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Foreign account housekeeping: File FBAR by June 30

Tax filing is a little bit like homework, in that it involves turning in information that meets certain requirements.

To be sure, the IRS does not exactly give you a letter grade on what you turn in (or fail to turn in). But an audit, or even worse a criminal investigation, can carry consequences more significant than the usual report card.

For most taxpayers, there is one main assignment: filing personal income taxes. The due date for this is typically in mid-April, unless you get an extension or are eligible for a later date for some other reason.

If you have foreign accounts that meet certain criteria, however, there is also a second key assignment, with a different due date. This second assignment is to file FinCEN Form 114. This form is also known as the FBAR, for Report of Foreign Bank and Financial Accounts.

The due date for FBAR filing is June 30, which is only a little more than two weeks away.

It's easy to overlook this requirement for a couple of reasons. For one thing, when you filed your income taxes, you had to indicate on your 1040 whether or not you have foreign accounts. But providing this information on your income tax return does not meet the separate requirement to file an FBAR.

Many people know that offshore accounts with an aggregate value of $10,000 of more at any point during the year must be reported. But another reason why the FBAR can trip people up is that it includes other accounts besides bank accounts that you open abroad.

The FBAR requirement can also extend to:

  • Assets that you inherit
  • Joint accounts that you manage for relatives who live overseas
  • Insurance policies with foreign insurers
  • Retirement accounts

In short, if you have foreign assets, you still may have a bit of homework to do before June 30.

 

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