Foreign Bank/Financial Accounts & Federal Tax Return Due Date for American Citizens Living or Working Abroad
What If I Have Foreign Bank and Financial Accounts and I Am a U.S. Citizen?
According to the IRS, U.S. "persons" are required to complete and file a report (using Form TD F 90-22.1) of their foreign bank and financial accounts (FBARs) if:
- The U.S. "person" had a financial interest in or signature authority over at least 1 financial account located in a foreign country AND
- The total value of all foreign financial accounts exceeded over $10,000 at any time during the calendar year that the accounts are to be reported
What is a United States Person?
The individuals, organizations, and items that the IRS defines as U.S. "persons" are:
- U.S. citizens
- U.S. residents
- Entities (including, but not limited to, partnerships, corporations, or limited liability companies organized or created in the United States or under U.S. laws)
- Estates or trusts formed under U.S. laws
Why Should I File a Report on My Foreign Bank and Financial Accounts?
The IRS requires you to file a report on your foreign bank and financial accounts because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. Therefore, Form TD F 90-22.1 is a tool to help the U.S. government identify individuals who may be using foreign financial accounts to circumvent U.S. laws. FBARs are used by investigators to help identify or trace fund used for illicit purposes or to identify unreported income generated or maintained overseas.
What Are the Exceptions for Not Filing a Foreign Bank and Financial Account Report?
In general, you do not have to file a Form TD F 90-22.1 if the assets are with a US military bank operated by an American financial institution or if combined funds in the account(s) are $10,000 or less during the entire Tax Year.
The following U.S. "persons" and foreign financial accounts that are exempt from the FBAR are:
- IRA owners and beneficiaries
- Participants in and beneficiaries of tax-qualified retirement plans
- Certain individuals with signature authority over but no financial interest in a foreign financial account
- U.S. "persons" included in a consolidated foreign bank and financial account report
- Foreign financial accounts owned by a government entity
- Foreign financial accounts owned by an international financial institution
- Correspondent/nostro accounts
- Foreign financial accounts maintained on a U.S. military banking facility
- Certain foreign financial accounts jointly owned by spouses
- Trust beneficiaries
Other exceptions to the FBAR reporting requirements can be found in the instructions of the Foreign Bank and Financial Account form. Use the instructions to determine whether you're eligible for an exception as well as to review the exception requirements.
How Should I File a Report on My Foreign Bank and Financial Accounts if I Am a U.S. Citizen?
To file a report on your foreign financial and bank accounts, complete and file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to the address shown on the form. As of July 1, 2013, the FBAR must be completed and filed electronically through the The Financial Crimes Enforcement Network's (FinCEN) BSA E-Filing System.
Be aware that Form TD F 90-22.1 is not a tax return, so don't attach the form to your 1040 Form. Form TD F 90-22.1 must be filed separately from your Form 1040 by June 30 each Tax Year.
Can I Receive an IRS Extension for Filing My Foreign Bank and Financial Account Report?
You cannot request an extension to file your FBAR. The extension you receive from the IRS only extends your due date to file your federal income tax return.
Can I Efile My Report on My Foreign Bank and Financial Accounts?
Absolutely! The FinCEN has developed an electronic filing system that will accept the FBAR form, since the FBAR must be completed and efiled. If you want a secure and fast way to file your FBAR, efiling is the way to go.
When you efile your Foreign Bank and Financial Account Report, you will receive an acknowledgement that it has been submitted. In fact, the FinCEN required U.S. taxpayers to efile most of their FBAR and other FinCEN reports by June 30 of each Tax Year.
How Should I Report Specified Foreign Financial Assets If I Am a U.S. Citizen?
If you own specified foreign financial assets, complete and file Form 8938, Statement of Specified Foreign Financial Assets, if the assets' total value exceeds an applicable threshold amount. This threshold varies based on whether you live in the U.S., are married, or file a joint tax return. Specified foreign financial assets include:
- Any financial account maintained by a foreign financial institution
- Any securities, stock, or other interest in a foreign entity and any financial tool or contract with a counterparty or issuer not from the United States (to the extent held for investment)
Please note that the 8938 filing requirement doesn't replace or affect a U.S. taxpayer's requirement to file a report of foreign bank and financial accounts.
What If I Received Income From Contributions I Made to A Foreign Trust or Received a Gift From Someone in a Foreign Country?
If you received income from contributions made to a foreign trust or received a gift from a foreign individual, you may also have to file Form 3520 or Form 3520-A.
How Should I Report Transported Foreign Currency and Other Monetary Items If I Am a U.S. Citizen?
File Form 105, Report of International Transportation of Currency or Monetary Instruments, if you physically mail, transport, ship, or cause to be physically mailed, transported, or shipped into or out of the U.S., currency or other monetary items totaling more than $100,000 at one time.
Since Form 105 is not available on the IRS website, the FinCEN has required U.S. taxpayers to efile this form on the FinCEN website.
What Are the Consequences for Not Reporting Foreign Income or Bank Accounts on My U.S. Tax Return?
There will be serious consequences if the IRS discovers that you have unreported income or undisclosed foreign financial accounts. These consequences can include the following:
- Additional taxes
- Substantial penalties
What Is the U.S. Income Tax Return Due Date?
If you are a U.S. citizen or resident alien from the United States, your tax return deadline is usually April 15. However, if you need more time to file your return beyond the original due date because you lived and/or worked abroad, the IRS allows a two-month automatic extension. With this extension, your U.S. return and tax payment due date will be June 15. You do not have to complete and file a form to obtain the extension.
Individuals that qualify for the automatic extension are:
- Taxpayers living outside the U.S. and Puerto Rico whose main business or post of duty is outside these two areas OR
- Military or naval service members on duty outside the U.S. and Puerto Rico
How Do I Claim The U.S. Automatic Tax Return Extension If I Am a U.S. Citizen Living And/Or Working Abroad?
If you are interested in claiming the automatic extension, you must attach a statement on your income tax return explaining the situation(s) that qualified you for the extension. Please note that any tax payments made after June 15 will be subject to failure-to-pay and interest charges.
Either you or your spouse can qualify for the automatic extension if you file a joint tax return. However, if you and your spouse file separate returns, only the spouse that qualifies for the extension can receive it.
What If I Need More Time to File My U.S. Tax Return Beyond the June 15 Deadline and I Live And/Or Work Overseas?
If you need more time beyond the automatic tax return extension deadline, you can file Form 4868 by June 15 to request an additional 4-month extension of time to file. Your new deadline will be October 15.
What If I Cannot Meet the October 15 Extended U.S. Tax Return Due Date and I Live And/Or Work in a Foreign Country?
If you're outside of the United States and cannot file your return by October 15, you can request an additional, discretionary 2-month extension of time to file from the IRS. This will extend your due date to December 15.
To request the extension, you must send a letter explaining your reasons why you need an additional 2 months to file your tax return. If you don't receive notification from the IRS, it has accepted your request and you will receive the extension. You will only receive IRS notification if your request is denied.
Please be aware that if you received an approved extension of time to file extension Form 2350, you cannot receive the additional discretionary 2-month extension.
What If I Need More Time to File My U.S. Tax Return and I Need More Time to Qualify for a Special Tax Treatment?
If you're filing Form 2555 efile it or 2555-EZ and you need more time to qualify for a special tax treatment (such as qualification for the foreign housing deduction or exclusion and/or the foreign earned income exclusion), complete and file foreign tax return extension Form 2350 on or before June 15. Please be aware that if you are to qualfiy for a foreign deduction or exclusion, you need to qualify for the bona fide residence test or physical presence test.
If you are granted the extension, your return will generally be due 30 days after the date you expect to meet either the bona fide residence or physical presence test.
If you must allocate moving expenses, your extension may increase up to 90 days after the end of the year following the year you moved to the foreign country.
Can I Receive A Longer U.S. Tax Return Extension If I Live And/Or Work Overseas?
In general, you cannot receive an U.S. tax return extension lasting more than 6 months. However, you may be able to receive a longer extension if
- You're outside the United States AND
- You meet certain tests
How Do I Know If My U.S. Tax Return Was Filed on Time If I Live And/Or Work Abroad?
Your U.S. income tax return is considered filed on time if it's from and officially postmarked in a foreign country on or before the deadline (this includes extensions), or given to a designated international private delivery service before midnight of the last date given to you for filing the return.
If your return is filed late, the delivery service or postmark date doesn't determine the date of filing. In this case, when the IRS receives your return, it's considered filed.
Will There Be a Penalty For Tax Payments Made After the June 15 Extended Tax Return Deadline for U.S. Citizens Living And/Or Working in a Foreign Country?
When you file extension Form 4868, you should estimate and pay any additional taxes owed to avoid a late-payment penalty. The penalty applies if, though tax payment methods such as withholding, you paid less than 90% of your actual tax liability by the original income tax return deadline. You'll be charged interest on any tax liability that's unpaid from the original deadline until you pay all taxes owed, even if the late-payment penalty doesn't apply.
Related Foreign Income Links
Foreign Earned Income
Bona Fide Residence and Physical Presence Tests
Tax Deductions for American Citizens Abroad & Foreign Taxes
Efiling U.S. Tax Returns for American Citizens Living or Working Overseas
File U.S. Returns for Past Tax Years for American Citizens Working or Living Abroad