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Filing FinCEN Form 114: What You Need to Know

Taxes aren’t just a once-a-year chore; they’re an ongoing responsibility. If you have any foreign financial accounts exceeding $10,000 at any point during the year, you need to know about FinCEN Form 114. This form is crucial for reporting those accounts and staying compliant with federal regulations.

The difference between tax preparation and proactive tax planning can save or cost you thousands of dollars. So let’s dig into what it takes to properly file FinCEN Form 114.

Key Takeaways:

  • Ongoing Responsibility: Taxes, including FinCEN Form 114 (FBAR), require ongoing attention for U.S. persons with foreign accounts exceeding $10,000.
  • Who Must File: U.S. persons, including individuals and entities with a financial interest or authority over foreign accounts exceeding $10,000, must file the form.
  • Required Information: The form needs personal details, account information, maximum account values, and financial institution details. Accurate reporting is essential to avoid penalties.
  • Filing Deadline: The filing deadline is April 15th, with an automatic extension to October 15th. Timely and accurate filing is crucial.
  • Resources and Compliance: Use the official instructions and the BSA E-Filing System guide for accurate filing. Keep records for five years and amend mistakes promptly.

What Is FinCEN Form 114?

If you’ve got foreign financial accounts, listen up. You might need to file a FinCEN Form 114, also known as the FBAR form. It’s all about reporting those foreign bank accounts and assets to the U.S. government. 

I’ve been there, navigating the world of international finance and trying to keep everything above board. Trust me, it’s not as daunting as it seems once you understand the requirements.

Who Needs to File FinCEN Form 114?

So, who exactly needs to file this FBAR report? In a nutshell, U.S. persons with a financial interest in or signature authority over foreign financial accounts that exceed $10,000 in aggregate value at any point during the calendar year. 

This includes individuals, corporations, partnerships, LLCs, trusts, and estates. If you’ve got a reportable foreign financial account, you can’t escape the long arm of the IRS.

What Information Is Required on FinCEN Form 114?

Now, let’s talk about what goes on in this form. You’ll need to provide your personal information, details about each foreign account, the maximum value of each account during the year, and the financial institution holding the account. 

It’s a bit of a scavenger hunt gathering all the necessary info, but it’s crucial to report accurately. The penalties for non-compliance can be steep, so don’t cut corners here.

When Is the Deadline to File FinCENForm 114?

Mark your calendars, folks. The deadline to file FinCEN Form 114 is April 15th, with an automatic extension to October 15th. If you’re scrambling to file at the last minute, you’re not alone. But trust me, it’s better to give yourself ample time to gather the required information and double-check your form for accuracy. 

I’ve learned the hard way that rushing through the filing process can lead to errors and headaches down the line. So, take a deep breath, grab a coffee, and tackle this FBAR filing requirement with plenty of time to spare.

Filing Requirements for FinCEN Form 114

Alright, let’s dive into the nitty-gritty of FinCEN Form 114 filing requirements. It’s not the most thrilling topic, but understanding these rules can save you a world of trouble later on.

Threshold for Reporting Foreign Financial Accounts

First things first, let’s talk about the reporting threshold. If the total value of your reportable foreign financial accounts exceeds $10,000 at any time during the calendar year, you must file FinCEN Form 114. 

This applies to the aggregate value of all accounts, not each account individually. So, even if you have multiple smaller accounts that add up to more than $10,000, you’re still on the hook for filing.

Signature Authority and Jointly Owned Accounts

Now, what about signature authority? If you have the power to control the disposition of assets in a foreign account owned by someone else, you may need to file FinCEN Form 114, even if the account isn’t in your name. For jointly owned accounts, each owner must file a separate form if the reporting threshold is met. It’s a bit of a paperwork party, but it’s essential to stay compliant.

Determining the Reportable Year

The reportable year for FinCEN Form 114 is the calendar year, from January 1st to December 31st. This means you’ll need to report the maximum value of each account during these 12 months. 

I know it can be a pain to track down historical account balances, but it’s a crucial part of the FBAR filing requirement. Don’t let poor record-keeping come back to bite you.

How to File FinCEN Form 114

So, you’ve determined that you need to file FinCEN Form 114. Now what? Don’t worry, I’ve got you covered with a step-by-step guide on how to navigate the filing process.

Accessing the BSA E-Filing System

First, you’ll need to access the BSA E-Filing System. This is where you’ll electronically file your FinCEN Form 114. Create an account, log in, and select the option to file an FBAR. 

It’s a fairly intuitive system, but if you run into any snags, don’t hesitate to reach out for help. There’s no shame in admitting that government websites can be a bit confusing at times.

Preparing and Submitting the Form Electronically

Once you’re in the system, it’s time to fill out the form. You’ll need to provide your personal information, details about each foreign account, and the maximum value of each account in U.S. dollars. 

Double-check your entries for accuracy, because mistakes can lead to unwanted attention from the IRS. When you’re confident everything is correct, submit the form electronically.

Batch Filing for Financial Professionals

If you’re a financial professional filing FinCEN Form 114 on behalf of multiple clients, you can take advantage of the batch filing option. This allows you to submit multiple forms at once, saving you time and hassle. 

As an enrolled agent, I’ve found batch filing to be a lifesaver when dealing with numerous clients with foreign financial accounts. It streamlines the process and ensures that everyone remains compliant.

Extensions and Late Filing of FinCEN Form 114

Life happens, and sometimes we miss deadlines. If you find yourself in the position of needing an extension or dealing with a late FinCEN Form 114, here’s what you need to know.

Automatic Extension for FinCEN Form 114

The good news is that there’s an automatic extension for filing FinCEN Form 114. If you can’t meet the April 15th deadline, you have until October 15th to file without needing to request an extension. 

This extra time can be a lifesaver if you’re scrambling to gather all the necessary information. But don’t use it as an excuse to procrastinate – the sooner you file, the better.

Additional Extensions for Natural Disasters

In the event of a natural disaster, the Treasury Department may grant additional extensions for filing FinCEN Form 114. These are typically announced through official IRS news releases and provide specific guidance for affected filers. 

If you’re in an area impacted by a hurricane, wildfire, or other disaster, keep an eye out for these announcements. They can provide much-needed relief during an already stressful time.

Consequences of Filing Late

Now, let’s talk about the elephant in the room: late filing. If you fail to file FinCEN Form 114 by the deadline (including extensions), you could face steep penalties. We’re talking up to $10,000 for non-willful violations and potentially much more for willful violations. 

It’s not worth the risk. If you realize you’ve missed the deadline, file as soon as possible and consider seeking the advice of a tax professional at Dimov Tax to help mitigate any potential consequences.

Recordkeeping and Amending FinCEN Form 114

Congratulations, you’ve filed your FinCEN Form 114. But the work doesn’t stop there. Recordkeeping and amending your form when necessary are critical components of staying compliant.

Recordkeeping Requirements for FinCEN Form 114

You’ll need to keep records of your foreign financial accounts and the FinCEN Form 114 you filed for at least five years from the due date of the report. This includes account statements, receipts, and other documents that support the information reported on the form. 

I know it’s tempting to shred everything once you’ve filed, but trust me, you’ll be grateful for those records if the IRS ever comes knocking. It’s better to have too much documentation than not enough.

Amending a Previously Filed FinCEN Form 114

So, what happens if you realize you made a mistake on a previously filed FinCEN Form 114? Don’t panic – you can file an amended report through the BSA E-Filing System. Be sure to include an explanation of the changes you’re making and why the amendment is necessary. 

It’s also a good idea to keep a copy of the amended form for your records. Remember, it’s always better to correct mistakes proactively rather than wait for the IRS to discover them. Being forthcoming and transparent can go a long way in demonstrating your good faith efforts to comply with reporting requirements.

Resources for FinCEN Form 114 Filers

Filing FinCEN Form 114 can be a daunting task, but thankfully, there are plenty of resources available to help you navigate the process.

Official FinCEN Form 114 Instructions

The first place to turn for guidance is the official FinCEN Form 114 instructions. These provide a detailed breakdown of who needs to file, what information is required, and how to complete the form accurately. 

I know it’s not the most thrilling read, but familiarizing yourself with the instructions can save you a lot of headaches down the road. Don’t be afraid to highlight, take notes, and refer back to them as needed.

BSA E-Filing System User Guide

If you’re new to the BSA E-Filing System, the user guide is your best friend. It walks you through the process of creating an account, navigating the system, and submitting your FinCEN Form 114 electronically. 

Even if you’re a seasoned filer, it’s worth reviewing the guide periodically to stay up-to-date on any changes or updates to the system. Trust me, there’s nothing worse than getting stuck on a technical issue when you’re trying to meet a deadline.

Final Thoughts

In every conversation about taxes and compliance, filing FinCEN Form 114 often feels like a looming task rather than a routine one. But it doesn’t have to be daunting if you’re prepared ahead of time.

This isn’t some Hollywood plot where missing out leads to dramatic consequences; it’s straightforward—file on time using the BSA E-Filing System, keep records for five years, amend when necessary—and you’re set. Embrace these steps today so that next April (or October), you’ll find yourself calmly clicking ‘submit’ instead of scrambling last minute. For more information or to work with highly experienced, qualified tax professionals, contact Dimov Tax today!

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