What is an FBAR? This is a very widely used Google search term, and something which leaves many US expatriates scratching their heads.
FBAR is an acronym for ‘Foreign Bank Account Reporting’, with the actual form name to be FinCen114 (Report of Foreign Bank Accounts). An FBAR is required to be filed by any US citizen residing overseas, who has an interest (either by owning, or signature authority) in any financial account(s) with a combined highest balance of more than $10,000 in any one calendar year.
For example, if you had three accounts:
- A) Checking account, maximum value during the calendar year was $3,000
- B) Savings account, maximum value during the year was $4,000
- C) Kiwisaver, maximum value during the year was $8,000
In this case, the combined highest balance (on varying dates) was $15,000, meaning that an FBAR must be filed.
What defines a ‘financial account’ can be complex, and tricky.
It is important to note, that accounts held by a trust, business or even a super fund which you own or have a financial interest in, all need to be reported on the FBAR.
We strongly recommend anybody wishing to file an FBAR obtain professional assistance. The cost of getting things wrong is high, and worthy of this annual form being professionally prepared.
Call us today to learn more.