The United State law requires U.S. persons to report their overseas financial accounts because foreign financial institutions may not be subject to the same reporting requirements as domestic institutions. There may be civil and criminal penalties that may apply if you do not properly file these reports.

The Bank Secrecy Act (BSA) requires U.S. persons to file a FBAR (FinCEN form 114) if they have:

1. Financial interest in, signature authority or other authority over one or more accounts, such as bank accounts, brokerage accounts and mutual funds, in a foreign country, and

2. The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

A U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate or trust.

The FBAR is an annual report that is due April 15 following the calendar year reported. There is an automatic extension of October 15.

The FBAR is filed independent of your tax return at the following website:

https://bsaefiling.fincen.treas.gov/main.html

You must calculate the maximum account value for each international account during the year and convert this value by the US Treasury’s rate for the year.

If the maximum account value of a single account or aggregate of the maximum account values of multiple accounts exceeds $10,000, an FBAR must be filed. An FBAR is not required to be filed if the person did not have $10,000 of maximum value or aggregate maximum value in foreign financial accounts at any time during the calendar year.

Form 8938

There is a big difference between filing your FBAR and Form 8938. Often times, a taxpayer may be required to file their FBAR and Form 8938 for a particular year.

This link below from the IRS is very useful for determining which forms you may need to file.

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements