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Connect on LinkedInA foreign bank account is a bank account held at a financial institution located outside the United States. For U.S. expats, foreign bank accounts can include checking accounts, savings accounts, deposit accounts, and other financial accounts used for everyday living, work, business, or investment abroad.
Why it matters for U.S. expats
Foreign bank accounts can create U.S. tax and reporting requirements even when the account is ordinary, local, and used only for day-to-day expenses. Interest must be reported on the U.S. tax return, account values may need to be included on FBAR or Form 8938, and exchange rates may be needed to convert balances and income into U.S. dollars.
Common questions
1. Do U.S. expats have to report foreign bank accounts?
Yes, if the account meets FBAR, FATCA, or income tax reporting rules. The account may need to be reported even if it produced no income.
2. When does a foreign bank account trigger FBAR filing?
FBAR is required when a U.S. person has financial interest in or signature authority over foreign financial accounts and the combined value of those accounts exceeded $10,000 at any point during the calendar year.
3. Does a foreign bank account need to be reported on Form 8938?
Yes, if the account is a specified foreign financial asset and the taxpayer meets the Form 8938 filing threshold. For many expats living abroad, the threshold is higher than the FBAR threshold.
4. Is a foreign bank account taxable by the IRS?
The account itself is not taxed just because it exists. Interest, dividends, currency exchange gain, or other income connected to the account can be taxable.
5. Does a foreign bank account with no interest need to be reported?
Yes, if the account meets FBAR or Form 8938 reporting rules. Income is not required for the account to be reportable.
6. Is a foreign bank account at a U.S. bank branch abroad reportable?
Yes. A financial account held at a foreign branch of a U.S. financial institution can be reportable for FBAR.
7. Is an account at a U.S. branch of a foreign bank a foreign bank account?
No. For FBAR and Form 8938 purposes, an account held at a U.S. branch of a foreign bank is not treated as a foreign financial account.
8. Do joint foreign bank accounts need to be reported?
Yes. A U.S. person with a joint foreign bank account may need to report the full maximum account value for FBAR purposes if the aggregate threshold is met.
9. Do foreign business bank accounts need to be reported?
Yes, if the U.S. person has financial interest in or signature authority over the account. Foreign business accounts can also connect to other reporting forms when the business itself is reportable.
10. What records should U.S. expats keep for foreign bank accounts?
Keep account statements, account numbers, bank names and addresses, maximum yearly balances, interest statements, exchange-rate calculations, ownership details, and any records showing signature authority.
Related forms
- FinCEN Form 114: Report of Foreign Bank and Financial Accounts
- Form 8938: FATCA reporting for U.S. expats
- Form 1040: U.S. Individual Income Tax Return
- Schedule B: Interest and Ordinary Dividends
When to get help
Professional guidance is important when:
- Your foreign accounts exceeded $10,000 in aggregate during the year.
- You have accounts in more than one country or currency.
- You hold joint accounts with a spouse, parent, child, or business partner.
- You have foreign business, pension, brokerage, or savings accounts.
- You are unsure whether an account is foreign for FBAR or Form 8938 purposes.
- You missed a prior FBAR or FATCA filing.
- You need to report interest, exchange-rate gain, or foreign tax connected to the account.
Bright!Tax can review your foreign bank accounts, prepare FBAR and FATCA reporting, and make sure account income is reported correctly on your U.S. return. Get started with Bright!Tax.
Related Bright!Tax guides
Official sources
- IRS: Report of Foreign Bank and Financial Accounts
- IRS: Comparison of Form 8938 and FBAR requirements
- FinCEN: Report Foreign Bank and Financial Accounts
- IRS: About Schedule B
Reviewed by
Katelynn Minott, CPA & CEO
Last reviewed
July 2026