If you are a U.S. citizen or Green Card holder living abroad, FATCA and FBAR are two compliance obligations you cannot afford to ignore. Failure to report can result in penalties starting at $10,000 per violation.

What is FATCA?

The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, requires U.S. taxpayers holding financial assets outside the United States to report those assets to the IRS. Foreign financial institutions are also required to report information about accounts held by U.S. persons.

FATCA reporting is done via Form 8938, filed with your annual tax return. The reporting thresholds vary depending on your filing status and whether you live in the U.S. or abroad.

What is FBAR?

The Foreign Bank Account Report (FBAR), formally known as FinCEN Form 114, requires U.S. persons to report foreign financial accounts if the aggregate value exceeds $10,000 at any point during the calendar year.

Unlike FATCA, FBAR is filed separately from your tax return — directly with the Financial Crimes Enforcement Network (FinCEN) — and the deadline is April 15, with an automatic extension to October 15.

FATCA vs FBAR: Key Differences

Common Mistakes to Avoid

• Assuming the foreign tax credit eliminates filing obligations — it does not. You must still file even if no tax is owed.
• Missing the FBAR threshold calculation — the $10,000 threshold applies to the aggregate of ALL foreign accounts, not each account individually.
• Forgetting foreign pension plans — these are often reportable under both FATCA and FBAR.
• Not reporting signature authority accounts — if you have signature authority over a foreign account, it must be reported on FBAR even if it is not your money.

How ITA Can Help

At ITA International Tax & Advisor, our compliance specialists assist U.S. expats worldwide with FATCA and FBAR filings, Streamlined Filing Compliance Procedures for late filers, and full U.S. tax return preparation from our offices in New York, Milan, London, Hong Kong, Shanghai and Miami.