Do You Have a Foreign Bank Account? Here’s What You Need to Know About the FBAR
If you’re a U.S. citizen or resident and have money sitting in a foreign bank or investment account, you might have an important reporting obligation you’ve never heard of—the FBAR, or Report of Foreign Bank and Financial Accounts.
Even if you don’t owe any taxes on those funds, failing to file this report could result in serious penalties. So let’s break it down: what the FBAR is, who needs to file it, and why it matters.
What Is the FBAR?
The FBAR—short for FinCEN Form 114—is not a tax return, but it’s a required annual report that must be filed if you have foreign accounts that meet certain criteria. It was created under the Bank Secrecy Act to track funds that U.S. persons may be holding overseas.
Here’s the basic rule:
If you’re a U.S. person (individual or business) and had more than $10,000 in total across all your foreign financial accounts at any point during the year, you likely need to file the FBAR.
Who Must File?
You must file an FBAR if:
You are a U.S. citizen, green card holder, resident, or a business formed in the U.S.
You have financial interest in or signature authority over one or more foreign accounts
The total value of all your foreign accounts exceeded $10,000 at any point during the year (even just for one day)
This applies to individuals, corporations, partnerships, LLCs, trusts, and even estates.
What Counts as a “Foreign Account”?
A foreign account includes more than just a bank savings account. Some common examples:
Checking or savings accounts at a bank overseas
Foreign investment or brokerage accounts
Certain insurance policies or annuities with a cash value
Foreign mutual funds
The key is location: if the account is outside the United States, it could count.
When Is the FBAR Due?
The FBAR is due every year by April 15, covering the previous calendar year. If you miss the deadline, there’s usually an automatic extension until October 15—but don’t wait to act.
What Happens If You Don’t File?
This is where things get serious. Failing to file the FBAR—even if you didn’t know you had to—can come with steep penalties.
Non-willful violations (unintentional): Up to $10,000 per missing report (not per account)
Willful violations (if the IRS believes you knew and didn’t file): The greater of $100,000 or 50% of the account balance
In the most extreme cases, criminal charges can also apply, leading to fines or jail time.
Does My Child Need to File an FBAR?
Yes. If your minor child meets the same foreign account thresholds, they’re also required to file an FBAR. As the parent or guardian, it’s your responsibility to help them stay compliant.
What About Past Years?
If you missed filing in prior years, you’re not alone—and there may still be options. But it’s important to speak with a qualified tax professional before attempting to fix anything yourself. The IRS offers various voluntary disclosure programs, and how you approach the situation can make a huge difference in penalties.
What’s My Accountant’s Role?
If you’re working with a professional tax preparer, they can help identify whether you need to file the FBAR—but don’t assume they’ll do it unless you ask.
Even though the FBAR is not part of your regular tax return, your tax pro can help you:
Understand your reporting obligations
Accurately answer foreign account questions on your Form 1040
Prepare the FBAR (if they offer that service)
Discuss past noncompliance, if needed
Still unsure if the FBAR applies to you?
- At KPM Tax Pro, we help individuals and business owners navigate foreign account reporting and stay compliant with U.S. tax laws. If you’ve got money overseas or just have questions, we’re here to guide you—no stress, no judgment.
