US citizens and residents must report their foreign financial accounts to the US government through FBAR (Foreign Bank Account Report) and FATCA (Foreign Account Tax Compliance Act) filings. Understanding these requirements is essential for staying compliant.
What is FBAR?
The FBAR is a report filed with FinCEN (Financial Crimes Enforcement Network) if you have:
- Financial interest in or signature authority over foreign financial accounts
- The aggregate value of all foreign accounts exceeded $10,000 at any time during the calendar year
What is FATCA?
FATCA requires US taxpayers to report specified foreign financial assets on Form 8938 if they exceed certain thresholds:
- For expats living abroad: $200,000 on the last day of the tax year or $300,000 at any time during the year (single filers)
- For expats living abroad: $400,000 on the last day or $600,000 at any time (married filing jointly)
Key Differences Between FBAR and FATCA
- Filing deadline: FBAR is due April 15 with automatic extension to October 15; FATCA Form 8938 is filed with your tax return
- Thresholds: FBAR has a $10,000 threshold; FATCA has higher thresholds depending on filing status
- Filing location: FBAR is filed with FinCEN; Form 8938 is filed with the IRS
Penalties for Non-Compliance
Failure to file can result in significant penalties:
- FBAR: Up to $10,000 per violation for non-willful failures; higher penalties for willful violations
- FATCA: $10,000 penalty for failure to file, with additional penalties for continued failure after IRS notice
How TaxYork Can Help
We help US expats determine their FBAR and FATCA obligations, prepare accurate filings, and address any past non-compliance through the appropriate IRS procedures.