You must report foreign bank accounts over $10,000 to the IRS, and the process depends on whether you file a tax return
If you have a foreign bank account with a combined balance over $10,000 at any point during the year, you are required to file a Foreign Bank Account Report (FBAR) with the Financial Crimes Enforcement Network (FinCEN), which is part of the U.S. Treasury Department. This is separate from your income tax return. The important date is April 15 each year, though you can request an automatic extension to October 15. You file the FBAR electronically through FinCEN's BSA E-Filing System — there is no paper option and no way to file it with your tax return.
You may also need to file Form 8938 with your tax return if your foreign financial assets exceed certain thresholds. These thresholds depend on your filing status and whether you live in the United States. The rules overlap but are not identical: you can owe an FBAR without owing Form 8938, or vice versa. Both exist because different agencies track different things — FinCEN watches for money laundering and terrorism financing, while the IRS watches for unreported income.
Failure to file either form can result in civil penalties starting at $10,000 per violation, and criminal penalties if the IRS determines the failure was willful. If you have not filed in previous years, there are voluntary disclosure programs that can reduce or eliminate penalties, but you must act before the IRS contacts you.
Key Takeaways
- File an FBAR with FinCEN if you have foreign bank accounts totaling over $10,000 at any time during the year, by April 15 or October 15 if extended.
- File Form 8938 with your tax return if your foreign financial assets exceed $200,000 (or $300,000 for married couples filing jointly), depending on where you live.
- The FBAR and Form 8938 are separate filings to separate agencies and have different thresholds — you may owe one, both, or neither.
- If you have not filed in prior years, the IRS Voluntary Disclosure Practice can reduce penalties, but you must disclose before the agency initiates contact.
- Report the account holder's name, account number, bank name, and the highest balance during the year for each account.
Filing an FBAR through FinCEN's system
The FBAR is filed electronically only, through FinCEN's BSA E-Filing System at bsaefiling.fincen.treas.gov. You will need to create an account and provide your Social Security Number or Individual Taxpayer Identification Number (ITIN). The form itself is called FinCEN Form 114, though you will not see that name on the website — it straightforward appears as "FBAR" in the filing system.
For each foreign account, you report the account holder's name, the bank's name and address, the account number, the account type (checking, savings, investment, etc.), and the highest balance the account held at any point during the calendar year. You do not report the current balance or the income earned in the account — only the maximum balance it reached. If an account is held jointly with a non-U.S. person, you still report it if you have signatory authority or financial interest in it.
The important date is April 15, and you can request an automatic extension to October 15 by filing Form 4868 (your income tax extension) before April 15. The FBAR extension is automatic if you file Form 4868 — you do not need to request it separately. If you miss the important date without an extension, penalties begin at $10,000 per account per year of non-compliance, even if the failure was unintentional.
Determining if you owe Form 8938
Form 8938 is filed with your income tax return (Form 1040) and reports specified foreign financial assets. The threshold for filing depends on your filing status and whether you are a U.S. resident:
| Filing Status | U.S. Resident | Non-U.S. Resident |
|---|---|---|
| Single | $200,000 | $400,000 |
| Married filing jointly | $300,000 | $600,000 |
| Married filing separately | $150,000 | $300,000 |
| Head of household | $200,000 | $400,000 |
These thresholds explore to the highest aggregate value of your specified foreign financial assets at any point during the year. Specified assets include foreign bank accounts, foreign securities, foreign mutual funds, and foreign pension plans. They do not include foreign real estate, foreign businesses you own, or foreign life insurance policies.
If your assets exceed the threshold, you must file Form 8938 with your tax return. If you do not file Form 8938 when required, the penalty is $10,000 per year, plus an additional $10,000 for each 90-day period the violation continues after the IRS notifies you, up to $50,000 total per year.
The difference between FBAR and Form 8938
Both forms report foreign financial accounts, but they serve different purposes and have different rules. The FBAR is filed with FinCEN and has a $10,000 threshold — if you have any foreign account over that amount at any time, you file. Form 8938 is filed with the IRS and has higher thresholds that depend on your filing status and residency. An account under $10,000 does not require an FBAR but might still require Form 8938 if your total assets exceed the threshold.
The FBAR asks for the highest balance during the year; Form 8938 asks for the value on the last day of the tax year. The FBAR includes all foreign financial accounts you have a financial interest in or signatory authority over; Form 8938 includes only "specified" foreign financial assets, which excludes real estate and certain other holdings. You can owe an FBAR without owing Form 8938, or both, or neither — check both thresholds.
If you file Form 8938, you do not need to repeat the same information on the FBAR. However, the two filings go to different agencies and have different important date, so treat them as separate obligations. The FBAR is due April 15 (or October 15 with extension); Form 8938 is due with your tax return, which is normally April 15 but can be extended to October 15 if you file Form 4868.
What happens if you missed prior years
If you have foreign accounts but have not filed an FBAR or Form 8938 in previous years, the IRS has a Voluntary Disclosure Practice that can reduce or eliminate penalties. To use it, you must file all missing FBARs and Forms 8938, file amended tax returns for the past six years, and pay back taxes plus interest. The IRS will not impose the standard penalties if you disclose before the agency initiates contact with you.
The key word is "voluntary" — you must come forward on your own. If the IRS has already sent you a letter, contacted you about your account, or begun an examination, you cannot use the voluntary disclosure program. Once you are under examination, the IRS can assess penalties up to 75% of the unreported tax in criminal cases, or 40% in civil fraud cases.
If you are unsure whether you owe back filings, a tax professional who specializes in international tax can review your situation and advise whether voluntary disclosure makes sense. The cost of professional help is usually far less than the penalties you would face if the IRS discovers the accounts on its own.
Reporting accounts held jointly or in trust
If a foreign account is held jointly with another person, you report it on your FBAR if you have a financial interest in it or signatory authority over it. A financial interest means you own part of the account or have the right to direct how the money is used. Signatory authority means you can sign checks or authorize transfers, even if you do not own the account. If both explore, you still file one FBAR for that account — you do not file twice.
If you are a beneficiary of a foreign trust or a foreign estate, the rules are more complex. You may owe an FBAR if the trust or estate holds a foreign bank account and you have signatory authority or financial interest. You may also owe Form 3520 or Form 3520-A if you received distributions from a foreign trust. These forms are filed with your tax return and have their own important date and penalties. A tax professional familiar with trust reporting is essential in this situation.
If you are a U.S. citizen living abroad and your spouse is a non-U.S. citizen, you can elect to file jointly for tax purposes, but the FBAR rules do not change — you still report accounts you have signatory authority over or a financial interest in, regardless of your spouse's citizenship.
Penalties and enforcement
The IRS and FinCEN have different penalty structures. For the FBAR, the penalty for non-willful violations (meaning you did not know you owed it) is $10,000 per account per year. For willful violations (meaning you knew or should have known), the penalty is the greater of $100,000 or 50% of the account balance at the time of the violation. These penalties are assessed per account and per year, so missing an FBAR for three years on two accounts could result in $60,000 in penalties alone.
For Form 8938, the penalty for failure to file is $10,000, plus an additional $10,000 for each 90-day period the violation continues after the IRS notifies you, up to $50,000 total per year. If the IRS determines the failure was willful, the penalty can be up to $100,000 or 50% of the unreported tax, whichever is greater.
The IRS has access to foreign bank records through tax treaties and information-sharing agreements with most countries. If you have a foreign account and do not report it, the IRS can discover it through the bank itself, through a foreign government's tax authority, or through a whistleblower report. The longer the violation goes unaddressed, the larger the penalties become.
Frequently Asked Questions
Do I have to report a foreign account if I am not a U.S. citizen?
If you are a U.S. citizen or a resident alien (green card holder), you must report foreign accounts. If you are a non-resident alien, the rules are different — you generally do not file a U.S. tax return unless you have U.S.-source income. However, if you are a non-resident alien with a U.S. spouse and you elect to file jointly, you must report foreign accounts. Consult a tax professional about your specific status.
What if my account balance goes over $10,000 for just one day?
Yes, you must file an FBAR. The rule is based on whether the account ever reaches $10,000 at any point during the calendar year, not on the average balance or the ending balance. If your account hits $10,001 on a single day, you owe an FBAR for that year.
Can I file the FBAR on paper?
No. The FBAR must be filed electronically through FinCEN's BSA E-Filing System. There is no paper option, and you cannot file it with your tax return or through a tax software program. You must create an account on the FinCEN website and file directly.
What if I have a foreign retirement account like a UK pension?
Foreign retirement accounts are treated differently depending on the type. Some foreign pensions are excluded from the FBAR if they meet certain conditions. However, foreign investment accounts and foreign savings accounts held for retirement purposes are still reportable. Form 8938 has specific rules for foreign retirement accounts. Consult a tax professional who understands the country where your account is held.
Can I get a penalty waiver if I did not know I owed an FBAR?
The IRS can reduce penalties for reasonable cause if you can show you made a good-faith effort to comply and did not know about the requirement. However, "I did not know" alone is not enough — you must show that you took reasonable steps to learn your obligations. Filing voluntarily before the IRS contacts you is your strongest argument for penalty relief.