First time doing foreign taxes

"An" is a small word, but in this context it could have a large financial consequence (penalties).

The FBAR is required if the aggregate of the max. value of all foreign accounts during the year totals $10,000. A current account of $4,000, a savings account of $4,000, and a joint account of $4,000 means an FBAR must be filed.

Okay I may be missing something so . If all account are over 10k you must file for an FBAR. But what does the fbar do? Just show them what I have in savings what's the purpose? Is it to have to pay on my savings I guess I'm not quite understand what the purpose  of it is.

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If you only have $5,000 in total in one account but you move that money from one account to another, then you would need to file as you then have 2 accounts with a high balance of $5k tipping you over the $10k threshold.

Right! I only have one at the moment so I got that wrong. Thanks for clarifying.

If you only have $5,000 in total in one account but you move that money from one account to another, then you would need to file as you then have 2 accounts with a high balance of $5k tipping you over the $10k threshold.

Right I'm understanding needing to file is the whole is over 10 k I think what I'm trying to say is what is the purpose of them wanting u to file if over the 10k max. Is this just so they can watch your savings that's not what I'm understanding


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If you only have $5,000 in total in one account but you move that money from one account to another, then you would need to file as you then have 2 accounts with a high balance of $5k tipping you over the $10k threshold.

This is what both puzzles and frightens me. They treat the same $5,000 twice in effect. No big deal if it is only two accounts with a total of $10,000. I have two joint accounts with the same bank, one current and the other savings. Money has moved back and forth between the two accounts over the years. If I take the highest value for the whole year for both accounts, it makes us appear far richer than we are. In fact there have been times where we have been in decent credit and in serious overdraft during the same year. I've also been a trustee for a friend's personal investment plan that I've been asked to include along with a couple of other accounts. This all adds up unfortunately, again making me look far wealthier than I actually have been.

Okay I may be missing something so . If all account are over 10k you must file for an FBAR. But what does the fbar do? Just show them what I have in savings what's the purpose? Is it to have to pay on my savings I guess I'm not quite understand what the purpose  of it is.

If you are a US citizen with a foreign bank account(s), and don't have every last bit of your funds in US bank accounts, the Financial Crimes Enforcement Network of the Treasury assume there is a possibility you may be a terroristfundingdrugrunningmoneylaunderer. It's your responsibility to prove you are not. I'm sure your financial situation is as pure as the driven snow, but if, at a future date, your financial integrity were to be questioned by the Treasury, they expect you to have filed a complete dossier of all foreign accounts so they will have the information to verify your statements.

How likely is this to happen? Not likely. Nonetheless, those are the rules and to make sure there are substantial penalties for not declaring accounts to FinCEN. Again, how likely are you to be hit with the penalties? Probably little chance, unless your financial details come under suspicion. For example, you may have an account in a foreign bank the DoJ and Treasury are investigating.   

This is what both puzzles and frightens me. They treat the same $5,000 twice in effect. No big deal if it is only two accounts with a total of $10,000. I have two joint accounts with the same bank, one current and the other savings. Money has moved back and forth between the two accounts over the years. If I take the highest value for the whole year for both accounts, it makes us appear far richer than we are. In fact there have been times where we have been in decent credit and in serious overdraft during the same year. I've also been a trustee for a friend's personal investment plan that I've been asked to include along with a couple of other accounts. This all adds up unfortunately, again making me look far wealthier than I actually have been.

The fact you 'appear' to be richer than you are in reality is of little importance. It's only a reporting of foreign accounts and FinCEN is far more interested in the account and the account numbers.

Action usually is taken (and your file actually looked at) when there is an audit need. Even then, presently, they are probably only really interested in accounts over, say, $500,000 to $1 million and over. Your extra $50,000 (more than you actually have) is of little consequence since it is not related to tax.

FinCEN may impose their extreme penalties even when there is no tax due.

As theOAP says FBAR is about seeking out criminal activity and this week my son had an "interesting" experience.

My son was called into his bank last week to answer questions about suspicious activity on his account that may be money laundering.

In January I sold our car to the big VW dealer in town a couple of weeks before we left the country, returning to England to live from Texas. The check was $14,000 which is above the $10k mobile check deposit limit and we no longer had a local bricks and mortar place to deposit the check so I went into my son's bank with him and endorsed the check in front of a teller before he deposited it into his account. He chatted with the teller, explaining what we were doing.

He then used Transferwise to send the money into my bank account in England, and to avoid wire charges he sent 3 payments over a 4 or 5 week period using ACH. This resulted in him being called into the bank. Apparently he should have explained to the Teller clearly what he was intending to do, or better still called the Bank as they only saw a large sum being deposited and then paid out in smaller chunks to an overseas bank. This was all easily accounted for, no cash involved and obvious from the deposited check where the money had come from but he was called into the bank for questioning rather than a simple phone call.

If you're moving money between 2 accounts, the agregate (combined balance) of the accounts won't rise. For FBARs, you don't have to take the highest balance of each account you have during the year and add them together, but report the highest total agregate (combined) balance during the tax year.

This advice on FBAR preparation is scarily wrong!  Thankfully, this forum has some amazing regular contributors who are willing to help others in need at no charge at all..

HM I've sent you a message, not sure if you've seen it?

Hi Elsa I've finally messaged you back.

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