If you are a U.S. citizen or a U.S. person living and working abroad in Australia, in addition to your IRS tax returns, you may have additional filing requirements you must complete. One of these is the Foreign Bank Account Report, or the FBAR. The experts at Evolution Tax and Legal are breaking down this Foreign Bank Account Report: what it is, who must file it, and how to file as an expat in Australia.
Who Must File FinCEN Form 114 (FBAR) in Australia?
FinCEN Form 114, or the FBAR, is a form that is used by the government to ensure that Americans living in Australia, and U.S. persons living worldwide, are honest about their worldwide assets and income. If you qualify to submit the FBAR, it must be submitted yearly.
If you are a U.S. citizen or green card holder and you’ve held a combined $10,000 or more in non-U.S. bank accounts at any time throughout the year, you must file the FinCEN Form 114. This is true whether you are working or retired as an expat in Australia.
FBAR Filing Requirements
Filing the FBAR is a different process than filing your tax returns, although they are similar in that they must be filed yearly and are reporting on the financial history of the calendar year prior. Unlike the tax return, which is filed with the IRS, the FBAR is filed with the Department of Treasury. For an easy submission process, you’ll need the following required information handy when filing FinCEN Form 114:
- Legal name on the foreign held account or accounts.
- The type of account.
- The name or address of the person or institution with which the account is held.
- The maximum value in each account during the FBAR reporting period. This will be converted to USD using the end of year exchange rate.
- The number and/or identifying designation of the account.
What Is the Due Date for Filing an FBAR From Australia?
Although the FBAR will not be filed jointly with your tax return, since it needs to be filed with the Department of Treasury, it will need to be filed on the same day as your IRS tax return. The due date for your tax return is the due date for your FBAR, and the deadline for expats in 2023 is April 18, with the FBAR having an automatic extension to October 16.
How To File the FBAR From Australia
To file the FBAR from Australia, you are able to fill out FinCEN Form 114 electronically and submit it through the BSA e-filing website. The process is straightforward, especially if you have the required information handy, as mentioned above. The information can easily be entered into the online system and submitted from anywhere, including Australia.
Penalties for Not Filing FBAR in Australia
The penalties for not filing an FBAR if you fall into the required categories can be severe. If your lack of filing was non-willful, meaning you did not know about the reporting obligation, the penalty per violation is typically $10,000, but can be higher depending on your account balance at the time of the violation.
If it is determined that you purposefully avoided filing the FBAR, the fine can be $100,000 or 50% of the amount that was in your foreign bank accounts at the time, whichever is greater. Penalties can add up quickly, and criminal charges may be filed depending on the severity of the infraction.
What Should I Do if I Live in Australia & Haven’t Filed an FBAR Before?
Even though the penalties are severe, if you are realizing you’ve been living in Australia and have not filed an FBAR before, you should not panic. There are amnesty programs put in place by the government to help you catch up. The Streamlined Compliance Program and the Delinquent FBAR Submission Procedures both are put in place to help expats comply with FBAR filing requirements without paying penalties.
Under the Streamlined Compliance Program, you’ll be required to certify that your failure to report was accidental and not willful. You must file your last 3 delinquent tax returns and pay any taxes that were owed on those returns, and you will be required to file all FBAR forms for the previous six years.
Under the Delinquent FBAR Submission Procedures you will also be required to certify that your failure to report was accidental and not willful. Then you will be required to file all delinquent FBARs with the Department of Treasury.
These amnesty programs are usually only available if initiated yourself, so if you noticed now that you should have been filing an FBAR and have not yet done so, it is worth looking into it prior to any inquiries from the IRS or Department of Treasury, which might remove your possibility for amnesty.
Need Help Filing an FBAR From Australia? Contact Evolution Tax and Legal
The FBAR process can be complicated: the information, deadlines and whether or not you need to file each year is something that can get overwhelming, especially coupled with your regular tax return. The Orange County expat tax lawyers at Evolution Tax and Legal can help. Contact our team for help filing for FBAR, FinCEN Form 114, from Australia today!