The FBAR filing threshold generally looks at the aggregate maximum value of reportable foreign financial accounts. The accounts are considered together rather than applying the threshold separately to each account.
How the Aggregate Test Works
A taxpayer identifies the reportable foreign financial accounts held during the year and determines the maximum value of each account. The values are then considered together when testing whether an FBAR filing requirement exists.
Why Several Small Accounts Can Trigger Filing
A taxpayer may have no single foreign account above the reporting threshold but still have an FBAR requirement because the combined maximum values of several accounts exceed the threshold.
Maximum Value Matters
The relevant amount is generally the maximum value reached by each reportable account during the calendar year rather than simply the December 31 balance.
Foreign Currency Accounts
Foreign-currency account values generally must be converted to U.S. dollars using the applicable reporting rules. Accurate account statements and maximum-value information are therefore important when preparing the filing.
The FBAR Is Separate From Income-Tax Reporting
FBAR reporting is separate from Form 1040 and other federal income-tax forms. A taxpayer may have additional reporting obligations depending on foreign assets, foreign entities and foreign income.
Need Help With an FBAR?
See our FBAR filing service and FBAR filing questions.