FBAR Explained: What US Expats Need to Know About FinCEN Form 114

If you’re a US citizen living abroad and using foreign bank or financial accounts, there’s a filing requirement that trips people up every year: FinCEN Form 114, better known as the FBAR (Foreign Bank Account Report).

It’s not a tax form.
It’s not filed with your return.
And missing it can trigger penalties even if you owed zero tax.

Here’s a clear, no-nonsense breakdown of what the FBAR is, who needs to file, and how to stay compliant without losing your mind.

What Is FinCEN Form 114 (FBAR)?

FinCEN Form 114 is a financial disclosure report, not a tax return. It exists under the Bank Secrecy Act (BSA) and is filed directly with the US Treasury’s Financial Crimes Enforcement Network (FinCEN).

The goal isn’t taxation — it’s visibility.

The US government uses the FBAR to track offshore financial activity and identify undisclosed foreign accounts. Whether or not those accounts generate taxable income is irrelevant.

Who Needs to File an FBAR?

You must file an FBAR if all three of the following are true:

1. You’re a US citizen, Green Card holder, or US person
2. You have a financial interest in or signature authority over foreign accounts
3. The combined maximum value of those accounts exceeded $10,000 at any point during the year

That $10,000 threshold is aggregate, not per account.

Example:

• $4,200 in a Spanish bank account
• $7,000 in a French brokerage
  → Total = $11,200 → FBAR required

Even if the balance crossed $10,000 for one day, you’re still required to file.

Accounts That Usually Must Be Reported

You may need to report:

• Foreign checking or savings accounts
• Joint accounts held abroad
• Foreign brokerage or investment accounts
• Business accounts where you have control or signatory authority
• Mutual funds based outside the US
• Life insurance policies with a cash value
• Crypto accounts held on non-US platforms

Ownership isn’t the only trigger — control matters.

Accounts That Are Generally Excluded

These typically do not require FBAR reporting:

• US accounts holding foreign securities
• Correspondent or Nostro accounts
• Accounts owned by foreign governments or financial institutions
• Military banking facility accounts abroad
• Certain US-based retirement accounts (like IRAs)

When in doubt, filing is usually safer than skipping.

FBAR Deadlines (and the Automatic Extension)

• Original due date: April 15
• Automatic extension: October 15

You don’t need to request the extension — it’s automatic.

Penalties for Not Filing

This is where things get serious.

Non-Willful Violations

If the failure to file was accidental or due to lack of knowledge:

• Penalty: Up to $10,000 per year
• Penalties may be waived if you can show reasonable cause

Important Update: 2023 Supreme Court Ruling

In Bittner v. United States (2023), the Supreme Court ruled that non-willful penalties apply per annual report, not per account.

That’s a massive change.

Previously, missing multiple accounts could result in stacked penalties. Now, non-willful penalties are generally capped per year, unless the IRS determines willfulness.

Willful Violations

If the IRS believes you intentionally ignored the requirement or acted with reckless disregard:

• Penalty: Greater of $100,000 or 50% of the account’s highest balance
• Applied per account, per year
• Criminal charges are possible in extreme cases

How the IRS Finds Foreign Accounts

This isn’t a guessing game anymore.

Under FATCA, many foreign banks report US-owned accounts directly to the IRS. That data is cross-checked against your filings.

Translation:
Your bank may report your account even if you don’t.

FBAR vs FATCA (Form 8938)

These are often confused, but they’re not the same.

Many expats must file both.

How to File FinCEN Form 114

FBARs are filed electronically through the BSA E-Filing System. No IRS account required.

Step 1: Start an Individual FBAR

Choose “Prepare and Submit” under Individual FBAR.

Step 2: Enter Your Info

• Full name
• SSN or Tax ID
• Date of birth
• Current address

Step 3: Report Each Account

For each account, you’ll need:

• Institution name
• Account number
• Account type
• Maximum yearly balance (USD)

If you have 25+ accounts, you can check a box instead of listing each one — but you must still retain records.

Step 4: Review and Submit

Sign electronically and save the confirmation.

Records You Should Keep

You’re required to keep FBAR records for at least five years.

Best practice includes:

• Year-end or peak balance statements
• Proof of ownership or authority
• USD conversion method used
• Exchange rate source

This is exactly where most people fall apart without a system.

Missed the Deadline? Here’s What to Do

Late filing isn’t ideal — but ignoring it is worse.

You can file late and explain the reason directly on the form, including:

• You didn’t know filing was required
• You misunderstood the threshold
• You lacked access to statements
• Technical issues with the filing system

Non-willful, self-corrected filings are often penalty-free.

Catching Up on Past FBARs

If you’ve missed prior years, you still have options:

Delinquent FBAR Submission

For people who filed tax returns but skipped the FBAR.

Streamlined Filing Compliance

For those who missed both tax returns and FBARs, provided the mistake was non-willful.

Critical rule:
You must act before the IRS contacts you.

Why This Gets Messy (and How to Fix It)

Most FBAR issues don’t come from hiding money — they come from:

• Tracking accounts across countries
• Forgetting short-lived balances
• Losing records over multiple years
• Mixing personal, business, and crypto accounts

Compliance breaks when financial visibility breaks.

That’s exactly why NomadLedger exists.

Stay FBAR-Ready With NomadLedger

NomadLedger is built for US expats and digital nomads who want:

• A clear record of foreign accounts
• Year-by-year balance tracking
• Clean documentation when filing time comes
• Fewer “oh shit” moments with compliance

FBAR filing shouldn’t feel like archaeology.