NEWS FLASH: The IRS has broadened the Streamlined Program to accept more people. See my blog on this topic here.
If you're an American living abroad, you already know that you must report your 'foreign' (non-U.S.) financial account to the U.S. government annually. For 2012 and prior years, this was done using form TD F 90-22.1, separate from your tax return.
If you have a professional tax return preparer, they would usually prepare this form along with your U.S. return. For 2011-2012, there was even some synergy with this approach, because much of the data for the FBAR would be duplicated on form 8938, which is actually part of the return.
The FBAR form is now obsolete. Instead, each American must file the new form 114 – a process which can only be done online with the ominously-named Financial Crimes Enforcement Network (FinCEN), which also administers the Bank Secrecy Act (BSA).
Even with this new system, it is still possible to have your preparer file the form. Unfortunately, at the time of writing this blog, no professional tax software program is capable of e-filing the form (several say they will have this capability later in the year). Ultimately, a professional will do the exact same work you would do in completing and filing the form. In fact, it will actually be more work to provide the information to a professional than to file it independently.
The way the system is currently set up, it will almost always make more sense for you to do it on your own. Consequently, MNP recommends you file your own FBAR.
Download Forms Reader
You will need Adobe Reader to use this system. If you don't have it, click here (it's free): Download the Forms Reader
Click here for the BSA web site
Filing with the BSA E-Filing System
1. Click the above link for the BSA website. Click the heading "Prepare FBAR" or the link below it that reads "FinCEN Report 114". This causes the FBAR to be downloaded to your computer as a PDF file that you can save.
2. Fill out all relevant fields; note that every field that appears with a pale yellow background requires a response. For most fields, you can obtain more information about what is required by hovering over the field with your mouse and reading the instructions that appear.
3. Be sure to include yearly maximum balances for every account that was open for any part of the year. Maximum account balances need to be reported in US dollars, with currency translated using the US Department of the Treasury's Financial Management Service Rate for the last day of the year. Recent rates can be found here. The IRS provides end-of-year exchange rates for the past several years here.
4. For each category of account (Parts II through V), you can add space for more accounts in the category within the same form by clicking the "+" button to the right of the heading for that account category. You do not need to fill out more than one form per person per year.
5. For joint accounts, report the full value of the account, not only your share. When indicating the number of joint owners, do not count yourself. When providing information about the principal joint owner, give information about the principal owner other than yourself.
6. When you have completed the FBAR, click the "Validate" button on the front page of the form. You will be informed of any errors that need to be corrected before submission.
7. Once there are no errors, clicking the "Validate" button will result in a request that you sign the form. To do so, click the "Sign the Form" button on the front page of the FBAR.
8. To upload your FBAR to the FinCEN website, click the "Ready to File" button on the front page of the FBAR or the "Submit FBAR" heading on the BSA website.
9. Enter your email address, first name, last name and phone number and then click the "Choose File" button to browse on your computer to the individual FBAR that you have completed.
10. Once the FBAR is attached, you can file it electronically by clicking the "Submit" button.
11. You should then see a message on the screen telling you that your FBAR has been accepted. You should also receive an email noting the acceptance of your FBAR. Both of these confirmations will also provide a tracking ID. Save this email for your records.
12. Within a few days, you should receive a separate email acknowledging your FBAR and providing a BSA Identifier. Save this email also for your records. This completes the process of filing your FBAR.
13. Use the same form and follow the same instructions if you are filing FBARs for prior years. Do not use older versions of the form, and do not send your form by mail.
There is more detailed information available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
