Do U.S. Citizens Have to Report Foreign Bank Accounts? FBAR & FATCA Explained

Do U.S. Citizens Have to Report Foreign Bank Accounts? FBAR & FATCA Explained

If you're a U.S. citizen with money in a foreign bank account, you might be wondering:
Do I have to report it to the IRS? And what are the penalties if I don’t?

The answer: Yes, and it can get serious.

Let’s break down your responsibilities under FBAR and FATCA — and how to stay compliant.

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💼 What Is FBAR?

FBAR stands for Foreign Bank Account Report.
If you have $10,000 or more (total across all foreign accounts) at any point during the year, you must file FinCEN Form 114.

• Not filed with IRS — submitted to FinCEN

• Due by April 15 (automatic extension to October)

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🌍 What Is FATCA?

FATCA = Foreign Account Tax Compliance Act

• Requires reporting of foreign financial assets over certain thresholds

• Filed using IRS Form 8938

• Thresholds vary:

  • $50,000 (single, living in U.S.)

  • $200,000 (married, living abroad)

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⚠️ What Happens If You Don’t File?

Penalties can be severe:

• FBAR:

  • Up to $10,000 per non-willful violation

  • Up to $100,000 or 50% of account value for willful violations

• FATCA:

  • $10,000 failure-to-file penalty

  • Additional fines up to $50,000 for continued failure

❗ Criminal charges possible in extreme cases

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📊 What Must Be Reported?

• Foreign bank & brokerage accounts

• Mutual funds, pension accounts

• Some crypto exchanges (depending on IRS guidance)

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🧾 How to Stay Compliant

1. Track your balances — include ALL accounts

2. File FBAR (FinCEN Form 114) annually

3. If thresholds are met, include Form 8938 with your tax return

4. Consult a tax advisor if unsure — especially if you live abroad

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📝 Conclusion

If you’re a U.S. citizen with foreign bank accounts or assets, reporting is not optional — it’s a legal obligation.

By understanding FBAR and FATCA, and filing correctly, you can avoid huge penalties and stay in good standing with the IRS.

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