What Should You Do About the FBAR?
By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel
Whenever I mention the acronym FBAR, Americans often say one of two things: “F what??” or “I don’t need to do that.”
What’s an FBAR?
The “Report of Foreign Bank Accounts” (FBAR) is a required U.S. government form, which is important in the post-9/11 world. The purpose of the form is to alert the authorities about accounts held outside the United States with a total value of $10,000 or more at any time during the year.
Can I just skip it?
Bad idea. If you have reportable FBAR assets that you don’t disclose, the fines can be severe. If you neglect to file or file incorrectly, you can face fines that are greater than the value of the accounts that you didn’t include on the form.
The FBAR is due on June 30 for the preceding year. It provides a list of accounts that you have signature authority on, interest in, or are named as a holder, so the American government can track the path of money transfers in the hope of reducing money laundering.
Is there a legal workaround?
The only legal workaround is to have the sum of foreign assets below the reporting threshold. Since that is difficult if you have pension and/or savings accounts in Israel, another option is to minimize the number of accounts you must report. If you keep the majority of your assets in an American bank or brokerage account, you don’t need to list those funds on an FBAR. Why? Because the government only requires reports on foreign accounts.
If you want to review your investment accounts to see whether they’re considered to be in the U.S. or abroad, send me an email with the details (doug@profile-financial.com) or call (02-624-2788) and let’s begin a conversation.
Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.