If you are a US citizen or resident or a US entity (corporation, partnership or trust) and are the owner of or have signature authority on any foreign bank or depository accounts whose aggregate balances altogether exceed $10,000 at any point during the prior year, you are required to report such ownership or signature authority on FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR)*.  Reportable accounts include checking, savings, securities, brokerage, investment, insurance (including life insurance), mutual fund and pension accounts; they are reportable to the United States Treasury Department on an annual basis using FinCEN Form 114 which is efiled using the BSA E-filing system.**  The filing deadline is April 15 of the following year with a six-month extension until October 15 available upon request.

All earnings from such accounts such as interest, dividends and capital gains are reportable on your individual income tax return (or entity tax return).  There is no tax due on an FBAR.  It is merely reporting to the US treasury that you own or have some control over foreign bank or depository accounts.

There are severe penalties for not reporting including a $10,000 civil penalty for non-willful filing and more draconian penalties for willful non-filing.  But be encouraged that we have not yet seen the US Treasury Department impose the $10,000 non-willful-filing penalty on delinquent FBARs if you are proactive and get them filed before they contact you.   We can help you with this.  If you retain us for help, we typically will need to help you file the past 6 years of delinquent FBARs.

If the balances in your foreign accounts are high enough, the accounts will also need to be reported on Form 8938, Statement of Specified Foreign Financial Assets, which is required to be filed with your US individual income tax return Form 1040.   Note that the assets reportable on Form 8938 also include foreign securities (these are not reportable on the FBAR), but, unlike on the FBAR, Form 8938 reporting does not include accounts over which you have signature authority only.  Please see our separate article titled, Do I also need to file Form 8938, Statement of Specified Foreign Financial Assets, in addition to the FBAR?

* For more specific instructions, go to: https://www.irs.gov/pub/irs-utl/irsfbarreferenceguide.pdf

** http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html