How To Report Foreign Bank Accounts

July 6, 2018

It is not unheard of for people with large amounts of wealth to hide their money in foreign bank accounts. In fact, the practice is so common that it is a recurrent theme in Hollywood films and TV shows. Hiding money in foreign accounts is illegal, which is why American citizens who have foreign accounts need to be extremely cautious in how they treat and report those accounts. If you don’t want to end up like the bad guys in a James Bond film, talk to a Los Angeles accounting advisor about what you need to do to report your foreign funds.

Know Who Is Required To Report Foreign Bank and Financial Accounts

Not everyone who owns a FBAR is required to report the account. The United States only requires residents to report an FBAR if it meets two criteria:

The U.S. citizen has an economic interest in at least one transcontinental financial account; and
The value of that account or the total value of all accounts exceeds $10,000 at any given time during the calendar year.

If you meet both of these requirements, you are required to report your FBAR. An Encino accountant can help you with filing requirements.

File a FinCEN Form 114

Just as there is a W-2 for reporting income earned as a U.S. employee and a 1040 for reporting income earned as an independent contractor, so too is there a specific form for reporting foreign accounts. That form is a FinCEN Form 114. The form is fairly self-explanatory and includes spaces for you to provide all the necessary information on your FBARs. This information may include the name of the financial institution, the account number and the account balance.

Work With Los Angeles Company Advisors

If you own a foreign account, it would be in your best interests to work with a knowledgeable Encino accountant to make sure that you meet all the reporting requirements. Email Wallace & Associates today to discuss your tax situation and to schedule your consultation.