If you’re an American citizen, filing your FBAR (Report of Foreign Bank and Financial Accounts) is even more important than planning your summer vacation. The FBAR deadline was changed for 2016, and is now due on April 15 2017.
The FBAR form is a report of any financial account, brokerage account, mutual fund, or other kind of investment or account that you have outside the United States, or an account where you have a financial interest or signature authority on. (Are you a CFO of an Israeli company?) Even if you file your American taxes, you are still required to file this additional report. The fact that you are an American person, with more than $10,000 in foreign assets on a single day of the year, is enough to require you to file this report.
The FBAR is a tool to help the American government identify people who may be using foreign accounts to avoid paying taxes. Since America taxes on worldwide income, it wants to know what accounts you hold offshore. Yet, the filing requirements stand even if your accounts did not produce any income.
Don’t forget to file
If you forget, make a mistake, or you purposely choose to omit any details from your FBAR report, you may be faced with severe penalties. Unlike the regular tax return which needs to be postmarked by the due date, the FBAR needs to be received by the due date. If you haven’t already filed your FBAR form, click here to get the form.
If you are unsure how to file an FBAR or you have other questions about what you need to know as an American living overseas, learn more about the e-book The Expatriate’s Guide to Handling Money and Taxes.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published February 4, 2015.