Quick answer: A U.S. person generally must file an FBAR if the aggregate value of foreign financial accounts in which that person has a financial interest or signature authority exceeds $10,000 during the calendar year. Specific exceptions can apply. File FinCEN Form 114 separately from an income-tax return.
This article is part of our guide to international and cross-border tax reporting.
A savings account retained after moving to Florida, an overseas brokerage account or signing authority over an employer’s foreign bank account can create a reporting obligation. Start with the account’s location, who owns or controls it, and its maximum annual value. Whether it earned taxable income does not determine whether an FBAR is required. See the IRS FBAR guidance.
Who counts as a U.S. person?
U.S. citizens, including citizens living abroad and minor children, can have FBAR obligations. U.S. residents and entities formed under U.S. law—including corporations, partnerships, LLCs, trusts and estates—also fall within the definition. Residency questions require the applicable residency tests; an address alone does not settle the issue.
An LLC is a legal form. Its income-tax classification does not decide its FBAR treatment. A single-member LLC disregarded for federal income tax can still have its own FBAR requirement, as can a grantor trust whose income is reported by another person. Evaluate the entity and each potentially reportable owner’s interest separately. See FinCEN’s U.S.-person definition.
See “Estate, Trust, and Gift-Tax Filing Coordination: What a CPA Handles” for more on Estate, Trust, and Gift-Tax Filing Coordination.
Identify foreign accounts by where they are maintained
The location of the branch maintaining the account matters. An account at a foreign branch of a U.S. bank can be reportable; an account at a U.S. branch of a foreign bank is not a foreign account for FBAR purposes. The bank’s nationality and the account’s currency do not replace that test. The IRS comparison of foreign-asset reporting requirements distinguishes these cases.
For FBAR purposes, U.S. territories and possessions, including Puerto Rico, are within the United States under the FinCEN definitions.
Review more than checking and savings accounts. Securities accounts, foreign mutual-fund accounts and certain cash-value insurance or annuity accounts can qualify. Ask for the actual account agreement and maintaining institution’s address when a financial platform’s branding leaves the location unclear.
If this raises questions about Foreign Bank Interest, “Foreign Bank Interest: Organizing U.S. Tax Reporting Records” addresses it directly.
Distinguish financial interest from signature authority
Financial interest includes ownership of record or legal title, even when funds benefit someone else, and accounts held through an agent or nominee. Indirect ownership rules include more than 50% of corporate voting power or share value, or more than 50% of partnership profits or capital. Trust rules separately address grantor ownership and beneficiaries with a present interest in more than 50% of assets or who receive more than 50% of current income.
Signature authority concerns an individual’s ability, alone or with another person, to direct disposition of account assets by communicating with the institution. View-only access or a job title does not by itself establish that authority. Review the FBAR regulation, including its account, ownership and signature-authority definitions.
An employee may therefore need to review an employer account even without owning its money. Specific exceptions and deadline relief exist for certain financial professionals; they are not a blanket employee exemption. Check the applicable notice and facts using the IRS filing guidance.
Calculate maximum values and apply the aggregate threshold
Under FinCEN’s maximum-value instructions, determine each account’s greatest value during the year in its account currency. Statements are usable if they fairly reflect that maximum. For investment accounts, consider the account’s assets, not just uninvested cash.
Convert each foreign-currency maximum using the Treasury exchange rate for the last day of the reporting year. If no Treasury rate is available, use a verifiable alternative and identify its source. This uses the annual maximum balance and a year-end conversion rate; it does not use only the year-end balance or automatically use the exchange rate on the peak-balance date. Report dollar amounts rounded up to the next whole dollar.
For example, three reportable accounts have maximum values, already converted to U.S. dollars, of $4,000, $5,000 and $2,000. Their aggregate maximum is $11,000. The threshold is exceeded even though no account individually exceeds $10,000. Include all three accounts. Exactly $10,000 does not exceed the threshold.
Joint accounts and the spouse exception
Each required joint owner generally reports the full maximum account value, without dividing it by ownership percentage. Two joint owners of an account with a $12,000 maximum generally each report $12,000 if each must file. See FinCEN’s joint-account instructions.
One spouse can avoid a separate FBAR only when all of that nonfiling spouse’s reportable accounts are jointly owned with the filing spouse, the filing spouse reports those accounts on a timely electronically signed FBAR, and both complete and sign Form 114a. Retain that authorization; do not send it with the FBAR. Filing a joint Form 1040 does not itself qualify the couple. See FinCEN’s spouse exception.
Document any other exception before leaving an account off the report. For example, qualified U.S. retirement plans and IRAs have specific participant or beneficiary exceptions; a foreign pension is not automatically exempt merely because it is a retirement arrangement. Consolidated entity reporting also has defined conditions. See the regulation’s special rules.
FBAR, Form 8938 and income reporting are separate
| Requirement | How it differs |
|---|---|
| FBAR / FinCEN Form 114 | Reports qualifying foreign financial accounts through FinCEN, separately from the income-tax return. |
| IRS Form 8938 | Attaches to the applicable income-tax return; has different thresholds and covers specified foreign financial assets, including some assets outside accounts. |
| Income-tax reporting | Separately determines reportable income, deductions and tax. Filing an account-information form does not calculate or pay that tax. |
A person may need both account-information filings. Test each independently using the IRS comparison. An FBAR obligation does not depend on having enough income to require an income-tax return.
Deadlines, authorization and records
The normal FBAR deadline is April 15 following the reporting calendar year, with an automatic extension to October 15 that requires no extension application. Check applicable calendar adjustments and special relief. For example, 2026 account activity is reported in 2027. See FinCEN’s due-date clarification.
When another person files for you, complete Form 114a. Keep the signed authorization and filing copy; the form is retained rather than submitted with the FBAR. Save the submission acknowledgment as well. Confirm who will prepare, review and actually transmit the report.
Maintain the account holder’s name, account number, institution name and address, account type and annual maximum value. Keep the supporting statements and exchange-rate work with the report. FinCEN’s recordkeeping guidance specifies the required account details.
Use a retention date at least five years after April 15 following the reported year. If filing after April 15, retain the records for five years from the filing date, consistent with the full FinCEN instructions. Keep records longer when another applicable obligation or an unresolved examination requires it.
Missing or incorrect prior reports
Identify affected years, omitted accounts, whether associated income was reported and any prior IRS contact. A late filing does not automatically provide penalty relief. Where a compliance procedure may apply, verify its current requirements before selecting it; material omissions or possible willful conduct warrant prompt advice from qualified counsel. The IRS explains late-filing considerations and representation.
For a late report, follow FinCEN’s instructions for stating the reason. To correct a previously filed FBAR through the individual filing system, complete a new report, select amendment and provide the prior BSA identifier when known, following the amendment instructions. Correcting an FBAR does not automatically correct an income-tax return or Form 8938.
Prepare for an account review
Bring full-year account records, ownership documents, signing-authority agreements, prior FBAR acknowledgments and relevant income-tax returns. Note accounts opened or closed during the year and changes in owners or authorized signers. Contact CPA Firm South Florida to confirm the forms, years and work covered by a proposed engagement before assigning preparation or filing responsibility.
Frequently asked questions
Does each account have to exceed $10,000?
No. Apply the threshold to the aggregate maximum values of the reportable foreign accounts. Once the threshold is exceeded, include all reportable accounts, including smaller accounts.
Does a joint income-tax return replace separate FBARs?
No. The spouse exception has its own requirements: all accounts the nonfiling spouse must report must be jointly owned with the filing spouse, the reporting spouse must file and electronically sign on time, and both must complete and sign Form 114a.
Can a disregarded LLC have its own FBAR obligation?
Yes. Disregarded treatment for federal income tax does not remove an otherwise applicable FBAR filing requirement. Evaluate the entity and its owners separately.
Foreign-Owned U.S. LLCs is covered in more depth in our related article, “Foreign-Owned U.S. LLCs: An Overview of Federal Filing Obligations.”
Does filing an FBAR also satisfy Form 8938?
No. Test each filing requirement separately. Form 8938 has different thresholds and covers certain foreign assets beyond financial accounts.