How to Process Your Own FBAR: A Step-by-Step Guide

by Daria Vovk
Oct 1, 2024

If you are a U.S. citizen or resident and you have foreign financial accounts, you may need to file the Foreign Bank Account Report (FBAR) annually. The FBAR is filed with the Financial Crimes Enforcement Network (FinCEN) and is essential for reporting foreign bank accounts to the U.S. government. Here’s a comprehensive guide on how to process your own FBAR.

If you have any questions or concerns regarding the following overview please contact the team at USGLOBALTAX.com:

Shalen in Australia at [email protected]

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Or me personally at [email protected], or sms +64 2 1 9 3 7 5 2 9

The team at US Global Tax file thousands of FBARs every year and are more than happy to assist you in the process. The cost to you is very minimal.

Understanding FBAR Requirements

Before initiating the FBAR process, it’s critical to understand who must file:

  1. Who Must File: If you have a financial interest in, or signature authority over, at least one foreign bank account and the aggregate value of all foreign accounts exceeds $10,000 at any time during the calendar year, you are required to file an FBAR.
  2. Deadlines: FBARs are due by April 15th of the following year, with an automatic extension to October 15th.

Step 1: Gather Your Information

Before you can fill out your FBAR, you will need to gather the necessary information regarding your foreign accounts:

  • Account Information: Collect statements or documents that show:
    • The name and address of your foreign bank or financial institution
    • The account number or equivalent
    • The type of account (checking, savings, etc.)
    • Maximum value of the account during the reporting period
  • Personal Information: Ensure you have your own identifying details, including your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

Step 2: Access the FinCEN Report 114

FBARs are filed electronically through the FinCEN’s BSA E-Filing System. Follow these steps:

  1. Create an Account: Visit the BSA E-Filing System and create an account if you don’t have one. The registration process is straightforward, and you’ll receive a username and temporary password.
  2. Log In: Once your account is set up, log in to the system.
  3. Select FBAR Form: Locate the FBAR filing link (FinCEN Form 114). The form is user-friendly and will guide you through the required fields.

Step 3: Fill Out the FBAR Form

Complete the necessary fields on the FBAR:

  • Filer Information: Input your personal details including name, SSN, address, and contact information.
  • Account Information: Enter details for each foreign account you are reporting. You can add multiple accounts within the same filing.
  • Financial Institution Information: Provide the name and address of each foreign bank or financial institution.
  • Maximum Value of Accounts: Report the highest balance for each account during the year.

Step 4: Review and Submit

Before submission, carefully review all the information you’ve entered for accuracy:

  1. Double-Check Entries: Ensure names, account numbers, and financial institution information are correct.
  2. Review Value Threshold: Ensure the aggregate total of all foreign accounts exceeds $10,000 before proceeding.
  3. Submit the Form: Once you are confident everything is correct, submit the form electronically through the BSA E-Filing System.

Step 5: Confirmation and Record Keeping

After submitting, you will receive confirmation of your FBAR filing:

  1. Save Confirmation: Keep a copy of the confirmation for your records. This is essential in case of future audits or inquiries.
  2. Maintain Documentation: Retain all supporting documents related to the foreign accounts for at least five years, as the IRS may request this information.

Additional Tips

  • Consider Getting Help: If you have complex financial situations or numerous accounts, consider consulting a tax professional or accountant with experience in FBAR filings.
  • Stay Updated: Tax laws and regulations may change. Always verify the latest requirements regarding FBAR filings on the FinCEN website.

Conclusion

Filing your own FBAR can be a manageable task if you are organized and understand the requirements. By carefully gathering the necessary information, completing the form online, and keeping records, you can fulfill your legal obligations while avoiding potential penalties. Remember, failure to file an FBAR when required can lead to significant penalties, so take this responsibility seriously.