FBAR Filing Requirements: Who Needs to File and How

The FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Form 114) is a reporting requirement, not a tax form. It does not generate a tax liability. It reports the existence and maximum value of foreign financial accounts held by US persons when the aggregate value of all foreign accounts exceeds $10,000 at any point during the calendar year. The FBAR is filed with the Financial Crimes Enforcement Network (FinCEN), not the IRS, though the IRS enforces the penalties. For Americans in Canada and Canadian permanent residents in the US, the FBAR is one of the most commonly missed filings, and the penalties for non-compliance are disproportionate to the reporting obligation.

Who is a “US person” for FBAR purposes?

The FBAR definition of “US person” is broader than you might expect:

• US citizens, including dual citizens living in Canada who have never lived in the US
• US lawful permanent residents (green card holders), even if they live outside the US
• US resident aliens who meet the substantial presence test
• Trusts and estates that are US persons under domestic law
• US entities (corporations, partnerships, LLCs)

The most common cross-border FBAR filer is a US citizen or green card holder living in Canada. Every Canadian bank account, investment account, and registered account (RRSP, TFSA, RESP, FHSA) they hold is a “foreign” account from the US perspective.

What is a “foreign financial account”?

A foreign financial account is any financial account located outside the United States. For Americans in Canada, this includes:

• Bank accounts: chequing, savings, GICs, term deposits at Canadian banks
• Investment accounts: brokerage accounts, trading accounts, mutual fund accounts held at Canadian financial institutions
• Registered accounts: RRSP, RRIF, TFSA, RESP, RDSP, FHSA, LIRA, LIF
• RESPs where you have signature authority: even if the beneficiary is your child, you have signature authority
• Joint accounts: if you are named on a joint account with your Canadian spouse, the full value of the account is reportable (not just your share)
• Foreign pension accounts: defined benefit pensions, deferred profit-sharing plans, and other employer plans at Canadian employers
• Tax-free savings accounts at Canadian banks: the TFSA is a foreign financial account for FBAR purposes, regardless of its treatment under the treaty

What is NOT a foreign financial account for FBAR purposes:

• Real property (a Canadian condo or house)
• Personal property (a car, art, jewelry in Canada)
• Social insurance accounts (CPP, QPP, OAS) managed by the government
• US accounts (even if held by a Canadian bank’s US subsidiary)
• Cryptocurrency held in a self-hosted wallet (not on an exchange). If the cryptocurrency is held on a foreign exchange, the exchange account is reportable.

How does the $10,000 threshold work?

The threshold is $10,000 USD in aggregate maximum value at any point during the calendar year. The key concepts:

Aggregate. Add up the maximum value of every foreign account you have (or have signature authority over). If the total exceeds $10,000 at any moment, you file an FBAR reporting every foreign account, including accounts that individually held less than $10,000.

Maximum value. For each account, use the highest balance during the year, not the year-end balance. If your Canadian savings account hit $15,000 CAD in March but dropped to $2,000 by December, the March balance is the one that counts.

US dollar conversion. Convert each account’s maximum value to USD using the Treasury Department’s end-of-year exchange rate (available on the Treasury’s exchange rate page). This is different from the IRS exchange rate used on Form 1040; the FBAR uses the Treasury rate.

How do I file the FBAR?

The FBAR is filed electronically through the BSA E-Filing System at fincen.gov/bsa-e-filing-system. It is not filed with your tax return and is not mailed.

What you need for each account:

• Name of the financial institution
• Account number
• Maximum value during the year (in USD, using the Treasury end-of-year rate)
• Type of account (bank, securities, or other)
• Country where the account is held

Filing deadline: April 15, with an automatic extension to October 15. No form or request is needed for the extension; it applies to everyone automatically. If you miss October 15, there is no further extension.

Third-party filing: A tax preparer can file the FBAR on your behalf with your authorization (FinCEN Form 114a, Record of Authorization to Electronically File FBARs). Most cross-border CPAs file the FBAR as part of the annual return preparation.

What is the difference between FBAR and Form 8938?

The FBAR and Form 8938 both report foreign financial assets, but they are different requirements with different thresholds, different filing locations, and different penalties:

Feature	FBAR (FinCEN 114)	Form 8938
Filed with	FinCEN (BSA E-Filing)	IRS (with your 1040)
Threshold (US residents)	$10,000 aggregate max value	$50,000 year-end ($75,000 max during year); MFJ: $100,000/$150,000
Threshold (abroad)	$10,000 aggregate max value	$200,000 year-end ($300,000 max); MFJ: $400,000/$600,000
What it covers	Bank accounts, securities accounts, other financial accounts	Financial accounts + other foreign financial assets (stocks held directly, partnership interests, financial instruments)
Penalties (non-willful)	Up to $10,000/account/year	$10,000 per failure, plus $10,000/month after notice (up to $50,000)
Penalties (willful)	Greater of $100,000 or 50% of account balance	Same as non-willful penalties (criminal penalties separate)

If you meet both thresholds, you file both. They are not substitutes for each other.

What are common FBAR mistakes?

Forgetting registered accounts. RRSPs, TFSAs, RESPs, and FHSAs are foreign financial accounts for FBAR purposes. Many filers report their bank and brokerage accounts but forget the registered accounts. Every one of these is reportable.

Using the wrong exchange rate. The FBAR uses the Treasury Department’s end-of-year exchange rate, not the Bank of Canada rate, not the IRS average rate, and not the spot rate on the day of maximum value. The Treasury rate is published annually.

Reporting year-end balance instead of maximum value. The FBAR requires the highest balance during the year, not the December 31 balance. If you received a large transfer in June and spent it by December, the June balance is reportable.

Missing joint accounts. If your Canadian spouse is on your joint Canadian bank account (as they often are), you report the full balance of that account, not half. Your spouse, if they are also a US person, reports the same account on their own FBAR.

Not filing because “no tax is owed.” The FBAR is a reporting requirement, not a tax. It does not depend on whether you owe US tax. The filing obligation exists whether your accounts hold $15,000 or $5,000,000, and whether or not the income was taxable.

What if I am behind on FBARs?

If you have not filed FBARs for prior years, do not simply file them late without understanding the compliance options. The IRS offers several programs depending on your facts:

• Delinquent FBAR filing procedures: If you have no unreported income and the IRS has not contacted you, you can file the late FBARs with an explanation. No penalty if the failure was non-willful.
• Streamlined Foreign Offshore Procedures (SFOP): If you live outside the US and your failure was non-willful, you file 3 years of returns and 6 years of FBARs with no penalty.
• Streamlined Domestic Offshore Procedures (SDOP): If you live in the US and your failure was non-willful, you file 3 years of amended returns and 6 years of FBARs with a 5% miscellaneous offshore penalty.

The FBAR penalties decision tree walks through which program applies to your facts. The late FBAR analysis compares the two main options.

What should I do next?

If you are a US person with Canadian bank accounts, investment accounts, or registered accounts, check whether the aggregate maximum value exceeds $10,000 USD. If it does, you need an FBAR. If you are already filing, verify that every account is included (registered accounts are the most commonly missed).

• Form 8938 vs FBAR: do I file both?, the overlap between the two requirements
• FBAR penalties decision tree, the program choices if you are behind
• Late FBARs: delinquent or streamlined?, the main compliance paths
• FATCA explained, the law behind the reporting requirements
• IRS and CRA penalties for late filing, the full penalty landscape

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.