Foreign Bank Accounts

This won’t apply to too many individuals, but there are extremely high potential penalties involved, so it’s worth a quick read.

If you don’t already know this, the IRS requires individuals and businesses with foreign assets above certain thresholds to report them every year. There is no corresponding tax calculation. But as I mentioned above, the penalties for failing to report these assets are oddly high; up to 50% of the account balance, in some cases.

For more information about the reporting requirements, the IRS has a handy table comparing to two common reporting forms:Ā Comparison of Form 8938 and FBAR Requirements.

Note that there is still time to file, as the deadline for both forms is the due date of your return (with extensions).

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