If you are wondering what FBAR is, it stands for Foreign Bank Account Report. A US person who has ownership or control of foreign bank accounts with an aggregate value of $10,000 in the calendar year-he/she has to file FBAR. Under the law known as Bank secrecy act, every year you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts.
Who Must File
A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:
- a financial interest in or signature or other authority over at least one financial account located outside the United States if
- the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
You don’t need to report all Foreign Financial accounts. Before we get into the details let’s find out what Foreign Financial accounts are. An account at a financial institution located outside the United States is a foreign financial account. Whether the account produced taxable income has no effect on whether the account is a “foreign financial account” for FBAR purposes.
If your Foreign Financial account falls in the following category, one doesn’t have to report it.
- Correspondent/Nostro accounts,
- Owned by a governmental entity,
- Owned by an international financial institution,
- Maintained on a United States military banking facility,
- Held in an individual retirement account (IRA) you own or are beneficiary of,
- Held in a retirement plan of which you’re a participant or beneficiary, or
- Part of a trust of which you’re a beneficiary, if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.
You don’t need to file an FBAR for the calendar year if:
- All your foreign financial accounts are reported on a consolidated FBAR.
- All your foreign financial accounts are jointly-owned with your spouse and:
You completed and signed FinCEN Form 114a authorizing your spouse to file on your behalf, and your spouse reports the jointly-owned accounts on a timely-filed, signed FBAR.
When to File
The FBAR is an annual report, due April 15 following the calendar year reported.
You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15. You don’t need to request an extension to file the FBAR.
We know you have many questions regarding the accounts to report. Your questions need to be answered and your problems need to be assisted by an experienced and professional CPA.
Mathews Chacko is one of the most experienced CPAs in Austin with more than 10 years of experience. His team has worked with both startups and companies with оvеr 10 million dollars іn grоѕѕ revenues реr уеаr. Mathews CPA Inc represents clients in the United States and around the globe.
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