For U.S. citizens and Green Card holders living abroad, reporting foreign financial accounts is not optional — it’s a legal requirement. FinCEN Form 114, commonly known as the FBAR (Foreign Bank Account Report), is used by the Internal Revenue Service to monitor overseas accounts and prevent tax evasion.
What Is FinCEN Form 114 / FBAR?
The FBAR is a reporting form for U.S. taxpayers with financial accounts outside the United States. It is required if the aggregate value of all foreign accounts exceeds $10,000 at any point during the calendar year.
Accounts that must be reported include:
- Foreign checking and savings accounts
- Foreign brokerage accounts
- Mutual funds held abroad
- Foreign retirement accounts (in some cases)
- Trusts and custodial accounts with foreign institutions
Who Must File an FBAR?
- U.S. citizens
- U.S. permanent residents (Green Card holders)
- Entities, such as corporations, partnerships, trusts, and LLCs, created or organized in the U.S.
Even if you are living abroad and paying foreign taxes, the FBAR requirement applies.
Deadline and Filing Requirements
- The FBAR is due annually by April 15, with an automatic extension to October 15.
- It is filed electronically through the FinCEN BSA E-Filing System.
- It is not submitted with your federal tax return.
Why FBAR Matters for Expats
Failing to file or incorrectly reporting foreign accounts can result in significant penalties:
- Non-willful violation: Up to $12,921 per violation (2025 figure, adjusted annually)
- Willful violation: Greater of $129,210 or 50% of the account balance per violation
Even small mistakes can trigger audits, fines, or legal issues.
Real-World Expat Example
Sarah, a U.S. citizen living in London, has three bank accounts with balances of:
- £5,000 (~$6,500)
- £4,000 (~$5,200)
- £2,000 (~$2,600)
The total exceeds $10,000 at some point during the year. She must file an FBAR, even though each account individually is below $10,000.
Tips for U.S. Expats Filing FBAR
- Aggregate all accounts: Don’t just look at one account — total balances matter.
- Track balances daily: Use statements or online banking to find the maximum balance each year.
- File on time: Late or missed FBAR filings can result in steep penalties.
- Work with an expat tax professional: They can ensure accurate reporting and prevent double reporting issues with the IRS and FinCEN.
FBAR vs. Form 8938
Some expats may confuse FBAR with Form 8938 (Statement of Specified Foreign Financial Assets):
- FBAR focuses on all foreign financial accounts over $10,000.
- Form 8938 applies to specific foreign assets if thresholds are met ($200,000+ for single filers abroad).
- Both forms may apply, but they are filed separately and have different penalties.
Bottom Line
For Americans living abroad, the FBAR is a critical compliance requirement. Even if your accounts are in your spouse’s name or you think your foreign taxes cover everything, the U.S. government expects you to report foreign accounts over $10,000.
Filing accurately and on time can avoid hefty penalties, protect your financial reputation, and keep your U.S. tax record in good standing.
