A US citizen is required to report their foreign accounts once they exceed $10,000 over one year. This is done via form FBAR 114 to the FINCEN, the US Department of Treasure’s Financial Crimes Enforcement Network. After filing, the documents used for the report must be kept for 5 years.
When is it due?
Since 2017, the FBAR is filed at the same time as the 1040, that is, April 15. A six month extension is possible and does not necessitate and action, meaning that filing can be done until October 15.
What is reported?
Any account in which the US citizen has any legal hold must be reported, including accounts kept for others and any account in which the citizen is a signatory.
Accounts held by a company, partnership, trust and/or other entity in which 50% or more of the rights belong to a US citizen are also to be reported.
These accounts include:
Bank accounts, investments, savings and deposits
Savings policies
Education funds
Pension funds
Executive insurance with a savings component
Provident funds
If a US citizen has more than 25 accounts, they are eligible to significant breaks in filing and are only required to report the number of accounts at their possession. Documentation must still be kept for all of the accounts.
Repercussions of non-compliance
Anyone legally required to file an FBAR who fails to do so can be fined $10,000 for each account. Knowingly failing to report an account(s) may be fined $100,000 or 50% of the account balance – the greater of the two.
Delinquent FBAR Submission Procedures
Anyone reporting income from offshore accounts but non-willingly failed to file their FBAR may file along with an explanation on why they failed to comply, thereby avoiding the penalties – as long as the taxpayer was not requested to file an FBAR by the IRS and is not under IRS investigation.
Yes, age does not exempt from filing FBAR. If the child cannot file on their own due to their age, their parent or guardian must do so on their behalf.
Yes, since it is outside the US. The fact that the branch belongs to an American bank has no significance.
Just like the previous answer, reporting is dependent on the location of the branch/account. Therefore, there is no obligation to report, since the account is located in the US.
Yes, it must be reported. As part of the disclosure, you report that the shared ownership is with a non-US citizen.
