If you have a bank or brokerage account outside of the United States and had $10,000 or more in that account any time during the year, you must file a Foreign Bank Account Report or FBAR with the US treasury. In this post, I’ll talk about the due date for FBARs in 2018. This date changed a couple of years ago and many are still confused about when to file their FBAR.
First, note that the form name for the FBAR is FinCEN Report 114. You can file this form online through the BSA e-file system. For a while, the IRS tried to refer to the form as FinCEN Report 114. By 2018, they gave up and went back to calling it the FBAR.
Second, the old rule was that your FBAR was due June 30. It did not matter when you filed your personal tax return, your FBAR was due June 30.
This created a lot of confusion for those filing their personal returns on extension or by October 15. Many did not meet with their accountants or tax preparers until well past the June 30 deadline and were at risk of significant penalties.
Because the penalties for noncompliance with the FBAR rules can be staggering—up to 100 percent of the highest amount held in the pertinent foreign financial accounts for willful failures—confusion put taxpayers with international accounts at great risk.
The new due date of your FBAR in 2018 is much more reasonable. You must file your FBAR on April 15 with your personal income tax return. If you get an extension for your personal return, you automatically get an extension for your FBAR.
So, if you file for a 6-month extension, the due date of your personal return and your FBAR becomes October 15. To reiterate, you DO NOT need to file a special extension for your FBAR in 2018. Your personal extension covers both your 1040 and your FBAR or FinCEN Report 114.
Here is the official statement from FinCEN and the IRS on the due date of your 2018 FBAR.
Report of Foreign Bank and Financial Accounts (FBAR) Due Date for Calendar Year 2018
FinCEN would like to reiterate, as previously announced on our website in December 2017, the annual due date for filing FBARs for foreign financial accounts is April 15. This date change was mandated by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41 (the Act). Specifically, section 2006(b)(11) of the Act changed then FBAR due date to April 15 to coincide with the Federal income tax filing season. The Act also allows an extension of the filing deadline of up to six months. To implement the statute with minimal burden, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required. (Click here for the official statement.)
The FBAR filing deadline will follow the Federal income tax due date guidance, which notes that when the Federal income tax due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. (Click here for more on the basic filing requirements.)
Accordingly, the due date for FBAR filings for foreign financial accounts maintained during calendar year 2018 is April 17, 2019, consistent with the Federal income tax due date. Filers who fail to file their 2018 calendar year FBAR by April 17, 2019, have an automatic extension up to October 15, 2019.
Note that the FBAR applies to any US person who had signatory authority over a foreign bank or brokerage account in 2018. Even if the account was owned by your company, and you were just a signor to facilitate transfers on behalf of that company, you must file an FBAR.
For example, you’re an employer of Ford Motor Company’s factory in Mexico. You are the signor on the account in Mexico to pay local expenses and payroll. None of the money in the account belongs to you. Even in this situation, you must file an FBAR in 2018 to report the account.
A U.S. person is defined as (1) a citizen or resident of the United States or (2) a domestic entity (including a corporation, partnership, trust, or limited liability company, regardless of whether the entity is treated as disregarded for federal income tax purposes).
US citizens and green card holders must file an FBAR regardless of where they live. If a US citizen is a resident of Mexico and never visits the US, they still must file an FBAR. If you are not a citizen or green card holder, you will only file an FBAR for years when you are a resident of the United States (often defined as someone who spends more than 180 days in the US, but there are many exceptions).
Financial accounts include bank and securities accounts, insurance and annuity accounts with cash value, and commodity futures and options accounts. Also included in the definition are foreign mutual fund accounts or similar pooled fund accounts that (1) issue shares available to the general public, (2) have a regular net asset value determination, and (3) have regular redemptions. Limiting reportable funds to those having these characteristics generally results in foreign hedge funds and foreign private equity funds being excluded from the reporting requirement.
I hope you’ve found this article on the 2018 due date of your Foreign Bank Account Report to be helpful. For more information on international tax planning or preparation, please contact reach out to us here.