By: Amanda Wilson
If you are a foreign citizen that is considered to be a resident for U.S. income tax purposes, you need to be aware that your U.S. tax filing obligation is not limited to the income tax return. U.S. taxpayers (including foreign residents) that have more than $10,000 in foreign bank accounts or other types of foreign investments are required to file Form 114 (commonly known as an FBAR) by June 30th of every year.
If you are a foreign citizen, you may be wondering why I am drawing special attention to you. The reason is that you may have one or more bank accounts in your home country and not realize that the filing obligation extends to these accounts. This is, in my experience, a common misconception. In addition, you could also have a filing obligation if you have signatory authority over an account. If a family member in your home country lists you on their account, the account often needs to be disclosed.
It is important that you determine whether you have foreign accounts that, in the aggregate, exceed $10,000 at any point during the calendar year. If so, file the FBAR. Failure to file the FBAR can result in significant civil and even criminal penalties. For example, the penalty can be up to $100,000 or 50% of the highest balance in your account if the IRS finds your failure to file was willful.
The form is filed electronically here.