An FBAR submission may only be necessary for some Americans. However, you may be required to file if you own a foreign bank account or have a financial interest in an entity that does. You also need to be aware of the penalties for failing to file your FBAR.
The filing of an FBAR is not an easy task. Even if you understand the process and the instructions, you may be surprised at how daunting the process can be. Fortunately, there are FBAR filing services available that can help you with this process.
How Do I File FBAR?
There are a number of different types of foreign financial accounts that are subject to FBAR filing. These accounts include:
- Foreign bank accounts
- Foreign savings accounts
- Foreign mutual funds
- Foreign life insurance with cash surrender value, and many more.
In addition, there are some specific types of documents that you must keep to meet the FBAR filing requirements.
In order to meet the FBAR requirements, you must have a financial interest in an account that is “owner of record.” This means that the account is held in the name of another person, or that you have the authority to dispose of the account’s assets.
If your financial interest exceeds $10,000, you must complete and file FinCEN Form 114. This form is available through the FinCEN Resource Center website. Once you have completed and filed the form, you should keep a copy for your records.
The government can impose penalties if you have missed the FBAR filing deadline. These penalties are based on the guidelines set forth in the Internal Revenue Manual and examiners’ discretion. Some penalties can be as high as $13,481 per violation.
You should always file your FBAR electronically. You can do this through the BSA E-Filing System, which allows you to enter your calendar years and explain why you are late.