FBAR and FATCA Reporting
FBAR Filing Requirement
A US person that has a financial interest in or signature authority over foreign financial accounts must file a report of Foreign Bank and Financial Accounts (FBAR) if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. The FBAR is reported to the Department of Treasury on FinCEN Report 114.
Types of Foreign Financial Accounts
The following types of accounts are considered to be foreign financial accounts:
- Bank accounts, including savings, checking and time deposits
- Financial accounts in a foreign branch of a U.S. bank or financial institution
- Mutual funds that you hold an interest in the fund
- Insurance policies or annuity contracts with a cash value
- Securities accounts, i.e. brokerage accounts and foreign stock held in a foreign financial institution
You do not need to claim the following on the FBAR:
- Domestic mutual funds that invest in foreign stocks
- Personal property that is held directly
To clarify, Israeli residents in particular are required to report their Keren Pensia, Kupat Gemel and Keren Hishtalmut.
FBAR Filing Deadline
The FBAR deadline is 15-April with an automatic extension until 15-October. There could be significant penalties for late filing an FBAR and it is critical to file on time. Many clients choose to file the FBAR themselves and feel free to review our instructions for filing the FBAR on your own.
The Foreign Account Tax Compliance Act (FATCA) was introduced by the US government in 2010 and it requires US taxpayers to report foreign financial assets to the IRS, for example, foreign bank accounts, foreign stock, mutual funds, and foreign life insurance or partnership interests. FATCA applies to people who are treated as US persons for tax purposes or people with links to the US.
American expats must file Form 8938 (FATCA form) with their tax return if one of the following conditions apply:
- Married people filing jointly whose aggregate value of specified foreign financial assets exceed $400,000 on the last day of the tax year or more than $600,000 at any time during the year.
- Single people, married people filing separately or heads of households whose aggregate value of the specified foreign assets exceed $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.
How We Can Help
Our expert team of CPAs and EAs have helped hundreds of Americans abroad with their FBAR and FATCA reporting and we would be glad to help you too.