Reporting Foreign Bank Accounts
You must report accounts you hold in foreign banks and other financial institutions if your total balance is $10,000 or greater.The $10,000 threshold is for your aggregate account balances. In other words, your total across all your foreign accounts.
If you earn dividends or interest in these accounts, that income is reported on Form 1040 Schedule B, and you would check the box in Part III Line 7a and indicate the country or countries where you have accounts. Additionally, any foreign taxes paid on your interest and dividends may qualify for the Foreign Tax Credit on Form 1116.
You report each foreign financial account you hold on Treasury Department Form 90-22.1 (PDF, 4 pages).
You will provide information on all your financial accounts held in foreign countries, including:
- Bank accounts
- Investment accounts
- Mutual funds
- Retirement accounts
- Securities and other brokerage accounts
Example: John and Lisa Smith are US citizens living and working in Switzerland. They have checking, savings, and retirement accounts in Switzerland. Their balances are $1,000 in checking, $2,500 in savings, and $8,500 in an annuity retirement fund. Since the total of all their accounts exceeds $10,000, they must file TD F 90-22.1 to report the accounts they own.
Foreign Pension Accounts
Foreign pension accounts may not have to be reported on the foreign bank account report. You only need to report those bank accounts which you own or have an interest in. Pension accounts that are owned and controlled by your employer or by a foreign government are not owned by you. While you hope to utilize those funds in the future, you have no control over those assets, and they do not count towards your $10,000 limit.However, retirement savings accounts which you own and control, such as accounts similar to individual retirement accounts, annuities, and 401k-type plans would need to be reported. "Generally, a right to a pension from an employer would not be reportable because all the employee has is an agreement from the employer to pay a pension. The employee does not have a financial interest in a financial account. If, however, the employer maintained a separate financial account with funds that the employee has a right to, then the employee may be required to file [Form 90-22.1] for the account. Therefore, retirement accounts that a person maintains with a financial institution, such as accounts that are similar to IRA accounts in the U.S., and annuity type accounts generally would be reportable," according to an IRS spokesperson in Washington, DC.
When to File
Treasury Form 90-22.1 is due June 30th of each year to report foreign bank accounts owned in the previous year.If you miss the filing deadline, that's not a problem. You should file TD F 90-22.1 to report your foreign bank accounts even if you miss the June 30th deadline. Why? There are very stiff penalties for willfully failing to file this report.
What should you do if you are filing the Foreign Bank Account Report (Form TD F 90-22.1) after the deadline? You should file the form, and you should attach a brief explanation of why you are filing late. While there are stiff penalties for failing to file the form, those penalties may be waived based on your particular situation. Under no circumstances should you not file Form TD F 90-22.1, since that would be a wilfull failure to fail. According to an IRS spokesperson in Washington, DC,
The law governing form TD F 90-22.1 "provides for a nonwillful penalty of up to $10,000 per violation for violations occurring after October 22, 2004. This penalty will be waived, however, if the person can show reasonable cause for the violation and if the person provides a late-filed [Form TD F 90-22.1] with the information that should have been reported earlier."IRS will consider the facts and circumstances of each case in determining whether penalties are appropriate. Persons who have not timely filed [Foreign Bank Account Reports] should attach a statement explaining why the [Form] was not timely filed."
Where to File
Do not mail TD F 90-22.1 with your tax return, and do not mail the form to the IRS.Mail your completed and signed TD F 90-22.1 to the Treasury Department at the following address:
Department of the Treasury
Post Office Box 32621
Detroit, MI 48232-0621
Alternatively, you may hand-deliver TD F 90-22.1 to any local office of the Internal Revenue Service, and they will forward the form to the Department of the Treasury.
Forms and Instructions
You can obtain TD F 90-22.1 (PDF, 4 pages) along with instructions for filling out the form from the IRS Website.
Table of Contents
TD Form 90-22.1 Essentials (page 1)
TD Form 90-22.1 Laws, Requirements, and Penalties (page 2)
