FinCEN Report 114 FBAR
For Tax Year 2022, the foreign bank and financial account, or FBAR, deadline will be April 18, 2023 to coincide with Tax Day.
Foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. Therefore, the FBAR 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 funds used for illicit purposes or to identify unreported income generated or maintained overseas.
Report on Foreign Bank and Financial Accounts
If you are a U.S. "person," you are required to complete and file a report of your foreign bank and financial account - if:
- You 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.
U.S. "persons" are:
- U.S. citizens or 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.
Taxpayers generally may need to file Schedule B with information in Part 3 which focuses on foreign accounts. Read more about FinCEN Report 114.
In general, you do not have to file a FBAR if the assets are with a U.S. 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.
How and When to File a Foreign Bank and Financial Account Report
The IRS released a user guide for the 2022 Tax Season which covers the details of the Foreign Account Tax Compliance Act - FATCA. It covers the background of the program as well as a step-by-step guide on registering an online account and filing. See the FATCA Report Form 8966.
Prepare and e-File non-IRS FinCEN Report 114, Report of Foreign Bank and Financial Accounts - FBAR - through the Financial Crimes Enforcement Network's (FinCEN) BSA E-Filing System. When you prepare your 2022 Taxes on eFile.com, your FBAR is not a part of the e-Filed tax return.
This document Form 114 is not reported with your U.S. tax return, but rather with the Financial Crimes and Enforcement Network - FinCEN. FBAR is a filing requirement even if a taxpayer is not required to file a 1040 income tax return.
On the other hand, Form 8938 - eFileIT this Form - is part of a tax return and can be e-Filed on eFile.com as it the reporting of Specified Foreign Financial Assets etc. by US taxpayers.
It must be filed separately from your Form 1040 by Tax Day, April 18, 2023. When you e-File your Foreign Bank and Financial Account Report - see instructions below - you will receive an acknowledgement from FinCEN that it has been submitted to them. If you do not file your FBAR by April 18, 2023, you will gain an automatic extension to file it by October 16, 2023. This process must be completed if you are a U.S. citizen or resident alien that has a financial interest in or signature authority over at least one overseas financial account and the total value of all foreign financial accounts exceeded over $10,000 at any time during the 2022 Tax Year. The IRS requires you to complete and e-File Form 114, Report of Foreign Bank and Financial Accounts (FBAR), through the Financial Crimes Enforcement Network's (FinCEN) BSA E-Filing System. Form 114 must be filed or e-Filed separately from your Form 1040 by the Tax Deadline, April 18, 2023.
e-File your foreign bank and financial bank report via the link below and find FBAR Information.
e-File Your FBAR Through FinCEN Now!
How to Report Specified Foreign Financial Assets
If you own specified foreign financial assets, simply prepare and e-File your 2022 Taxes with eFile.com and we will generate and the proper forms for you. Using the app will help you 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).
Note that the Form 8938 filing requirement doesn't replace or affect a U.S. taxpayer's requirement to file a report of foreign bank and financial accounts. 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 - not e-File - Form 3520 or Form 3520-A.
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
Tax Return and Extension Information for U.S. Citizens Living/Working 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 Tax Day 2022 (this includes tax extensions; read more below for details), 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.
If you are a U.S. citizen or resident alien from the United States, your tax return deadline is April 18, 2023. 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, 2022. 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.
To claim the automatic extension, you must attach a statement to your income tax return explaining the situation(s) that qualified you for the extension. Note that any tax payments made after June 15, 2022 will be subject to failure-to-pay penalties and interest charges. If you file a joint tax return, either you or your spouse can qualify for the automatic extension. However, if you and your spouse file separate returns, only the spouse that qualifies for the extension can receive it.
If you know you will need more time beyond the automatic tax return extension deadline, file Form 4868 by April 18, 2023 to request an additional 4-month extension of time to file. Your new deadline will be October 16, 2023. When you file extension Form 4868, you should estimate and pay any additional taxes owed to avoid a late-payment penalty. With eFile.com, we provide many tools to help you prepare and estimate your taxes, including the PAYucator, which can be utilized to estimate these payments. The penalty applies if, through 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.
If you're outside of the United States and cannot file your return by the October deadline, 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, 2022. To request this 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. Be aware that if you received an approved extension of time to e-File a free extension via Form 2350 on eFile.com, you cannot receive the additional discretionary 2-month extension.
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 to Receive More Time to File a U.S. Tax Return and Qualify for Special Tax Treatment
If you're filing or e-Filing Form 2555 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. Be aware that if you are to qualify 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. In addition, 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.
Related Foreign Income Information
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