Question
Can anyone shed some light on the need to file an FBAR for foreign bank accounts? I didn’t know this existed (resisting your judgment on this would be greatly appreciated) and a friend recently mentioned that I should file one. However, when I looked into it I noticed this stipulation:
“Who Must File an FBAR: A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.”
Since I’ve never had $10,000+ in an account this means I don’t need to file, correct? I have the feeling some people file just to cover their butts in case they do exceed that amount but, at least with my current salary, I unfortunately don’t anticipate running that risk anytime soon. Thanks for any feedback!
Answers
These are the answers of some Facebook group members:
“It’s 10k in all accounts, in total. If you have 6k in one account and 5k in another, you have to file.”
“No need to file if accounts aggregate to less than $10,000 USD. It’s simply a reporting document intended to stop money laundering and is unrelated to the IRS.”
“Not just banks. If you contribute to a pension or retirement, you need to file as well as if you have access to foreign accounts even if your name is on the account. Parents that have children with a foreign bank account may need to file for them, and since they have access, they need to file for themselves as well.”
“One other thing: I’m pretty sure – too lazy to check, but you should – that you have to file the report if the aggregate balance in your foreign accounts has exceeded 10k at any time during the year. So if you make a big withdrawal on Dec. 30 to get the balance down to $9999, you’re not off the hook.”
“FBAR is a bit weird: The $10k limit is counted as the sum of the max amount of each account during the year, so if you have $5k in one account and then transfer it to another, then that counts as $5k + $5k = $10k, despite never actually having had $10k.
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