Which option should I choose under 'Tell Us About Any Foreign Bank Accounts'?

[heather-hawthorn]

There are two options under this question (see below) and I am having a hard time determining which one I should select or if I should be selecting both. I am currently a student in Sweden and opened my bank account in the middle of 2016 in order to received my student loans. I am guessing the second applies to me since it seems to imply opening a new account whereas the first option sounds more like I had an existing bank account all day. Any clarification would be so very helpful!

Select any that applied to you at any time in 2016:
- I had a bank, broker, or other financial account in a foreign country.

- I signed on, or had other authority over, a bank, broker, or other financial account in a foreign country.

[GeoffreyG · Accepted solution]

Current US tax law actually has (2) separate reporting requirements for taxpayers who hold non-US financial assets in overseas accounts.

With respect to your direct question, you can check either (or both) of those question boxes in TurboTax, for your Swedish bank account, as they will -- eventually -- lead you to exactly the same place, and conclusion, in TurboTax.  Please continue reading for a further explanation.

Assuming that you do own a bank account or other financial assets in a foreign country (which is anywhere outside of the USA or its Territories), there are certain foreign financial account reporting requirements that you must meet annually, in addition to filing a primary tax return (Form 1040, etc.)

Specifically, there are two separate disclosure forms that may be required under US federal law; each also has different reporting rules.  One is known as IRS Form 8938, and can be attached to the relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  They both have different rules and requirements for their use.  For example Form 8938 is needed only if the value of the account is over $10,000.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:
 
https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

You are encouraged to read the IRS webpage at the address above, or at least skim over it.  If your Swedish student bank account has a lower valuation than those dollar figures, you don't even have to answer these TurboTax questions at all, and can skip them entirely by simply telling the program that "no," you don't have a foreign bank account.

But if you do need to meet one or both of these reporting requirements (Form 8938 or FinCen114), TurboTax will guide you if you answer the questions in the program correctly.

For this specific choice:

"- I had a bank, broker, or other financial account in a foreign country.

- I signed on, or had other authority over, a bank, broker, or other financial account in a foreign country."

you could select both statements and you would not be incorrect.  Once again, though, in the end it's really the dollar amounts in your account that trigger the reporting requirements (see again the IRS.gov webpage).

Thank you for asking this thoughtful question, and good luck with your academic studies.