FBAR 101

[expat2011]

Hey RetireJapan. Question for US members out there. But before that, a brief rant.

This year I found out about the existence of FBAR, some form US expats have to file if, at any time during the year, they had a non-US bank account or accounts that totaled the equivalent of $10,000 or more. First off, I found out completely by chance and would like to express my disbelief. Seriously? And "I had no idea" still comes with a $5,000 fine. US citizens are already required to claim all foreign-earned income. Why does the government need to know where it's located in addition to how much I earned? If I use it to buy property I have to claim the value of the property too so... It just seems unnecessary.

Anyways. This year I found out, and coincidentally it's also the first year (thank God) I've ever had a foreign account with $10,000 or more in it. So I have to file, but at least I'm on time.

My question is, from what I can understand the FBAR has nothing to do with my tax return. It's a completely separate thing. It doesn't even go to the IRS, it goes to the Department of the Treasury. Is it simple enough for me to do on my own? I literally only have one foreign account (my Japan post account).

If you can spare me a second question, next year if I happen to not have that same account go above $9,999, I technically don't have to file FBAR, right? But then... I'm afraid they'll think I'm hiding something because I filed it the previous year. In which case they'll ask for supporting documents, I guess... In which case I might as well just have filed FBAR for an account that wasn't above $10,000... Am I just overthinking this? My point is, do they come after you if you don't reach $10,000 after you did it one year?

[captainspoke]

...
My question is, from what I can understand the FBAR has nothing to do with my tax return. It's a completely separate thing. It doesn't even go to the IRS, it goes to the Department of the Treasury. Is it simple enough for me to do on my own? I literally only have one foreign account (my Japan post account).

If you can spare me a second question, next year if I happen to not have that same account go above $9,999, I technically don't have to file FBAR, right? But then... I'm afraid they'll think I'm hiding something because I filed it the previous year. In which case they'll ask for supporting documents, I guess... In which case I might as well just have filed FBAR for an account that wasn't above $10,000... Am I just overthinking this? My point is, do they come after you if you don't reach $10,000 after you did it one year?

https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

Yes, you can do it on your own. It's easy. (tho working thru that form to e-file it, there are a couple places where the navigation could be better, or more understandable)

Yes, it is separate from your tax filing. Some years ago it was mailed in on paper (forms you'd fill out and print, then mail), now it is required that you file electronically. It goes to dept. of treasury, not IRS, tho you can be sure those two talk to each other if necessary.

This is opinion/recommendation, but once you start and as long as you remain an expat, I'd keep filing it. It's easy, takes maybe a half hour or less, it's e-file and not print and go to the post office, etc.

Again, opinion, but intermittent filing may be a flag, even if your account levels before and after your 'skipped' filing are not much over $10k.

[expat2011]

Thanks captainspoke. Yeah... Even though I may not be required to file in future years, I get the sinking feeling it's better to just file anyway, rather than have to justify not filing later in case I trip some flag. If it's easy to do, the time upfront is probably worth the piece of mind.