All U.S. individuals and businesses must report their worldwide income on their U.S. income tax returns. One way that the IRS tries to “capture” unreported foreign income is the requirement for certain taxpayers to file Form FinCEN (Financial Crimes Enforcement Network, Dept. of the Treasury) Form 114. This form, which replaces the old Form TD F 90-22.1, is required when a U.S. person has a financial interest or signature authority over a financial account located in a foreign country, and the total amount of the maximum value in each foreign account during the prior calendar year exceeds $10,000. On FinCEN Form 114, you need to report each foreign financial account and the maximum value of that account during the year. This form is due on June 30th, and no extensions of time to file are allowed. There are potential very stiff penalties for either late filing or failure to file the form.
The information requested on the FinCEN Form 114 is identical to Form TD F 90-22.1, so if you filed Form TD F 90-22.1 in prior years, the new FinCEN Form 114 will be easy to file. However, the method of filing the FBAR form has changed. The old Form TD F 90-22.1 was mailed to the Department of Treasury in Detroit, MI. However the new Form FinCEN Form 114 must be electronically filed. If you are currently having your individual income tax returns electronically filed through a software provider, such as we do for our clients at BKC, you may be able to use that software provider to electronically file the FinCEN Form 114. Otherwise, you can go to http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html to electronically file the FBAR return.
With questions about these requirements or to prepare your FBAR, please contact us to discuss.
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