Learn about FBAR and FATCA, which must be filed with tax authorities in the United States. Please note that failure to file an FBAR may result in severe fines.
What are FBAR and FATCA?
FBAR and FATCA are laws related to reporting non-US financial accounts and assets in the United States.
FBAR (Foreign Bank Account Report)
FBAR is a report that US citizens, green card holders, and US tax residents must file if their non-US financial accounts (banks, securities, insurance, etc.) total $10,000 or more at any time during the calendar year. This report is filed with the Financial Crimes Enforcement Network (FinCEN) in the United States.
FATCA (Foreign Account Tax Compliance Act）
FATCA is a law that allows US taxpayers to report non-US financial accounts to the Internal Revenue Service (IRS). FATCA is intended to help US taxpayers know how much assets they own outside the United States and prevent them from escaping overseas earnings.
Who should submit?
FBAR: Any individual who is a US citizen, green card holder, or US resident and has financial accounts outside the US totaling $10,000 or more must file an FBAR. Accounts with signing authority are also eligible.
FATCA: FATCA applies to US citizens, US green card holders, or US taxpayers residing in the US who have financial accounts outside the US. The amount threshold you must report varies depending on the form of filing and where you live, as follows.
・Single/Married Filing Separately living in the US:
Year-end balance of $50,000 or more, or annual maximum balance of $75,000 or more
・Married Fling Jointly living in the US:
Year-end balance of $100,000 or more, or annual maximum balance of $150,000 or more
・Single/Married Filing Separately living outside the US:
Year-end balance of $200,000 or more, or annual maximum balance of $300,000 or more
・Married Fling Jointly living outside the US:
$400,000 or more at the end of the year or a maximum annual balance of $600,000 or more
When should you submit it?
FBAR and FATCA are different reports with different filing deadlines.
FBAR Submission Deadline：
FBAR submissions are due by April 15th of the calendar year following the reporting year. However, applicants who do not arrive in time will be granted an automatic six-month extension without being required to submit any documentation, so they can actually submit by October 15th.
Please note that if you are required to submit an FBAR and fail to do so, you may be subject to penalties not exceeding $10,000 per violation. Many people file retroactively without knowing their FBAR filing obligations. If the IRS initiates an audit, it will be harder to avoid fines, so it’s important to file early before you’re subject to an audit. It’s important to make sure you file the proper FBARs and understand and protect your tax obligations to avoid penalties.
FATCA Submission Deadline：
FATCA is submitted as an attachment to the US tax return “Form 1040”. Therefore, the filing deadline for FATCA is the same as the filing deadline for the US tax return, Form 1040. In general, the deadline for filing returns with the United States Internal Revenue Service (IRS) is April 15 of the year following the reporting calendar year. If you apply for an extension, the deadline is October 15th.
Summary
FBAR and FATCA are documents that report if a US resident under US tax law holds a certain amount or more of non-U.S. financial assets or if they have prominent authority.
Please note that failure to properly submit an FBAR may result in penalties.
FBARs are due by October 15th of the calendar year following the reporting year. FATCA will file with a Form 1040, and if you request an extension, it will be due by October 15th of the calendar year following the reporting year.
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