For expats living and working abroad, tax season can become even more complicated with the addition of forms and additional filing requirements. One such form that is required for qualifying individuals living and working abroad is the Foreign Bank Account Report, or the FBAR. As a U.S. citizen or green card holder living in Germany, you may be required to file the FBAR in addition to your standard yearly tax return. 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 from Germany as an expat.
Who Must File FinCEN Form 114 (FBAR) in Germany?
FinCEN Form 114, or the FBAR, is a form that is used by the government to ensure that Americans living in Germany, and everywhere else in the world, are honest about their worldwide assets and income. Unlike your yearly tax returns, the FBAR is required to be filed with the Financial Crimes Enforcement Network, while your yearly tax returns must be filed with the IRS. Similar to the tax returns, though, if you qualify to submit the FBAR, it must be submitted annually.
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 FinCEN Form 114. This includes bank accounts in Germany or in other countries where you might hold assets. This is true whether you are working or retired as an expat in Germany.
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 report on the financial history of the calendar year prior. 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 Germany?
Although the FBAR will not be filed jointly with your tax return, since it needs to be filed with the Financial Crimes Enforcement Network, within 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 Germany
To file the FBAR from Germany, you’ll need 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 remotely, even from Germany.
Penalties for Not Filing FBAR in Germany
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 Germany & Haven’t Filed an FBAR Before?
Even though the penalties are severe, if you are realizing you’ve been living in Germany and have not filed the 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 are both put in place to help expats comply with FBAR filing requirements without paying penalties. Both will require you to certify that your non-compliance was not willful and then file the required previous FBARs to bring you up to compliance with IRS standards.
Need Help Filing an FBAR From Germany? Contact Evolution Tax and Legal
The FBAR process can be complicated: the information, deadlines, and whether or not you need to file each year are all things that can get overwhelming, especially when 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 your FBAR, FinCEN Form 114, from Germany today.