FinCEN Form 114
Published on May 31, 2024
by Grace Lorraine Angeles
Grace Lorraine, an IRS Enrolled Agent and CPA with 13 years of expat tax experience, specializes in US tax preparation, tax planning, and tax advice for US citizens and Green Card holders living and working abroad.
Table of Contents
FinCEN Form 114 aka FBAR, what does it do?
FinCEN Form 114, also known as the FBAR (Foreign Bank Account Report), is a form that US citizens and green card holders must file if they own foreign financial accounts exceeding $10,000 at any point during the calendar year.
This includes joint accounts, business accounts, and accounts over which you have signing authority.
When are you required to file FinCEN 114?
If you are a US citizen or green card holder and the total value of your foreign financial accounts exceeds $10,000 at any time during the calendar year, you must file FinCEN Form 114. The form is available on the official Financial Crimes Enforcement Network website.
I want to know more about US taxes abroad
What is the difference between FinCEN 114 and FBAR?
There is no difference; FinCEN 114 is the official name of the form used to file an FBAR, which stands for Foreign Bank and Financial Accounts Report.
What types of accounts need to be reported on the FBAR?
Accounts that need to be reported include bank accounts, securities accounts, and other financial accounts outside the US if the total value exceeds $10,000 during the calendar year.
Consulting a tax professional experienced in expatriate tax matters is advisable to ensure you meet your reporting requirements.
When is the FBAR due?
The FBAR is due annually by April 15, with an automatic extension to October 15 if needed. No request for an extension is required.
How do you file FinCEN Form 114?
To file FinCEN Form 114, use the BSA E-Filing System online here.
What happens if you don’t file the FBAR?
Failing to file the FBAR when required can result in significant penalties. Non-willful violations can incur a penalty of up to $10,000 (subject to inflation) per violation, while willful violations can lead to a penalty of $100,000 (subject to inflation) or 50% of the account balances, whichever is greater.
Negligent violations by financial institutions and non-financial trades or businesses can also result in penalties.
Is there a way to catch up on unfiled FBARs if you weren’t aware of the requirement?
Yes, the IRS provides options such as the Delinquent FBAR Submission Procedures and the IRS Streamlined Procedure. These programs allow taxpayers to file late FBARs without penalty if they report all taxable income associated with those accounts.
Do you need to report accounts on the FBAR if you only have signing authority and no financial interest in the account?
Yes, individuals with signing authority over but no financial interest in foreign financial accounts are still required to report these accounts on the FBAR to ensure compliance with the Bank Secrecy Act.
Are there exceptions to the FBAR filing requirement?
Yes, there are exceptions. Certain accounts are exempt from reporting, such as those owned by a governmental entity or an international financial institution.
Participants in certain retirement plans might not have to report their interests in the plan. Beneficiaries of trusts who don’t control the trust’s assets may also be exempt under specific conditions.
Consulting a tax professional is advisable to understand if your situation qualifies for an exemption. By ensuring you understand and comply with the FBAR requirements, you can avoid significant penalties and ensure your foreign financial accounts are properly reported.
