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April’s tax season is here. 🧘
If you’re a U.S. person with foreign accounts, there’s a critical filing you can’t afford to overlook: the FBAR, or Foreign Bank Account Report (FinCEN Form 114).
Failing to file can lead to penalties starting at $10,000, with fines escalating depending on the severity of the oversight. Whether you’re a founder, a business owner, or an individual with overseas accounts, this guide will walk you through the essentials: who must file, what accounts are covered, and how to stay compliant year after year.
Let’s dive in.
If you are a U.S. person—this includes citizens, residents, corporations, partnerships, LLCs, trusts, or estates—you are required to file the FBAR if you have a financial interest in, or signature authority over, one or more foreign financial accounts. This filing becomes mandatory when the combined total value of those accounts exceeds $10,000 at any point during the calendar year, even if just for a day.
For example, if you have several foreign accounts and their combined balance crosses the $10,000 threshold, you need to report all of them, not just the one that pushed you over the limit.
The FBAR isn’t limited to traditional bank accounts. It covers a wide range of foreign financial assets. These include:
A common point of confusion involves foreign credit cards. Generally, you do not need to report a foreign credit card. However, if the credit account maintains a positive balance, you may be required to report it.
The FBAR must be filed electronically through the FinCEN BSA E-Filing System. There’s no paper option—everything is done online.
Before you begin, make sure you have these details ready for each account you need to report:
Once submitted, you’ll receive confirmation of your filing via the FinCEN system. Keep that for your records!
Not sure if you should file this? Book a free consultation with Lazo.
The FBAR is an annual requirement. You must file it by April 15 each year, covering the previous calendar year. If you miss this deadline, there’s an automatic extension available until October 15—no extra forms or applications are necessary to qualify for this extension.
While the extension buys you more time, it’s important not to delay. Missing the extended October deadline can expose you to steep penalties.
The penalties for failing to file the FBAR are severe—and they scale depending on whether the omission is considered willful or non-willful.
For non-willful violations, you can be fined up to $10,000 per violation. This applies even if you didn’t realize you were supposed to file.
For willful violations—meaning you knew (or reasonably should have known) you needed to file and chose not to—the penalty can be the greater of $100,000 or 50% of the balance in the account at the time of the violation, for each year the FBAR wasn’t filed.
These fines are per account, per year, which can quickly add up.
Many people confuse the FBAR (FinCEN Form 114) with FATCA reporting (IRS Form 8938), but they serve different purposes.
The FBAR reports foreign financial accounts and is filed directly with FinCEN. It applies when your foreign accounts exceed $10,000, regardless of whether those accounts generated income.
FATCA, on the other hand, focuses on broader foreign financial assets and is filed with your annual tax return to the IRS. The thresholds for FATCA are higher and depend on your filing status and whether you live in the U.S. or abroad.
In some cases, you may need to file both forms for the same accounts, which makes understanding the distinction even more important.
Filing the FBAR may seem straightforward, but many people make costly mistakes. Here are a few you should watch out for:
No, unless they have a positive balance that needs reporting.
Yes, if they are held outside the U.S. and exceed $10,000 in total value.
Yes, if they meet the filing thresholds.
Currently, no. But regulations could change, so it’s worth checking annually.
Yes, with FinCEN Form 114a, you can authorize your spouse to file for you.
If you have foreign bank accounts, the FBAR isn’t optional—it’s a requirement with real consequences for non-compliance. The good news is, with the right guidance, it’s a simple task to check off your list each year.
Need help filing your FBAR? At Lazo, we make it easy. Book a free consultation, and we’ll ensure your filing is accurate, complete, and on time.
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