FinCEN Report 114: The Foreign Financial Accounts Report
Apr 7, 2024
FinCEN Report 114, also known as the Foreign Bank and Financial Accounts Report (FBAR), is an important filing for U.S. persons holding or having authority over foreign financial accounts exceeding certain thresholds.
Ensuring compliance with the Bank Secrecy Act, this report is instrumental in combating tax evasion and ensuring transparency in foreign asset reporting. The FBAR deadline is April 15, with an automatic extension to October 15. Failure to file can lead to severe penalties, emphasizing the importance of timely and accurate reporting.
What is the FinCEN Report 114?
FinCEN Report 114 requires U.S. persons to report their financial interests in, or signature authority over, foreign financial accounts if the aggregate value of those accounts exceeds $10,000 at any point during the calendar year.
This includes bank accounts, brokerage accounts, mutual funds, or any other types of financial accounts located outside the United States.
Who needs to file the FinCEN Report 114?
Any U.S. person, including citizens, residents, corporations, partnerships, limited liability companies, trusts, and estates, must file an FBAR if they have a financial interest in or signature authority over foreign financial accounts exceeding the $10,000 threshold.
Why is the FinCEN Report 114 important?
Legal compliance: Adheres to the Bank Secrecy Act, preventing legal issues related to undeclared foreign accounts.
Financial transparency: Provides authorities with information necessary to detect and prevent financial fraud.
Avoid penalties: Ensures protection against the hefty fines associated with non-compliance.
FinCEN Report 114 due date
The due date for filing FinCEN Report 114 is April 15 of the year following the reported calendar year with an automatic extension to October 15–no request is required.
How to fill out FinCEN Report 114
Identify qualifying accounts: Review your foreign financial accounts to determine if the total value exceeded $10,000 at any time during the year.
Gather account information: Compile details for each account, including account numbers, names and addresses of the foreign banks, and the maximum values of the accounts during the year.
File electronically through the BSA e-filing system: Complete and submit your FBAR only through the BSA E-Filing System. Paper filings are not accepted.
Common mistakes in FinCEN Report 114
Overlooking smaller accounts: Failing to report accounts because, individually they do not meet the threshold can lead to non-compliance.
Incorrectly reporting account values: Underreporting or failing to accurately report the maximum account values.
Missing the deadline: Although there's an automatic extension, failure to file by the final October 15 deadline can result in penalties.
Proper understanding and compliance with FinCEN Report 114 filing requirements are crucial for U.S. persons with foreign financial interests. By accurately reporting foreign accounts, you contribute to financial transparency and avoid potential penalties.
