Fincen Form 114
Published on March 26, 2024
by Jeff Patterson
Jeff Patterson is an American living in Scotland and joined the team at Expat Tax Online after experiencing the complexities of living abroad with a family.
Table of Contents
What does FinCEN Form 114 do?
FinCEN Form 114, known as the FBAR, (Foreign Bank Account Report) is a report that US citizens and green card holders must file if they own foreign financial accounts exceeding US$10,000 at any point during the calendar year; this includes joint accounts, business accounts, and accounts with signing authority.
It isn’t just accounts that have held more than $10,000 during the year, you have to add together the highest balances from all your non-US accounts, and if that total number is over $10,000 at any point during the year, then you need to report all your accounts, even those with a low or zero balance.
When am I required to file FinCEN 114?
FinCEN Form 114 mandates that all US citizens or green card holders, including expats, report their aggregate value of foreign financial accounts that exceeds US$10,000 at any time during the calendar year.
This form can be found on the official Financial Crimes Enforcement Network website.
What is the difference between FinCEN 114 and FBAR?
FinCEN 114 and FBAR are essentially the same; 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 are reportable on the FBAR?
Accounts that need reporting include bank accounts, securities accounts, and other financial accounts located outside the US if the total value exceeds US$10,000 at any time during the calendar year.
It’s advisable to seek advice from a tax professional highly experienced in dealing with expatriate tax matters. They can ensure that you meet your reporting requirements, as well as provide strategies tailored to your specific situation.
When is the FBAR due?
The FBAR is due annually by April 15, with an automatic extension to October 15 if needed.
You don’t need to request an extension to file the FBAR.
What if I’m way behind on my U.S. tax returns?
There is a special IRS program to help you catch up on your U.S. taxes safely, without fines and penalties
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How do I file FinCEN Form 114?
For filing FinCEN Form 114, individuals need to use the BSA E-Filing System online.
What happens if I don’t file the FBAR?
If you don’t file the FBAR when required, you could face severe penalties, including monetary fines.
The penalties can vary, such as:
- Non-willful violations can incur a penalty of up to US$10,000 (subject to inflation) per violation.
- Willful violations might lead to a penalty of US$100,000 (subject to inflation) or 50% of the account balances; the greater amount is enforced.
- Negligent violations by financial institutions and non-financial trades or businesses could see penalties imposed.
Is there a way to catch up on unfiled FBARs if I wasn’t aware of the requirement?
For individuals who were unaware of the FBAR filing requirement and need to catch up on unfiled FBARs, the IRS provides options such as the Delinquent FBAR Submission Procedures and the IRS Streamlined Procedure. This allows taxpayers to file late FBARs without penalty if they report all taxable income associated with those accounts.
Do I need to report accounts on the FBAR if I 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. This ensures full compliance with the Bank Secrecy Act, which aims to prevent financial crimes.
Are there exceptions to the FBAR filing requirement?
Yes, there are exceptions to the FBAR filing requirement.
Certain accounts are exempt from reporting, such as accounts owned by a governmental entity or an international financial institution. Additionally, participants in certain retirement plans might not have to report their interests in the plan.
Beneficiaries of trusts who don’t have any control over the trust’s assets may also be exempt under specific conditions. However, it’s important to consult a tax professional to understand if your specific situation qualifies for an exemption, as these rules can be complex and are subject to change.
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