority alone makes an account reportable on the FBAR even when none of the money is yours, although it does not go on Form 8938 unless you also have an interest in the account.

Do I need to file both an FBAR and Form 8938?

If you meet both tests, yes. They are separate filings with different thresholds that go to different places, and the IRS says filing Form 8938 does not relieve you of the FBAR.

Is the FBAR filed with my tax return?

No. It is filed electronically with FinCEN through the BSA E-Filing System, due April 15 with an automatic extension to October 15. Your Form 1040 asks about foreign accounts on Schedule B, Part III, and may need Form 8938, but neither replaces the FBAR.

Where these rules come from

General information, current when written, not advice about your situation. Fees and forms change; the official pages above are the authority.