by Jenya Rose, EA, IAR
Don’t forget FBAR (Foreign Bank Account Reporting) this year if you have $10,000 in a foreign bank account.
If at any time during the tax year you had $10,000 USD or more in a foreign bank account (including a total of $10,000 across multiple foreign accounts) you need to report it! There’s not necessarily any tax that needs to be paid (unless you got some bank interest, which you definitely want to report on your tax return even if you didn’t receive an annual statement from the bank).
Regardless of whether you made interest on a bank account or dividends/gains on an investment you need to report that account to the US. You must file your report each year at this site.
These are relatively new regulations. They’ve been increasing enforcement since 2009, but just this past year the US struck a deal with foreign bank accounts to report the names of US account holders. So, this is the time to start reporting if you haven’t already. It always looks good if you voluntarily report something instead of being caught with your hand in the cookie jar, so to speak.
You report the name and address of the bank, the highest amount you had in there during the calendar year, and whether or not you own the account jointly with someone else.
The penalties for not reporting are quite steep, but clearly the goal is to find people hiding major amounts of money in foreign banks – not Joe Shmo. If you have willfully neglected to learn about this you could be exposed to a penalty. If you literally had no idea this existed and you have no bank interest that went un-reported you shouldn’t lose too much sleep.
FBAR has been covered in posts like this by Robert W. Wood, a Forbes contributor. If you want to know everything about this you can happily go down the rabbit hole of hyperlinked posts with a genius tax attorney who clearly knows the landscape. But for the purpose of this post I’m going to keep it simple: report your foreign bank interest/gains on your tax return and file the FBAR report each year by June 30th.
If you are a client of ours and would like us to efile your FBAR report just fill out this form and email it to us. If you are not a current client and would like your FBAR filed email us (We will need a couple pieces of info along with the form).
Article written by Jenya Rose, EA, RTRP, IAR. Jenya owns Rose Tax & Financial and AirlineTaxes.com She and her employees work virtually with their clients, over email, phone, web conference, online meeting and secure portal to make the tax return process simple and convenient. She can be reached at (847)715-8930 or at airlinetaxes@gmail.com
We are happy to answer any questions that you may have!