Foreign bank accounts over $10K require FBAR reporting
The question that starts this
“I have bank accounts abroad. Do I need to report them to the IRS or another agency even if I already pay taxes on the income?”
What this scenario is about
If the aggregate value of all foreign financial accounts exceeds $10,000 at any point during the year, you must file FinCEN Form 114 (FBAR). This is a separate obligation from your income tax return.
Why this matters
FBAR penalties are among the harshest in the tax system. Willful violations can result in penalties up to the greater of $100,000 or 50% of the account balance per violation.
Common mistake
Confusing FBAR with FATCA Form 8938. They are separate filings with different thresholds, different due dates, and different enforcement agencies.
Checkpoints to work through
- 1
The $10K threshold is aggregate across all foreign accounts
Add up the maximum balances of every foreign account you held during the year. If the total exceeded $10,000 at any point, you must file.
- 2
FBAR is filed with FinCEN, not the IRS
The Report of Foreign Bank and Financial Accounts is filed electronically through the BSA E-Filing System, not with your tax return.
- 3
FBAR and FATCA Form 8938 are not the same
Form 8938 has higher thresholds and is filed with your tax return. You may need to file both, one, or neither depending on your account values.
- 4
Penalties for non-filing are severe
Non-willful penalties can reach $10,000 per violation. Willful violations face much steeper penalties and potential criminal prosecution.
Your next move
Check the maximum aggregate balance of all foreign accounts during the year. If it exceeded $10,000, file FinCEN Form 114 electronically through the BSA E-Filing system by April 15 (automatic extension to October 15).