Form 1040-NR

Per the Bank Secrecy Act, every year you must report certain foreign financial accounts, such as bank accounts, brokerage accounts, and mutual funds, to the Treasury Department and keep certain records of those accounts. You report the accounts by filing a Report of FBAR on the Financial Crimes Enforcement Network (FinCEN) using Form 114.

FBAR reporting can also include more obscure types of accounts such as cash surrender of whole life insurance policies, non-US PayPal/Venmo accounts, and non-US cryptocurrency accounts.  So be aware of the types of accounts you have ownership in and if a possible foreign reporting requirement is there.

Anyone Could Have an FBAR Filing Requirement 

This could potentially be a U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust, and estate.

An FBAR must be filed for:

  • a financial interest in or signature or other authority over at least one financial account located outside the United States if
  • the aggregate value of those foreign financial accounts exceeds $10,000 at any time during the calendar year reported.  Please note that the $10,000 limit is an aggregate of all account balances, and is not per account.

Generally, an account at a financial institution outside the United States is a foreign financial account. Whether the account produced taxable income has no effect on whether the account is a foreign financial account for FBAR purposes.

What Should You Include in Your FBAR Filing?

For each account you must report on an FBAR, you must keep records with this information: 

  • Name on the account, 
  • Account number,
  • Name and address of the foreign bank, 
  • Type of account, and 
  • The maximum value during the year. 

The law doesn’t specify the type of document to keep with this information. Documents that support your FBAR requirement may include bank or account statements or a copy of a filed FBAR if they have the required information. Generally, you must keep these records for five years from the due date of the FBAR. 

The FBAR is an annual report, due April 15 following the calendar year reported. You are allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15. You don’t need to request an extension to file the FBAR.

There are penalties for not filing a required FBAR.  In some cases, the government could fine you $10,000 per violation.  Penal penalties can also be higher depending on the specific bank account balances.

If you have questions regarding the FBAR filing requirements, our International Team is proud to be a resource to you. Connect with us to learn more.

This article was written by Jane Schultz, CPA in our Bozeman office.

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