FBAR Filing: Who Must Report Foreign Accounts and How

You may need to file an FBAR if your foreign financial accounts held more than $10,000 combined at any point during the year. That’s across your accounts—not $10,000 in each—and the requirement applies even if you owe no U.S. tax.

Here at Bright!Tax, we see how easily this gets overlooked. You’ve filed your tax return, so you assume you’re done. But FBAR filing is separate, and it can cover more than your current account. Investments, certain pensions and even an employer’s account you’re authorised to sign for may need reporting.

The first step is figuring out which accounts count. You might have more to report than you think.

Who needs to file an FBAR? 

FBAR stands for Report of Foreign Bank and Financial Accounts. Filing requirements apply to U.S. persons—a broader category than just Americans living abroad.

This includes:

• U.S. citizens, wherever they live
• U.S. residents, including green card holders and people who meet the substantial presence test
• U.S.-formed entities, including corporations, partnerships, LLCs, trusts and estates

You must file if you have a financial interest in, or signature or other authority over, reportable foreign financial accounts whose aggregate value exceeds $10,000 during the calendar year. Specific exemptions exist, but moving abroad does not remove a U.S. citizen’s filing obligation.

How does the $10,000 rule actually work?

The $10,000 threshold applies across your reportable foreign accounts, not to each account individually. You don’t need one large account to have an FBAR obligation.

For example, three accounts holding $3,500 each bring your total to $10,500. If you’re a U.S. person with no applicable exemption, you must file—and report all three.

Year-end balances don’t tell the whole story. You need to establish each account’s maximum value during the year, convert it into U.S. dollars using the December 31 exchange rate, and assess the aggregate threshold.

In practice:

• No single account needs to exceed $10,000.
• A brief increase above the threshold can trigger filing.
• Exactly $10,000 does not exceed the threshold; $10,000.01 does.
• Transfers between your own foreign accounts should not cause the same funds to be counted twice when determining whether you exceeded the threshold.

This is often referred to as the “high-water mark” rule. It means if your total account value briefly hits the reporting threshold (i.e, $10,001 or more), even for a single day, you still have an FBAR obligation, even if the balance drops again immediately after. 

What counts as a foreign financial account? 

FBAR covers more than checking and savings accounts. It looks at your financial interest in an account or your authority to direct the financial institution to move its assets—even if the money isn’t yours.

Reportable foreign accounts can include:

• Bank accounts
• Brokerage and securities accounts
• Publicly available mutual funds and similar pooled funds with regular valuations and redemptions
• Certain foreign retirement accounts
• Insurance and annuity policies with cash value
• Employer or other accounts over which you have signature authority, subject to specific exemptions

Not every investment belongs on an FBAR. Directly held shares are different from a brokerage account, and foreign private-equity or hedge-fund interests are not automatically reportable.

Foreign pensions also need a closer look. Individual accounts such as Canadian RRSPs are reportable, while an entitlement to government social-security benefits is not itself a financial account.

For cryptocurrency, the distinction is important: a foreign account holding only virtual currency is not currently reportable. If it also holds cash, securities or other reportable assets, the account can fall within the FBAR rules.

Simply being able to view an account does not create signature authority. The relevant authority is the ability to control the disposition of its assets through direct communication with the financial institution.

How do you actually file the FBAR?

You do not file the FBAR with your tax return. Instead, it is submitted electronically through the BSA E-filing system, which is run by FinCEN not the IRS. The form itself is called FinCEN Form 114.

You’ll typically file one FBAR per year, reporting all qualifying foreign accounts together in a single submission. 

To complete the filing, you’ll need to gather a few key details for each account:

1. The name and address of each foreign financial institution
2. The account number or other identifying designation
3. The maximum value of the account during the year

One detail that often requires a bit of extra attention is how account values are reported. FBAR requires everything to be listed in U.S. dollars, even if your accounts are held in another country. 

In practice, this means that you have to convert each account’s maximum value during the year to U.S. dollars using the U.S. Treasury Reporting Rates of Exchange for December 31 of the reporting year, when available.

How are joint accounts treated? 

If you jointly own a reportable foreign account, you include its full maximum value—not just your share.

So if you share an account with a non-U.S. spouse, don’t divide the balance in half for your FBAR. Your spouse’s lack of a U.S. filing obligation does not reduce the amount you report.

In practice:

• Include the account’s full value when assessing the threshold.
• Report its full annual maximum when filing.
• A joint owner who is not a U.S. person does not have an FBAR obligation simply because they share the account with you.

There is a limited exception when both spouses have filing obligations. One spouse can file for both if all the nonfiling spouse’s reportable accounts are jointly owned with the filing spouse, the accounts are reported on a timely FBAR, and both spouses complete and sign Form 114a.

Otherwise, each spouse files separately and reports the full value of the jointly owned accounts.

How is FBAR different from Form 8938?

FBAR and Form 8938 both involve foreign financial reporting, but filing one does not replace the other.

Requirement	FBAR	Form 8938
Main threshold	More than $10,000 across reportable foreign accounts	For qualifying unmarried taxpayers living abroad: more than $200,000 at year-end or $300,000 at any point
What it covers	Reportable foreign financial accounts	Specified foreign financial assets, including some assets held outside accounts
Where you file	FinCEN’s BSA E-Filing System	With your federal income tax return
Deadline	April 15, automatically extended to October 15	Your income tax return deadline, including extensions

Form 8938 thresholds vary with filing status and whether you qualify as living abroad. The FBAR threshold does not increase because you’re married or overseas.

What happens if you miss the FBAR deadline?

If you’ve missed an FBAR, don’t wait for a notice before addressing it. File the missing report through the BSA E-Filing System and explain why it’s late.

A late filing does not automatically mean you’ll face a penalty. For a non-willful violation, the law provides a reasonable-cause exception if you properly report the account balance. But an honest mistake alone does not establish reasonable cause—the circumstances matter.

If you also failed to report foreign income on your U.S. tax returns, the Streamlined Foreign Offshore Procedures offer eligible Americans abroad a way to catch up without specified penalties, including FBAR penalties. You must meet the programme’s non-residency requirements and certify that your failures resulted from non-willful conduct, such as negligence, a mistake or a good-faith misunderstanding of the rules.

A qualifying submission includes:

• Delinquent or amended tax returns, with required information returns, for the most recent three years whose filing deadlines—including properly obtained extensions—have passed
• Required delinquent FBARs for the most recent six years whose filing deadlines have passed
• Form 14653 certifying eligibility and explaining your non-willful conduct
• Payment of any tax and interest due

The right approach depends on what you missed. An unfiled FBAR with all income correctly reported is different from several years of unreported foreign income and accounts. Bright!Tax can help you identify the appropriate route before you submit.

How do you correct an FBAR? 

To correct a previously filed FBAR, submit a complete amended report through the BSA E-Filing System.

You’ll need to:

• Complete a new report with all the required account information
• Select the amendment option
• Provide the original report’s BSA identifier when available

Don’t submit only the account or figure you’re correcting. The amended report should include all the information required for that reporting year.

What records do you need to keep? 

Keep your supporting account records for five years from the FBAR due date.

For each reportable account, retain:

• The name on the account
• The account number or identifying designation
• The financial institution’s name and address
• The type of account
• Its maximum value during the reporting year

You don’t attach these records to your FBAR, but you must make them available if requested.

If you’re reporting only signature authority over your employer’s accounts, the employer must retain the records; you don’t have to keep them personally.

Staying compliant with FBAR filing

Knowing which accounts count is often the hardest part of FBAR filing. Once you’ve established that, you can gather the balances and account details needed to report them correctly.

If you’re unsure about a joint account, pension or previous missed filing, Bright!Tax can help you work through the requirements and handle your FBAR alongside your U.S. tax return.

Get help with your FBAR filing.

Frequently Asked Questions (FAQs)