topic Re: Foreign account? in Get your taxes done using TurboTax

Foreign account?

LucaX — Wed, 02 Apr 2025 18:29:51 GMT

I have a small digital wallet in my home country that I use when I travel back. The balance of that account has been less than $150 throughout the whole year as it is only used sparingly.

Should I reply yes to the question about having a financial account located in a foreign country?

It is only used as a prepaid account, with no income, interest or distributions.

Re: Foreign account?

JamesG1 — Wed, 02 Apr 2025 18:46:02 GMT

If this is your only foreign account, you do not have to reply Yes to the question about having a financial account located in a foreign country.

Refer to the IRS website Comparison of Form 8938 and FBAR requirements.

FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) requires an aggregate value of financial accounts exceeds $10,000 at any time during the calendar year.

IRS Form 8938, Statement of Specified Foreign Financial Assets requires a total value of assets more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.

Re: Foreign account?

LucaX — Wed, 02 Apr 2025 18:58:37 GMT

Thanks! Just to clarify, this is about Schedule B, Part III, question 7a.

Re: Foreign account?

LucaX — Wed, 02 Apr 2025 19:06:21 GMT

It should also be noted the digital wallet can receive transfers and deposits, as well as has a debit card associated with it. Not sure if that changes things.

Re: Foreign account?

JamesG1 — Wed, 02 Apr 2025 19:16:01 GMT

IRS Schedule B Part III refers to the FinCEN Form 114.

Refer to the FinCEN requirements:

Aggregate value of financial accounts exceeds $10,000 at any time during the calendar year. This is a cumulative balance, meaning if you have 2 accounts with a combined account balance greater than $10,000 at any one time, both accounts would have to be reported.

Re: Foreign account?

LucaX — Wed, 02 Apr 2025 19:52:20 GMT

Right. But I think there's two checkboxes as a part of it. Question 2 in 7a is about FinCEN Form 114. That is definitely a no for me given the balance of the account.

Question 1 seems to ask this regardless of balance, but I am not sure if the account falls under the definition being asked for foreign financial account.

Re: Foreign account?

JamesG1 — Wed, 02 Apr 2025 20:06:26 GMT

This TurboTax Help may provide more guidance.

Re: Foreign account?

LucaX — Wed, 02 Apr 2025 20:47:16 GMT

Yeah, but that is about FinCEN Form 114. That one I know does not apply here. This is entirely about Form 1040 Schedule B Part III 7a Question 1.

Re: Foreign account?

MaryK4 — Wed, 02 Apr 2025 20:55:21 GMT

Question 7a requires you to report if you had a financial interest or signature authority over a financial account in a foreign country. In your case, the answer would be Yes. Digital wallets can be demand accounts which are reportable financial accounts. @LucaX