Imagine facing a $25,000 fine just for forgetting a form. That’s the cost of a willful FBAR violation on $50,000 held abroad (up to 50% of the account balance). Since 1970, the Bank Secrecy Act has required U.S. persons to disclose foreign bank, brokerage, and other financial accounts when balances exceed $10,000 at any time during the year.
Key idea: Filing on time helps you avoid costly penalties and keeps your expat life in Hong Kong running smoothly.
why you must disclose foreign accounts
U.S. law aims to prevent tax evasion and improve global transparency by tracking assets held abroad (you’re part of this effort). Foreign financial institutions may not share your account details with the IRS or FinCEN unless you file. Reporting ensures your overseas balances are visible to regulators. Together with FATCA regulations, these FBAR rules form the core of your foreign account compliance obligations.
which accounts need reporting
You must file an FBAR if you have signature authority or financial interest in foreign accounts that total more than $10,000 at any point in the year. These FBAR rules apply separately from FATCA thresholds (see fatca reporting thresholds). Below is a summary of common account types:
| Account type | Need to report? | Notes |
|---|---|---|
| Bank account | Yes | Include checking, savings, and time deposits |
| Brokerage account (mutual funds, securities) | Yes | Include stocks, bonds, and mutual funds |
| Trust or nominee account | Yes | Signature authority is reportable |
| IRA or qualified retirement plan | No | Exempt under FBAR instructions |
Spousal accounts: if you file separately, each spouse must file an FBAR reporting full account values unless you complete and sign Form 114a to authorize joint e-filing. Children generally file their own FBARs, or a guardian must file on their behalf. For detailed rules, check foreign bank account reporting rules.
how to file your foreign account report
You file electronically through FinCEN’s BSA E-Filing System using FinCEN Form 114. It’s due April 15 with an automatic extension to October 15 (no separate request needed). Here’s how you can prepare:
- Gather statements showing each account’s highest value during the year.
- Note account numbers, institution names, and maximum balances.
- Access the BSA E-Filing System and complete Form 114 fields.
- File by April 15 to avoid penalties (the system grants an auto extension to October 15).
- Keep records for five years from the FBAR due date.
Learn more at irs foreign account disclosure.
what happens if you miss the deadline
Missing your FBAR deadline can trigger civil and criminal penalties. The IRS considers the facts to determine penalty levels (you’ll want to act quickly if you’ve fallen behind).
- Non-willful violations can incur up to $16,536 per report (adjusted annually).
- Willful violations can reach $165,353 or 50% of the account balance per violation.
- Criminal penalties include fines up to $250,000 and up to five years in prison.
- The IRS can assess penalties up to six years after the due date, or indefinitely if the FBAR was never filed.
Good news (this is easier than it sounds): if you haven’t filed and haven’t been contacted by the IRS, you can use the overseas bank account reporting delinquency procedures to minimize penalties.
quick recap and next steps
- Check if your combined foreign accounts exceed $10,000.
- Gather quarterly statements and account details.
- File FinCEN Form 114 electronically by April 15 (auto extension to October 15).
- Use delinquency procedures if you’ve missed deadlines.
For help with your expat tax return preparation or to ensure full compliance, contact American Pacific Tax. You’ve got this—proper filing gives you peace of mind.
frequently asked questions
do I need to report my IRA on an FBAR?
No. Foreign financial accounts held in IRAs and qualified retirement plans don’t require FBAR reporting (they’re exempt under the FBAR instructions).
what is the FBAR deadline and extension process?
The FBAR is due April 15 following the calendar year, with an automatic extension to October 15. You don’t need to request the extension separately when you file through the BSA E-Filing System.
can I file one FBAR with my spouse?
You can e-file jointly if both spouses complete and sign FinCEN Form 114a. Otherwise, each spouse must file a separate FBAR reporting the full value of joint accounts.
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