Fbar Joint Account Filing and Reporting Guidance for US Taxpayers

If you're a US taxpayer with a joint bank account, you're likely aware that you'll need to report the account on your FBAR. You'll need to file Form 114, Report of Foreign Bank and Financial Accounts, if the total value of your foreign financial accounts exceeds $10,000 at any point during the calendar year.

The account owner is responsible for reporting the account, but the account holder is also liable for the FBAR. This means that both parties could be held accountable for any errors or omissions on the form.

Joint account holders are considered "reporting individuals" and must report the account on the FBAR. This includes spouses, domestic partners, and other individuals who have a financial interest in the account.

The FBAR joint account is a bit tricky to navigate, but essentially, if you're a U.S. person with a joint account abroad, you'll need to file an FBAR if the total value of your foreign accounts was USD 10,000 at any point during the previous tax year.

You'll need to report all foreign accounts, not just the ones in your name, which can be a challenge if you have joint accounts with non-U.S. persons.

The FBAR originated with the Bank Secrecy Act, which was passed in 1970, and its purpose is to identify people engaging in money laundering and tax evasion.

This means that if you have a joint account with someone who is a U.S. person, you'll need to file an FBAR, even if the account is in their name.

The Bank Secrecy Act set up stringent financial reporting requirements to prevent untraceable large deposits into bank accounts, which was a major concern at the time.

When two or more persons jointly own a foreign bank or financial account, each of them has a financial interest in that account. This means each US person must report the account on their FBAR.

Each filer must indicate the principal joint owner of the joint account, even if this owner is not a US person. They must report the joint owner's address and tax identification number, whether it's a US or foreign number.

The joint owner must be disclosed on FBAR, regardless of their nationality.

Even though you may have to report the same joint account twice, FinCEN requires the FBAR filer to disclose the entire value of each jointly-owned foreign account on his FBAR.

If you own a joint account with another person, both parties must report the account on their FBAR. They must also indicate how many joint owners there are and identify information for other principal joint owners.

To report joint accounts, you and your partner can have your spouse sign FinCEN Form 114a to allow you to file the FBAR on their behalf, but only if you both hold joint accounts together.

If your spouse has other accounts that you are not on, they must file their FBAR separately, and you must both include your joint accounts on each of your individual forms.

Here are the key things to remember about reporting joint accounts on the FBAR:

If you're married and have joint accounts, you might be able to file a joint FBAR with your spouse. This can save you and your partner from having to file separate FBARs.

To qualify for this exception, you and your spouse must meet three conditions. First, all of your spouse's foreign financial accounts must be jointly owned with you.

The filing spouse may have additional accounts, but your spouse shouldn't have any other foreign bank and financial accounts. If one spouse is an owner of a foreign account, but the other spouse only has signatory authority over the same account, then separate FBARs must be filed by each spouse.

You must report the jointly owned accounts on a timely filed FBAR and use a PIN to sign item 44. This is a crucial step in taking advantage of the joint FBAR exception.

Both spouses must also complete and sign Form 114a, a Record of Authorization to Electronically File FBARs, which should be maintained with your filers' records.

Reporting the entire value of a joint account on the FBAR is a crucial aspect of compliance. The value of each jointly-owned foreign account must be disclosed, even if the same account is reported by multiple individuals.

FinCEN requires the FBAR filer to report the entire value of each jointly-owned foreign account, regardless of how many joint owners there are. This means that if you and your spouse have a joint account, you must report the entire value of that account, not just your portion.

If you have multiple signatories on an account, you are still considered to have some control over the account, and therefore, you must report it on your FBAR. Even if a transaction requires multiple signatories to sign off, you are still responsible for reporting the account.

Here's a key point to remember: you must report the entire value of each jointly-owned foreign account on your FBAR, not just your portion.

To file the FBAR for a joint account, you must file it electronically through FinCEN's BSA E-Filing System. This is a separate filing from your federal tax return.

You'll need to gather all the necessary information, including the name, address, and SSN/ITIN of each joint owner, as well as the name and address of each foreign bank or financial institution where you have an account or signature authority.

The FBAR requires you to list each type of account you have, the account number, and the maximum balance of the account for the calendar year. Make sure to convert the account balances into U.S. dollars using the U.S. Treasury foreign exchange rate as of the end of the calendar year.

To file the FBAR, you'll use FinCEN 114 and submit it electronically through the BSA e-filing site. You can have a third party prepare it for you, but you'll need to sign or e-sign FinCEN 114a to give the party authority.

Here's a quick checklist of the information you'll need to gather:

Failing to file an FBAR for a joint account can have severe consequences. The penalties can be substantial, starting at approximately $10,000 per violation, with the maximum penalty capped at $50,000 for non-willful violations.

If you're multiple years behind in FBAR filing, the penalties can accumulate rapidly, posing a significant financial risk. This is especially concerning for joint account holders, as the penalties can be assessed per account per year.

Willful failure to file an FBAR, indicating a deliberate attempt to avoid tax obligations, carries even more severe penalties, potentially exceeding $100,000 or amounting to 50% of the account balance at the time of the violation.

Failing to file an FBAR can result in severe penalties, with non-willful violations starting at approximately $10,000 per violation.

Non-willful violations can cause penalties to accumulate rapidly if you're multiple years behind in FBAR filing, posing a significant financial risk.

The maximum penalty for a non-willful violation is $10,000, indexed to inflation, as of 2024 the penalty is over $16,000.

Willful failure to file an FBAR carries more severe penalties, potentially exceeding $100,000 or amounting to 50% of the account balance at the time of the violation.

In a Supreme Court case known as the Bittner case, the IRS's maximum penalty for non-willful violations was capped at $50,000, a significant reduction from the original assessment of $2.72 million.

Willful violations can lead to criminal charges, including potential prison sentences, if the individual has also engaged in money laundering or other financial crimes that the FBAR is intended to prevent.

The IRS can fine U.S. persons for each unreported account in the case of willful penalties, but the Supreme Court ruled in February 2023 that non-willful penalties should be based on each report, not each account.

Don't panic if you haven't filed an FBAR! Millions of Americans have past-due forms, and the IRS has created two amnesty programs to help you get caught up.

The Streamlined Compliance Procedures and the Delinquent FBAR Submission Procedures are both designed to let expats comply with US tax law without paying any penalties.

You may qualify for a special compliance program to get back on track without penalties. Download our Streamlined Filing Eligibility guide to understand if you qualify.

The IRS has two options to help you catch up on your US taxes. Here are the details:

These programs are designed to help you get back on track with your US taxes without any penalties.

If you own a joint account with another person, both parties must report it on their FBAR. They must also indicate how many joint owners there are and identify information for other principal joint owners.

Even if you can't withdraw funds on your own, if you have any element of control over an account, you likely still have to report it on your FBAR. This includes accounts with multiple signatories that require a transaction to be signed off.

To stay on top of your FBAR filing requirements, keep a running list of all your foreign financial accounts and note the highest balance each account had throughout the year. If the total sum of these numbers is $10,000 or more, you must file an FBAR by April 15, or by October 15 if you file for an automatic extension.

If you have foreign financial accounts, you might be wondering if you're exempt from filing an FBAR. Fortunately, there are certain accounts that don't need to be reported.

Some accounts that are exempt from FBAR reporting include correspondent or Nostro accounts, which are accounts that allow international banks to exchange funds. Additionally, accounts owned by a government entity, an international bank, or a U.S. military banking facility are also exempt.

You don't need to file the FBAR if your foreign accounts are already reported on a consolidated FBAR, or if you and your spouse have only joint foreign accounts and you're filing on behalf of both of you.

Here are some specific accounts that are exempt from FBAR reporting:

If you have foreign bank and financial accounts, it's essential to report them accurately on your FBAR. Contact Sherayzen Law Office for professional help with US international tax compliance and FBAR reporting. We have helped hundreds of US taxpayers with their FBAR filings, including joint FBAR filings, and we can help you!

Both parties must report a joint account on their FBAR, and they must also indicate how many joint owners there are. They must also identify information for other principal joint owners.

Even if you cannot withdraw funds on your own, if you have any element of control over an account in a financial institution, you likely still have to report it on your FBAR. If a transaction requires multiple signatories to sign off, you are still considered to have some control over the account.

Staying on top of your FBAR filing requirements is fairly simple once you have a good system in place. You should have a running list of all of your foreign financial accounts and make a note of the highest balance the accounts had throughout the year.

If you and your partner only hold joint accounts, you can have your spouse sign FinCEN Form 114a to allow you to file the FBAR on their behalf. However, if your spouse has other accounts that you are not on, they must file their FBAR separately.

The Foreign Bank Account Report (FBAR) is an annual report that all US citizens, residents, and certain other persons must file with the United States Treasury Department if they have a financial interest in, or signature authority over, a foreign financial account with an aggregate value of more than $10,000 at any time during the calendar year.

You don't pay tax on the FBAR, it's a reporting requirement to inform the IRS about your foreign-held financial assets. Ignoring your FBAR requirements can result in penalties starting at $10,000 and legal consequences.

To file an FBAR, you'll need to provide information about your foreign accounts, including the name and address of each foreign bank or financial institution, and the maximum balance of each account for the calendar year. You should also have the name, address, SSN/ITIN, and account information for any joint owners of your foreign accounts.

If you own joint accounts, both parties must report the account on their FBAR, and you must indicate how many joint owners there are and identify information for other principal joint owners. Even if you can't withdraw funds on your own, if you have any element of control over an account, you're still considered to have some control over the account.

Here are some key differences between FBAR and FATCA:

FATCA requires individuals or businesses with foreign accounts meeting the reporting threshold of $50,000 to file Form 8938 with the IRS. This is different from FBAR, which requires reporting of foreign accounts with an aggregate value of more than $10,000.