If the total balance of your foreign financial accounts exceeded $10,000 at any time during the calendar year, you need to file an FBAR.
This article explains who must file, which accounts are covered, what happens if you don’t file, and includes a self-evaluation checklist to help you determine if you should file an FBAR this year.
What Is the FBAR?
The FBAR (Foreign Bank Account Report), officially known as FinCEN Form 114, is used to report foreign bank and financial accounts to the Financial Crimes Enforcement Network (FinCEN).
It’s not a tax form and isn’t filed with your income tax return. Instead, it’s submitted electronically through the BSA E-Filing System, part of the Bank Secrecy Act requirements designed to prevent tax evasion and money laundering.
The fbar filing requirements apply to all U.S. persons—citizens, Green Card holders, and certain residents—who hold foreign accounts with an aggregate value of more than $10,000 at any point in the calendar year.
Who Needs to File an FBAR
You must file an FBAR if you are a U.S. person with a financial interest in, or signature authority over, one or more foreign financial accounts and the total foreign account balances exceeded $10,000 during the year.
This includes:
- Individuals living in or outside the U.S.
- Married filing jointly or married filing separately taxpayers
- Businesses, corporations, trusts, or estates formed under U.S. law
Types of Accounts Covered
You must report foreign financial accounts such as:
- Checking accounts, savings accounts, and brokerage accounts held at a foreign bank or foreign financial institution
- Investment accounts, including mutual funds or other pooled foreign assets
- Retirement accounts, including certain foreign employer pensions
- Foreign currency accounts
- Jointly owned accounts or accounts with signature authority
These rules apply even if the accounts did not earn taxable income during the tax year.
What Counts as a “Financial Interest” or “Signature Authority”?
Financial Interest
You have a financial interest in an account if:
- You own the account directly.
- Someone else holds the account on your behalf.
- You are the owner of an entity that holds the foreign financial account.
- You benefit from funds held in a foreign bank account.
Signature Authority
You have signature authority if you can control or direct the movement of funds through direct communication with the financial institution, even if you don’t own the account.
For example, if you’re an employee authorized to access your employer’s foreign financial account, you may still need to file an FBAR.
FBAR Filing Threshold and Deadlines
You must file an FBAR if the aggregate value of all your foreign financial accounts exceeded $10,000 at any time during the calendar year.
Even if each account is small, you must file an FBAR if the total across all foreign financial accounts exceeds $10,000 at any time during the calendar year.
The FBAR filing deadline is April 15, with an automatic extension to October 15. You do not need to request the extension; it’s granted automatically every year.
For guidance on calculating your maximum value, see our detailed guide:
How to Determine the Maximum Value of an Account for FBAR
How to File an FBAR
The FBAR form is filed electronically through FinCEN’s BSA E-Filing System using FinCEN Form 114.
You’ll need to create a BSA E-Filing Account, gather your bank statements or account statements, and report all foreign bank and financial accounts meeting the threshold.
For a full overview of the process and documentation you’ll need, visit:
FBAR Compliance: From Requirements to Submission
Self-Evaluation Checklist: Do You Need to File an FBAR?
Use this checklist to quickly determine if you’re required to file an FBAR for the current tax year.
✅ Step 1: Are you a U.S. person?
- U.S. citizen
- Green Card holder
- Resident meeting the substantial presence test
✅ Step 2: Do you own or have signature authority over any of the following in a foreign country?
- Foreign bank accounts (checking, savings, term deposits)
- Foreign brokerage accounts or mutual funds
- Retirement accounts or foreign pension plans
- Employer’s foreign financial account
- Jointly owned accounts with a spouse or relative
✅ Step 3: Were the total balances across all accounts more than $10,000 at any point during the year?
Include foreign currency conversion using the Treasury’s exchange rate on December 31.
✅ Step 4: Are your accounts held at a foreign financial institution located outside the U.S.?
✅ Step 5: Do you have a financial interest (ownership) or signature authority (access/control) over those accounts?
If you answered yes to all five, you are required to file an FBAR.
What Happens If You Don’t File an FBAR
Failing to comply with FBAR reporting requirements can lead to serious civil and criminal penalties under the Bank Secrecy Act.
Civil Penalties
- Non-willful violations: For penalties assessed on or after January 17, 2025, a non-willful violation can result in a civil penalty of up to $16,536 per annual FBAR, rather than per account. Reasonable-cause relief may apply.
- Willful violations: For penalties assessed on or after January 17, 2025, a willful violation can result in a civil penalty for each unreported account equal to the greater of $165,353 or 50% of the account balance at the time of the violation. Criminal penalties may also apply.
Criminal Penalties
In cases of willful failure to file, criminal penalties may apply, including fines and imprisonment.
The IRS treats willful behavior as deliberate attempts to hide foreign financial assets or offshore accounts for the purpose of tax evasion.
Filing Late? Use the Delinquent FBAR Submission Procedures
If you missed a filing deadline, don’t panic. The IRS allows eligible U.S. persons to file past-due reports using the Delinquent FBAR Submission Procedures.
This process helps taxpayers catch up without facing penalties—provided they properly explain their non-willful conduct and file through the BSA E-Filing System.
Learn more about this process here:
Delinquent FBAR Submission Procedures
Accounts Exempt from FBAR Reporting
Not all foreign financial accounts must be reported. You don’t need to file an FBAR for:
- Accounts held at a U.S. military banking facility
- Individual Retirement Accounts (IRAs) or 401(k)s maintained with a U.S. institution
- Accounts owned by a government entity
- Foreign financial accounts owned by an international financial institution where you are an employee and have no personal financial interest
Always confirm if your foreign financial institution falls under an exemption.
Calculating the Aggregate Value
The aggregate value is the combined highest balance of all foreign bank and financial accounts at any time during the calendar year.
Convert foreign currency to U.S. dollars using the Treasury’s exchange rate as of December 31.
Your account statements and bank statements from all foreign financial institutions will help verify balances.
For guidance on determining your maximum value correctly, refer to our full resource:
How to Determine the Maximum Value of an Account for FBAR
Common Types of Foreign Financial Accounts
The term “foreign financial accounts” includes a wide range of assets held in a foreign country, such as:
- Foreign bank accounts (savings, checking, time deposits)
- Brokerage accounts or investment accounts holding foreign stocks or mutual funds
- Retirement accounts and foreign employer pensions
- Insurance policies with cash value (life insurance, annuities)
- Certain foreign financial accounts at foreign financial institutions
Even Canadian bank accounts and offshore accounts are covered under the FBAR filing requirements.
FBAR Filing for Businesses and Entities
Corporations, partnerships, or trusts registered in the U.S. with foreign financial accounts are also required to file an FBAR if their aggregate value exceeds $10,000.
Authorized signers or individuals with signature authority may also have filing obligations.
Penalties Can Be Avoided with Proper Filing
By accurately completing your FinCEN Form 114 through the BSA E-Filing System, you can stay compliant and avoid unnecessary criminal penalties or fines.
Even if your foreign financial assets don’t generate taxable income, you must still report foreign accounts when above the threshold.
To ensure accuracy, many expats work with professionals like 1040 Abroad, who handle FBAR filing, tax return preparation, and foreign bank account reporting together for one flat fee.
You can learn more about our services here:
FBAR Filing – Report of Foreign Bank and Financial Accounts
