An FBAR is a Report of Foreign Bank and Financial Accounts
DO I NEED TO FILE AN FBAR?
US Persons must file an FBAR if:
1.The United States person had a financial interest or significant authority over at least one financial account located outside the United States; and
2 . the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
United States person includes U.S. citizens; U.S. residents; entities including but not limited, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
Failing to file an FBAR, for any reason, can result in penalties.
A person who holds a foreign financial account may have a reporting obligation even if the account produces no taxable income. The reporting obligation is met by answering questions on a tax return about foreign accounts (for example, the questions about foreign accounts on Form 1040 Schedule B) and by filing an FBAR.
You must file an FBAR even if the foreign account does not produce any taxable income.
The FBAR filing deadline is June 30 of the year following the year being reported. FBAR must be filed electronically. It is filed separately from your federal tax return. If you are granted an IRS extension for filing your income tax return. it does not apply to the time to file an FBAR.
What information is reported on an FBAR?
The FBAR must provide:
- the name in which each account is maintained;
- the number or other designation of the account;
- the name and address of the foreign financial institution that maintains the account;
- the type of account; and
- the maximum account value of each account during the reporting period.
All amounts reported on an FBAR must be reported in U.S. dollars. In order to report an account denominated in non-U.S dollars, one must determine the maximum account value in the currency of the account and convert that value to U.S. dollars using the exchange rate in effect on the last day of the calendar year.