What Is an FBAR and Who Has to File One?

What Is an FBAR and Who Has to File One?

An FBAR is the Report of Foreign Bank and Financial Accounts, filed on FinCEN Form 114. A US person must file one for any calendar year in which the combined value of their foreign financial accounts exceeded $10,000 at any point, even for a single day. It is not a tax return, it is not filed with your tax return, and it is required whether or not you owe any tax.

That last part is what catches people. The FBAR exists under the Bank Secrecy Act, at 31 U.S.C. section 5314 and 31 CFR section 1010.350, and its purpose is disclosure rather than revenue. You can have a zero tax liability, a fully reported income picture, and still have an FBAR obligation with real penalties attached to missing it.

Who Has to File an FBAR

A US person means a US citizen, a US resident, and also domestic entities: corporations, partnerships, LLCs, trusts, and estates. Being abroad does not exempt you, and neither does the account being small on its own.

You have to file if you had either of the following during the year:

• A financial interest in one or more foreign financial accounts, meaning you are the owner of record or holder of legal title, including through certain entities you control.
• Signature authority over a foreign financial account, meaning you can control the disposition of assets in it, even if none of the money is yours.

Signature authority is the requirement people miss most often. An employee who can sign on a foreign subsidiary's bank account, or a family member added to a parent's overseas account, may have a personal filing obligation over money they do not own and never touch.

The $10,000 Threshold Is Aggregate, Not Per Account

The most frequent misreading of the rule is treating $10,000 as a per-account test. It is not. You add up the maximum value of every foreign account during the year, and if the combined figure exceeds $10,000 at any point, you report all of them.

Here is the arithmetic in practice. You hold three foreign accounts with peak balances of $4,000, $5,000, and $2,000. No single account crosses $10,000. The combined maximum is $11,000, so you file, and you report all three accounts, including the $2,000 one.

The value is the maximum during the calendar year, not the year-end balance, converted to US dollars using the Treasury year-end exchange rate. A balance that spiked because a property sale passed through the account for a week still counts.

What Counts as a Foreign Financial Account

Generally: bank accounts, savings and checking accounts, securities and brokerage accounts, mutual funds, and certain foreign pensions and insurance products with a cash surrender value, held at an institution located outside the United States.

Generally not: foreign real estate you hold directly, foreign stock or securities held in a US brokerage account, and precious metals you hold yourself rather than in an account.

Virtual currency sits in an unresolved place. FinCEN Notice 2020-2 stated that the FBAR regulations do not currently define a foreign account holding only virtual currency as a reportable account, while announcing FinCEN's intention to propose amending the rules to include it. Those amendments have not been finalized. Note the word "only" in that notice: a foreign exchange account that also holds fiat currency or securities can be reportable on that basis, which is why many advisers treat this area conservatively.

FBAR Versus Form 8938: Two Filings, Not One

People often assume disclosing foreign accounts once covers it. There are two separate regimes, they are administered by different agencies, and both can apply to the same account in the same year.

	FBAR (FinCEN Form 114)	Form 8938 (FATCA)
Filed with	FinCEN, electronically via BSA E-Filing	The IRS, attached to your tax return
Authority	Bank Secrecy Act, 31 U.S.C. 5314	IRC section 6038D
Threshold	Over $10,000 aggregate at any time	Starts at $50,000 for a single filer living in the US at year end, or over $75,000 at any time, with higher thresholds for joint filers and for taxpayers living abroad
Who files	US persons including entities	Specified individuals and certain entities filing a return
Covers	Foreign financial accounts	A broader set of specified foreign financial assets

Filing one does not satisfy the other. If both apply, you file both, and the same account appears on each.

Deadline and Extension

The FBAR is due April 15, aligned with the individual income tax filing date, with an automatic extension to October 15. You do not have to request the extension, which is unusual and worth knowing, because the October date is often the practical deadline for people gathering statements from overseas institutions.

Filing is electronic through FinCEN's BSA E-Filing System. There is no paper option for individuals in normal circumstances, and a spouse filing on a joint FBAR requires an authorization form.

Penalties, and Why the Structure Matters

Penalties fall into two tiers, both adjusted for inflation. A non-willful failure carries a civil penalty ceiling per violation, and a willful failure carries a substantially higher one, calculated as the greater of a statutory floor or 50 percent of the account balance at the time of the violation. Willful cases can also carry criminal exposure.

One clarification is worth knowing because it changed the math considerably. In Bittner v. United States (2023), the Supreme Court held that the non-willful penalty applies per annual report rather than per unreported account. For someone with a dozen unreported accounts over several years, that is the difference between a manageable number and a ruinous one.

If you have missed filings, there are established correction paths, including delinquent filing procedures for taxpayers who have no unreported income and a reasonable explanation, and broader disclosure programs for more complicated situations. Which path fits depends heavily on the specific facts and on whether the failure was willful, and that is a determination worth making with a professional before you file anything.

The Practical Takeaway

The FBAR is a low-effort filing with high-consequence penalties, which is an unusual and unforgiving combination. Three habits handle almost all of it: keep a list of every foreign account you own or can sign on, record each account's peak balance for the year rather than only the closing balance, and add up the total before assuming you are under the threshold.

If your situation involves a foreign entity, signature authority through a job, an inherited account, or a foreign exchange holding both crypto and fiat, that is the point to get advice rather than to guess. You can compare accountants by specialty and verified client reviews in the Sam's List directory, and confirm credentials and fit before engaging anyone.

Frequently Asked Questions

Do I have to file an FBAR if I owe no tax? Yes. The FBAR is an information report filed with FinCEN under the Bank Secrecy Act, not a tax form, and it is required whenever the aggregate maximum value of your foreign financial accounts exceeded $10,000 at any point in the calendar year. Your tax liability, or lack of one, does not affect the obligation.

Is the $10,000 FBAR threshold per account or total? Total. You combine the maximum value of every foreign account during the year, and if the aggregate exceeds $10,000 at any point, you report all accounts, including small ones. Three accounts peaking at $4,000, $5,000, and $2,000 exceed the threshold together, so all three are reported.

Do I need to report foreign crypto accounts on an FBAR? FinCEN Notice 2020-2 said the current regulations do not define an account holding only virtual currency as reportable, while stating FinCEN's intent to propose adding it, and those amendments have not been finalized. An account that also holds fiat currency or securities can be reportable on that basis, so many advisers treat these accounts conservatively. Confirm your specific facts with a professional.

What happens if I have not filed FBARs for past years? There are established correction paths, including delinquent FBAR submission procedures for taxpayers with no unreported income and a reasonable explanation, and broader disclosure programs for more complex or willful situations. Because the penalty tiers and the choice of path depend on the specific facts, this is a situation to review with a tax professional before filing anything.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.