Frequently Asked Questions
Foreign Bank Account Reporting (FBAR and FATCA)
Wondering if FBAR (Foreign Bank Account Reporting) or FATCA (Foreign Account Tax Compliance Act) applies to you?
Your financial interest in one or more overseas financial accounts and the total value of all of the financial accounts combined during the tax year may require you to complete the Foreign Bank Account Reporting form.
We understand the importance of keeping your financial account information safe and secure. We only share information with you (and receive information from you) via a secure private folder, which uses the same security encryption as most banks use.
We make it easy for you to get your FBAR filings done. You can count on your CPA or IRS Enrolled Agent working directly with you through the FBAR reporting process (and beyond!).
If you are thinking about working with a US expat tax professional to complete your FBAR filings but still have a few questions, get all the answers here.
- Do I need to report my RRSP on FBAR?
- Where do I download the forms for filing my taxes and my FBARs on my own?
- Does my foreign pension have to be included on my FBAR reporting?
- How much do I need to have overseas to worry about filing under FATCA?
- How do I know if I need to complete the Foreign Bank Account Reporting (FBAR)?
- What kinds of foreign financial accounts do I have to declare on my US expat tax return?
- Can I just have Greenback Expat Tax Services prepare my Foreign Bank Account Reporting (FBAR) and do my taxes on my own?
- What is Form 8938?
- How does Form 8938 differ from Foreign Bank Account Reporting (FBAR)?
- What do I do if I haven’t filed foreign bank account reporting (FBAR) for several years?
Do I need to report my RRSP on FBAR?
Unfortunately, there is a bit of a gray area when it comes to what needs to be reported on an FBAR. Although many feel RRSPs don’t need to be reported, the most conservative approach would be if you can access the funds and withdraw at any point, then report it on the FBAR.
Also, if applicable, you should make sure that the “yes” box is checked for question 8 on Schedule B, which reads: During 2017, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If yes, you may have to file Form 3520. RRSPs are often considered a foreign trust.[back to top]
Where do I download the forms for filing my taxes and my FBARs on my own?
The relevant financial forms (1040, 2555, etc.) can be downloaded directly from the IRS website.
The FBAR must be filed electronically via FinCEN Form 114 on the BSA e-filing system.[back to top]
Does my foreign pension have to be included on my FBAR reporting?
Although it can depend on how your pension is set up, in general, the answer is yes. The FBAR instructions require you to report all financial accounts, and in the majority of cases, pensions are considered financial accounts.[back to top]
How much do I need to have overseas to worry about filing under FATCA?
Having foreign accounts over a certain threshold often necessitates additional form filing. Under FATCA regulations, if an individual has more than $50K in a foreign account, they must file Form 8938. Fortunately though, these thresholds are much higher for Americans living abroad – roughly $200K is needed to file. As such, if you do not have more than $200K in foreign accounts, FATCA is unlikely to impact you.
One other form you should know about is the FBAR. The FBAR is needed if you have more than $10K in foreign accounts. If this is the case, you would need to file the last 6 years to be considered caught up. We can file the FBAR for as little as $95 per year, and this covers reporting up to five accounts.[back to top]
How do I know if I need to complete the Foreign Bank Account Reporting (FBAR)?
Basically, anyone with $10,000 or more (USD equivalents included) in a foreign bank or financial account at any point during the calendar year will be required to file the FBAR. So, if your bank account in France typically has a balance of $9,950, but for one day has an extra $50, you will need to file an FBAR. Cumulative balances are also counted, so if you have $3,000 in four separate accounts, you will be required to file the FBAR. For more information, please refer to our blog post: Everything You Need to Know About the FBAR.[back to top]
What kinds of foreign financial accounts do I have to declare on my US expat tax return?
In general, any bank or financial account held in a bank located outside of the geographical boundaries of the United States is considered a foreign account, regardless of the nationality of the institution that holds the account. According to the Treasury Department: “The term ‘financial account’ includes any bank, securities, securities derivatives or other financial instruments accounts. Such accounts generally also encompass any accounts in which the assets are held in a commingled fund, and the account owner holds an equity interest in the fund (including mutual funds).” The term also means any savings, demand, checking, deposit, time deposit, or any other account (including debit card, prepaid credit card accounts, and many foreign pension/retirement accounts) maintained with a financial institution or other person engaged in the business of a financial institution.[back to top]
Can I just have Greenback Expat Tax Services prepare my Foreign Bank Account Reporting (FBAR) and do my taxes on my own?
Yes! We understand that some expats prefer to file their own taxes or perhaps have no US filing obligation, but still need to file FBAR. Please contact us if you would like us to file FBAR on your behalf.[back to top]
What is Form 8938?
Form 8938 is the report required under the Foreign Account Tax Compliance Act (FATCA). This requires individuals or businesses with foreign accounts meeting certain reporting thresholds to file Form 8938 with the IRS.
Form 8938 is part of your US federal tax return, and as such, will have the same filing deadline, including extensions. For more information on Form 8938 and FATCA, please check out our in-depth article about Form 8938.[back to top]
How does Form 8938 differ from Foreign Bank Account Reporting (FBAR)?
The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank Account Report (FBAR or FinCEN Form 114) have a number of very important differences. The primary difference is that Form 8938, which is part of the FATCA laws, gets filed with your US Federal Tax Return and submitted to the IRS. In addition, the filing threshold is much higher than the FBAR, starting at $200k for US expats, and the deadline will be the same as the deadline for your Federal tax return, including extensions. The FBAR deadline will be the same as your Federal Tax Return, and you will have the option to file up to a six-month extension – however, it will be filed with the US Treasury Department. FBAR is required if you have as little as $10,000 in all of your combined foreign accounts. There are also a number of differences related to what assets need to be reported. For more information on how the FBAR differs from FATCA, please watch this video.[back to top]
What do I do if I haven’t filed foreign bank account reporting (FBAR) for several years?
The IRS has multiple options for individuals who are behind on their taxes or FBAR filings. The 2012 Offshore Voluntary Disclosure Program is still open. The Streamlined Program allows individuals who are low risk to catch up on their late taxes, and some people are doing what is informally known as a “quiet disclosure”, meaning they just file the late paperwork and hope for the best. The appropriate option will depend on your specific circumstances, but generally speaking, unless you have been actively hiding money offshore, the Streamlined Program is likely your best option. This requires you to file your last 3 years of tax returns and up to 6 FBARs.[back to top]