If you have any money in accounts outside of the United States, it is vital that you understand your obligations regarding Foreign Bank Account Reports (FBAR). If you meet certain requirements, federal law mandates that you submit a report detailing your overseas assets each year.
The process of filing an FBAR in Richmond does not have to be a complicated affair, but it is important to get all of the details right. A dedicated FBAR attorney can answer your questions and help you navigate this process.
FBAR requirements apply to anyone who is considered a “U.S. person.” This goes beyond being a citizen of this country, as these obligations also apply to domestic businesses and lawful residents. A U.S. person will have to file their annual report as long as they have foreign accounts with an aggregate value of more than $10,000 at any point in a calendar year.
The aggregate value looks at the highest balance on any account at any point in the year. If the maximum you have held in all of your accounts is more than $10,000, you will need to submit an FBAR for that year.
In fact, you could be required to submit a filing even if you are not the owner of the account. This is because these requirements apply not only to the owners, but also any individuals with signing authority as well. A Richmond attorney can help you understand if you must go through the FBAR filing process.
There is more to the Richmond FBAR filing process than submitting a form online. The following steps can ensure that you comply with the law and provide a report that is accurate and correct.
Start by collecting key details for each foreign financial account. You need the bank or institution’s name and address, account number, type of account, and the maximum value of the account during the calendar year. If you have multiple accounts, calculate the total value to see if you meet the $10,000 threshold.
Unlike other IRS forms, the FBAR is not filed with your tax return. Instead, it must be submitted electronically through the BSA E-Filing System, a secure portal run by the Financial Crimes Enforcement Network (FinCEN).
Using the BSA E-Filing portal, complete FinCEN Form 114. The form requires accurate input of your personal information, foreign account details, and financial values. If you are reporting accounts jointly, your spouse’s information may also be required.
The FBAR is due each year by April 15, with an automatic extension to October 15. That means even if you miss the initial deadline, the federal government will automatically extend it by six months without you requesting more time. However, late submissions without a valid reason may trigger penalties.
After filing, keep copies of your submission and supporting records for at least five years. This includes bank statements, ownership documentation, and records showing how account values were calculated. These may be needed if the IRS or FinCEN initiates an audit or inquiry.
If you have questions about the process of filing and FBAR in Richmond, a dedicated tax attorney can provide you with the answers. It is important to have a clear picture of whether or not you are obligated to comply, and your form should always be free of errors. Call today to get the help you need.