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When Do Foreign Bank Accounts Have to Be Reported?

When Do Foreign Bank Accounts Have to Be Reported?

The general rule for Foreign Bank Account Reports (FBARs) is that they must be filed if the aggregate account balance exceeds $10,000 at any time during the year. This includes any account you have a financial interest in or signature authority over.

There are some exceptions and special rules that may apply to your case. FBAR penalties are $10,000 for the non-willful failure to file and much higher for willful violations, so consult a tax attorney if you aren’t sure whether you have a filing requirement.

Child’s FBAR

A child is generally responsible for filing their own FBAR if they meet the above requirements. If they are unable to file their own FBAR, the parent or guardian must file it.

Keep this requirement in mind if your child has any type of financial account in a foreign country.

FBARs for Joint Accounts

Your spouse may not have to file a separate FBAR for your joint account. However, they must meet all of the following conditions:

  • Every account your spouse is required to report is jointly owned with you.
  • You report all the accounts on your FBAR.
  • You must complete Form 114a to authorize the electronic filing of the FBAR.

If you don’t meet all of these conditions, both spouses need to file separate FBARs and each must report the entire value of the jointly owned accounts.

U.S. Residents

U.S. residents must file FBARs if they otherwise have a filing requirement. However, it’s important to realize that residency for tax purposes may be different than residency for immigration purposes.

One important rule for tax residency is the substantial presence test. If you meet the conditions of this test, you may be considered a U.S. resident for tax purposes. This could require you to file a tax return and an FBAR.

Signature Authority

There are some cases where a person with signature authority over an account, but no financial interest in the account, can avoid the FBAR filing requirement. These rules typically apply when you have signature authority in your capacity as an employee or officer of an entity and the entity owns or maintains the foreign financial account.

Make sure you understand your FBAR filing requirements and determine your offshore disclosure options if you have unfiled FBARs.

Get help with FBAR and offshore disclosure matters by calling The Gartzman Law Firm at (770) 939-7710. We can listen to your concerns and help you find the best tax resolution strategy for your case.