Moderate Foreign Account Reporting (10K-200K)

Foreign accounts between $10,000 and $200,000 trigger mandatory FBAR filing and likely FATCA reporting, with penalties starting at $10,000 for non-filing. This is the range where reporting obligations become serious and cannot be missed.

FBAR filing is required. Once aggregate foreign account balances exceed $10,000 at any point during the year, you must file FinCEN Form 114 by April 15 (automatic extension to October 15). This is filed separately from your tax return, directly with FinCEN. The penalty for non-willful failure to file is up to $12,500 per violation; willful violations can reach $100,000 or 50% of account balance per account per year.

FATCA Form 8938 is likely required. For taxpayers living abroad, Form 8938 is triggered at $200,000 in foreign financial assets at year-end or $300,000 at any point (single filers). If your accounts are near the upper end of this range, you almost certainly meet the threshold. Form 8938 is filed with your tax return, not separately.

Penalties for non-filing are severe. FBAR penalties alone can exceed the account balance. The IRS has been increasingly aggressive about international information return penalties. A $50,000 account with three years of missed FBARs can generate $37,500 in non-willful penalties before any tax due is calculated.

Interest and dividends require reporting. Income earned in foreign accounts is taxable on your US return regardless of whether it stays abroad. Your CPA must report foreign interest, dividends, and capital gains.

The pitfall: Assuming that because you pay taxes in your country of residence, you do not owe anything to the US. Foreign taxes reduce your US liability through the Foreign Tax Credit, but the reporting obligations exist independently of whether any US tax is owed.