Do I Need to File FBAR Every Year?

The Report of Foreign Bank and Financial Accounts, commonly known as the FBAR, is a report filed for transparency purposes. It provides the U.S. government with information on foreign financial accounts to help combat tax evasion and other financial crimes. This requirement is separate from an annual income tax return, as the FBAR is not filed with the IRS but with a different bureau of the U.S. Department of the Treasury. The obligation to file is a yearly determination.

Determining Your Annual Filing Requirement

Whether you need to file an FBAR is a question that must be answered each calendar year. The obligation is not continuous; it is based entirely on your account values and status within a specific year. If you meet the criteria in one year but not the next, then no FBAR is required for that second year.

The filing requirement has two conditions. First, you must qualify as a “U.S. person,” a term defined broadly to include U.S. citizens, resident aliens, trusts, estates, and business entities established under U.S. law. The requirement applies regardless of whether you physically reside in the United States or abroad.

The second condition is financial. An FBAR is required if the combined value of all foreign financial accounts in which you have a financial interest or signature authority exceeded $10,000 at any point during the calendar year. For instance, if you have one account that reached a maximum value of $6,000 and a second that peaked at $5,000, your aggregate value is $11,000, and you must file an FBAR reporting both accounts.

A financial interest is held by the owner of record or legal title holder. Signature authority is the ability to control the disposition of assets in the account through direct communication with the financial institution. If you meet both the U.S. person test and the $10,000 threshold, even for a single day, you have an annual requirement to file the FBAR.

Information Required for FBAR Filing

To complete the FBAR, formally known as FinCEN Form 114, you must gather details about yourself and each foreign account. For the filer, this includes your full name, U.S. taxpayer identification number, and complete address.

For each foreign financial account, you must provide:

• The name of the financial institution and its full mailing address
• The account number or other designation
• The type of account, such as a bank or securities account
• The maximum account value during the calendar year

A key piece of information is the account’s maximum value during the year. To determine this, you must convert the account’s value from its foreign currency into U.S. dollars using the Treasury’s Financial Management Service rate for the last day of the calendar year. If a rate is not available from the Treasury, you may use another verifiable exchange rate, but you must document the source used. You must perform this calculation for each account to report its highest value accurately.

How to Submit Your FBAR

The FBAR must be filed electronically through the Financial Crimes Enforcement Network’s (FinCEN) BSA E-Filing System. Paper filing is not an option in most circumstances. The system is accessible online, and you do not need to register for a special account if you are filing as an individual for your own accounts.

The process begins by navigating to the BSA E-Filing System website to start the online form. After inputting all the required information, you must sign the form electronically. The system will provide instructions for this digital signature before you submit it through the portal.

The annual deadline for filing the FBAR is April 15, which aligns with the typical income tax deadline. However, an automatic extension to October 15 is granted each year, meaning you have until that later date to submit your report without penalty.

Penalties for Failure to File

Failing to file a required FBAR can lead to significant financial penalties, which are categorized based on whether the failure was willful or non-willful. You are also required to maintain records related to your FBAR filing for at least five years.

A non-willful failure to file, which can result from negligence or an oversight, can lead to a civil penalty of up to $16,536 per violation for 2025. The IRS may choose to waive the penalty if you can demonstrate a reasonable cause for the failure.

A willful failure to file carries much more severe consequences. Willfulness can be interpreted as an intentional disregard of a known legal duty or a conscious effort to avoid learning about filing requirements. The civil penalty for a willful violation can be the greater of $165,353 or 50% of the balance in the unreported accounts. These violations can also lead to criminal penalties.