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If you are the account holder or have signature authority over any foreign bank account (this includes checking or savings accounts, mutual funds, brokerage accounts, unit trusts, and other types of foreign financial assets), it may be possible that you are required to report the account yearly to the United States Department of Treasury. Under the Bank Secrecy Act, each United States person must file a Foreign Bank Accounts Report (FBAR), or FinCEN Form 114 if the combined total of your foreign financial accounts is at least $10K or reaches this threshold at any point during the calendar year.
FinCEN Form 114 is a requirement for all US Citizens/Residents with foreign bank accounts, and failure to file this form may result in stiff penalties, including punitive financial fees and criminal prosecution.
In addition to FinCEN Form 114, you are required to file FATCA Form 8938 if you meet any of the following conditions
You live in the United States, you are filing a tax return as a single individual, and you have foreign assets with an aggregate value of $50K on the final day of the year or the value of your foreign assets reached $75K at any point during the year.
You live in the United States, you are filing a joint return with your spouse, and you have foreign assets with an aggregate value of $100K at the end of the year or the value of your foreign assets reached $150K at any point during the year.
You are a US Expat living abroad, you are filing a tax return as a single individual, and you have foreign assets with an aggregate value of $200K on the final day of the year or the value of your foreign assets reached $300K at any point during the year.
You are a US Expat living abroad, you are filing a joint return with your spouse, and you have foreign assets with an aggregate value of $400K at the end of the year or the value of your foreign assets reached $600K at any point during the year.
For the purpose of filing FATCA Form 8938, the term ‘foreign assets’ includes more than your financial accounts. You must report all gains and losses incurred from your assets abroad, including private equity and foreign hedge funds, foreign stock, partnership interests, and any other income-producing asset.
Unlike FinCEN Form 114, FATCA Form 8938 is filed with your US tax return to the IRS.