Banking and Other Investment Accounts

investmentU.S. citizens are required to report to the Treasury Department their financial assets held overseas. Financial assets include, among other items, bank accounts, certain life insurance policies, and investment accounts.

If the total value of all your foreign bank accounts worldwide exceeds $10,000.00 (for even one minute of one day) you must report these accounts on the Report of Foreign Bank Accounts, also known as the FBAR. This includes any accounts you have signature authority over even if you do not own the account.

The form does not carry any tax and is easy to file, but failure to do so is not easy to resolve. The interest or dividends you received during the year must be included on your individual tax return. See U.S. Treasury form TDF 90-22.1.

The filing due date is June 15, or when you file your tax return, whichever comes first.

For U.S. citizens with $50,000.00 or more in foreign financial assets, Form 8938 may need to be filed. Your requirement for filing this form depends on the value of your foreign assets, where you live, and what filing status you use on your tax return. This is another form that does not carry any tax itself. However, if you are required to file this form and do not do so, you may be subject to some very stiff penalties.

Some assets may need to be reported on both the FBAR and Form 8938. If you have such an asset, be sure that it is reported on both forms. That you reported the asset on one form is no defense against penalties for failure to file the other.

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