Should you pay someone to file US FBAR report for you?

If you're a US citizen, or permanent resident (aka Green Card holder), you probably know that you can't escape the long arm of the IRS just by moving overseas. You are required by US law to file a yearly tax return, and must declare your foreign earned income, whether or not you'll ever return to the US. Mad, eh!

This requirement is a little crazy if you ask me, and due to the complexity of international tax law (and the potential of income in 2+ countries) the filing requirements can get quite complicated. I've mentioned before how I used to always use TurboTax to file taxes, but while living in Ireland, I availed of the services of Taxes For Expats, when filing my US return. I've decided to lean on the expertise of these tax pro's for that very reason. I can't get my head around all the regulations, and it's not worth making a mistake.

FBAR (FinCEN Report 114)
In addition to filing taxes, you may also have other US filing requirements, the FBAR (Report of Foreign Bank and Financial Accounts) being one of them.

The FBAR must be filed by people who, at any point in the calendar year, had a combined value in their foreign financial accounts of greater than $10,000. Due to the sale of a car for cash, I hit that threshold at some point, so had to file.

Being the procrastinator that I am, I left it until today, June 28th, to file. June 30th is the deadline in 2016.
The reason I'm writing this blogpost though, is not to tell you how great I am at leaving things until the last minute, but to give you a very quick way to save some money when filing your own FBAR.

The tax service that I used, Taxes For Expats (which by the way I strongly recommend, and have had a great experience with), offers to file this form for it's customers, for a fee. Their fee for this service is currently $75. I'm guessing other tax providers charge a similar amount. When filing my taxes this year, I decided to decline this service option, and file the form myself. I had briefly looked at the form online a few months back, and decided, this is something I can do myself. And, was it...?

So should you file it yourself, or pay someone to do it for you?
To file the form yourself you just need to click through to the following url:  http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html
From there, you'll need to provide a few basic pieces of personal info, name, address, SS#, etc. Then you'll go through and add your foreign banking details, including the highest value for your combined accounts for the year.

I timed myself doing this earlier this evening, and from start to finish, it came to a grand total of just under 9 (yes nine) minutes. I don't know about you, but it takes me a lot longer than 9 minutes to earn $75.

I'll let you decide for yourself whether or not you should pay for this service, but I'm guessing it'll take you almost as long to gather the relevant information (bank account numbers, etc) and send it to your tax guy, as it will to just submit the form yourself. If you'd really prefer not to handle it yourself , then maybe it's worth a shot asking your tax service provider to "throw in" this quick filing as part of your overall tax filing costs.

I hope this helps!

image credit :Flickr/aidanmorgan

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7 Helpful Comments

  1. Profile photo of Kelsey

    Hi Liam,

    I have an account with AIB in Ireland and am an American citizen currently.

    If I have more than the equivalent of $10,000 USD in that account, and I must report it, does any further action get taken after that? Or do they simply want to know how much is in there?

    Kelsey

    • Profile photo of Liam

      Kelsey,
      To be honest, I don’t fully understand the full scope of the FBAR filing. What I do understand though, is that there can be pretty harsh penalties for not filing.

      From a PDF file linked on the following IRS page under ‘Educational Resources’:
      https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

      “Overseas financial accounts are maintained by U.S. persons for a variety of legitimate reasons, including convenience and access. The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is also a tool used by the United States government to identify persons who may be using foreign financial accounts to circumvent United States law.
      Information contained in FBARs can be used to identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad. “

      • Profile photo of Kelsey

        I see. I wasn’t sure how this worked but it looks like they really just want to investigate that it’s for a legitimate reason.

        • Profile photo of Liam

          Probably so, but in my opinion it is, an invasion of privacy for most people. Assuming most people are honest, of course 🙂
          Imagine if you lived outside of the US for decades…you’d still need to report this every year.

    • Profile photo of Liam

      p.s. the $10k threshold applies across accounts. e.g. if you had two Irish accounts with $5k in each, you’d still need to file.

      • Profile photo of maura2e

        Hi Liam – I’m also US citizen & maintain ~ 3000 euros pm in my BOI account and ~ 2000pm in my AIB account, does this mean that I would need to report this on a FBAR? I’m not clear what the aggregate amount means in this instance?
        Tx!
        Mary

        • Profile photo of Liam

          Mary,
          I’m not a tax pro or anything, but my understanding from reading the material is that if at any point in the year, your combined cash total in foreign bank accounts = the equivalent of $10,000, you must file the FBAR.

          I did not feel the need to pay someone, however if you are unsure, you should definitely consult a tax pro. TaxesForExpats.com have been my go-to…
          Hope this helps.

          Liam

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