For those of you who are compliant with the IRS or have had a read through our Guide To US Expat Taxes, you’re fully aware that the IRS wants to know about your bank or financial accounts overseas — thus the need to file the FBAR. The Report of Foreign Bank and Financial Accounts (FBAR) is required for American expatriates who have a financial interest or signature authority over any bank or financial accounts that had a balance that exceeded $10,000 at any time during the the calendar year.
While you may have a fear of the IRS, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is the organization that should be on your radar for your FBAR. According to FinCEN’s website, their mission is “to enhance U.S. national security, deter and detect criminal activity, and safeguard financial systems from abuse by promoting transparency in the U.S. and international financial systems.”
An Easy FBAR!
Last week, FinCEN announced great news for American expats who need to file the FBAR. Although late for this year’s June 30th deadline, FinCEN has developed an e-filing system for the FBAR. FinCEN’s BSA E-Filing system comes as a welcome alternative to manually filling out form TD F 90-22.1 and mailing it back to Uncle Sam. Take note that, unlike tax returns, the FBAR is only counted as filed when it is in the hands of FinCEN, not when it is in the mail. Knowing this, the e-filing system becomes a welcome addition to the process of getting compliant.
Currently, the e-filing system can only be used if one signature is required on the accounts. In the event that you and your spouse are both on an account that needs to be reported, you have two options.
- You both file separately. This allows you to take advantage of the new e-filing system and eliminates the hassle of sending your paperwork overseas. This is particularly attractive if you are filing your FBAR late and want it to be considered submitted as quickly as possible.
- You file jointly. In the event that you decide to file a joint FBAR, you’re going to need to fill out form TD F 90-22.1, stuff it in an envelope and visit your local post office, as the old-fashioned way is currently the only way to file a joint return.
As far as preparation is concerned, FinCEN has stated that they are currently working on a program that could be used for filling out the FBAR, but the program is yet to be completed. As of now, if you prefer to stick to tried and true mail delivery, these forms are still being accepted. That being said, remember that this new e-filing system is the quickest way to have your FBAR considered filed and out of the way, helping you stay compliant with your US expat taxes so you can enjoy living abroad!
What if the account is in both our names, but only one of us is American? Would I then just have to declare half of it?
Unfortunately, you do have to report all of your bank account. That being said, be sure to include your spouse on the FBAR report when sending it in.
From the IRS:
“A spouse having a joint financial interest in an account with the filing spouse should be included as a joint account owner in Part III of the FBAR. The filer should write (spouse) on line 26 after the last name of the joint spousal owner. If the filer’s spouse is required to report only jointly owned financial accounts that are reported on the filer’s FBAR, the filer’s spouse need not file a separate FBAR but must also sign the filer spouse’s FBAR to fulfill his or her reporting obligation. If the filer’s spouse is required to file an FBAR for any account that is not jointly owned with the filer, the filer’s spouse must file a separate FBAR for all of the accounts, including those owned jointly with the other spouse.”
If you have any other questions regarding your taxes, please don’t hesitate to ask us!
Sincerely,
The Greenback Team