It’s That Time of Year - A Brief Reminder on FBAR Reporting for US Investors
It’s that time of the year again when Americans living abroad, as well as those living in the United States, who have a foreign bank (and other financial) account may need to report them for the Report of Foreign Bank and Financial Accounts form, or FBAR. While most US investors are aware, its still always worth the reminder each year.
The reporting deadline for filing of the FinCEN Form 114 (or the “FBAR” as it is still commonly called) is April 15, 2022. We understand that FinCEN grants an extension to filers who missed the original deadline to file out until October 15, 2022. Please review the FinCEN website for information.
A “Foreign Financial Account” can be a foreign bank account, insurance policy, etc. where you had a financial or beneficial interest in, or signature authority over, and the aggregate balance of all your accounts exceeded $10,000 at any time during the year.
These accounts need to be reported yearly to the Department of Treasury by now electronically filing a Financial Crimes Enforcement Network (FinCEN) Report 114, Report of Foreign Bank and Financial Accounts (FBAR).
Just a few FBAR tips:
When preparing your FBAR form, it is important to complete it correctly and consistently. In the past, we at BFI Consulting have received copies of FBARs from clients for various reasons, and have seen how the accounts, although reported in the form, contained incorrect information. Most notable amongst the errors made were in the names and addresses of the financial institutions, or in the account or policy numbers used to identify the financial account.
Print a copy of the FBAR in the last stage of the online completion, and keep it in your files, as well as the system confirmation once you submit the FBAR. Once filed, we have heard it is near impossible to get copies of past submissions.
You can start the process by clicking on the BSA E-Filing System.
Next to the FBAR, please be sure to not forget about the filing of the Form 8938, a similar form that needs to be supplied to the IRS. If you are unfamiliar with the form 8938, or need more information on how it compares to the FBAR, go to the Comparison of Form 8938 and FBAR Requirements.
Finally, although not limited to foreign accounts, e.g., applying also to domestic accounts, what follows are a couple of links from the IRS with information on reporting requirements of virtual currency transactions, in case you had any during the reporting period:
Tax Time Guide: IRS reminds taxpayers to report gig economy income, virtual currency transactions, foreign source income and assets
IRS reminds taxpayers they must check a box on Form 1040, 1040-SR or 1040-NR on virtual currency transactions for 2021.
We really hope that this reminder is helpful. And, as a reminder, we are not US tax advisors or accounting experts; for ultimate advice on the completion and filing of your forms, we recommend you check with your local tax person or accountant.