If you have overseas accounts, you may need to report those accounts to the US Treasury Department by completing a Report of Foreign Bank and Financial Accounts (FinCEN Form 114 or "FBAR") each year. This includes foreign accounts you own as well as those in which you simply have an interest or for which you have the authority to execute transactions for the account on behalf of its owner.
Who Qualifies for Foreign Account Reporting Requirements
The US Treasury requires all US persons to report annually on foreign accounts. This includes individual residents or citizens of the United States as well as domestic legal entities like an estate, trust, Limited Liability Company (LLC,) Corporation or Partnership.
If, for any given foreign account, there are multiple account holders or those with an interest in the account, be they individuals or businesses, each of these entities must file a separate FBAR form for the same account.
Types of Accounts That Qualify as Foreign Accounts
Applicable foreign accounts include all foreign bank accounts and other kinds of financial accounts that are based outside of the US.
Classification as a foreign account includes accounts in any country outside the US as well as those based in Indian Lands as the Indian Gaming Regulatory Act defines, and certain US possessions and territories, as follows:
- American Samoa
- District of Columbia
- Northern Mariana Islands
- Puerto Rico
- Trust Territories of the Pacific Islands
- United States Virgin Islands
Among the types of bank and financial accounts you must report on a FBAR form annually are:
- Checking and savings accounts
- Mutual funds
- Brokerage and securities accounts
- Pension and retirement accounts
- Annuities and life insurance possessing cash value
- Accounts with debit cards or prepaid credit cards
When to Report Taxable Income on Overseas Accounts
If, at any point throughout a given calendar year, you have a total balance of at least $10,000 across all foreign bank accounts that you own or in which you have an interest, you are required to file a completed FBAR form annually for each of those accounts for as long as you own or have an interest in those foreign accounts.
You'll file this foreign account form separately from your regular income tax return, although the FBAR form and your regular income tax return can be interrelated.
What Information the Report Must Include
When you submit a FincCEN Form 114 to report on your foreign accounts, you must include details of each account, including the name of the bank or other financial institution where it's held and the account number and current balance at the time of reporting.
Exceptions to Foreign Account Reporting Requirements
If any foreign accounts are held in an Individual Retirement Account or tax-qualified retirement plan, you do not need to report on those accounts.
Spouses with shared ownership or interest in foreign accounts can sign a Form 114a, Record of Authorization to Electronically File FBARs, to prevent them from having to file two separate reports for each of those accounts
How to Get Help With Your Foreign Accounts
Information and E-filing Assistance From the Federal Government
One way to get your questions about the FBAR your overseas accounts answered is to contact the US Treasury directly. For callers within the US, you can reach their help desk line dedicated to foreign accounts toll free at 866-270-0733, or, if you're located outside the US, at 313-234-6146, which will be a toll call. This hotline is open from 8 am to 4:30 pm Eastern Time, Monday through Friday. You can also email your FBAR-related questions to FBARquestions@irs.gov.
For questions about electronic filing, you can call the BSA E-Filing Help Desk toll free for callers within the US at 866-346-9478. You can also email that office at BSAEFilingHelp@fincen.gov. This help desk is open between 8 am and 6 pm Eastern Time, Monday through Friday.
Personal Assistance From a Professional Tax Advisor
The other way to get the information you need, along with personal assistance applying that knowledge, is to seek out the aid of a professional tax advisor knowledgeable and experienced in dealing with foreign accounts.
Where to Find a Tax Advisor Charlotte Residents and Small Business Can Use For Their Overseas Accounts
To make sure you handle all your tax obligations right when you have overseas accounts, you need a licensed and properly trained tax accountant with experience in dealing with overseas assets. For an accountant Charlotte NC area residents and small business owners can count on to manage their overseas accounts, look no further than small business CPA Scott Boyar.
In addition to being an individual, family and small business tax advisor, Scott Boyar, CPA also offers bookkeeping services Charlotte area residents and small business owners can trust to keep the maximum of their income in their possession and pay the minimum in required taxes.
To reach Scott Boyar, bookkeeper, accountant, tax advisor Charlotte NC located, call 704-527-2725 or use the contact form at sboyarcpa.com/contactus.