Fbar when filing jointly taxes with spouse

[aosoriol]

I have filled my tax returned jointly with my wife since she did not work last year. However, my wife and I have foreign bank accounts since we both worked in some other countries previously. Should I file just one FBAR for me? Should we (my spouse and I) file one FBAR each one of us separately? Is there any way I can file just one FBAR for my wife and I only with my signature? The FBAR website is not clear at all about this matter. Please, if anybody knows about this topic, help me. Thanks

[GeoffreyG · Accepted solution]

In fact, there are two separate disclosure forms that may be required for taxpayers who hold foreign financial (and other) assets overseas; 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 (a.k.a. FBAR) which can only be filed via the internet.  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

Form 8938 is included in TurboTax.  FinCen Form 114 is not included in TurboTax, and you would need to access that reporting webpage separately, if your foreign financial assets total over the limit(s).  Note that you can get to the FinCen reporting internet site directly through the above IRS link.

With respect to filing these disclosure documents, and in direct answer to your original question, IRS Form 8938 can be filing jointly, and using the TurboTax program.  With respect to FinCen Form 114 (the FBAR requirement), you can file this document together, jointly, as a married couple, so long as all of the foreign accounts you own are held jointly.  If some accounts are held in the name of one spouse only, however, then you would each need to fill out your own, separate, Form 114.

This is according to the current (2016) FinCen Form 114 rules, which we researched for this answer.  While the FBAR instructions may be somewhat hard to read on the topic of joint accounts, the preceding paragraph accurately summarizes them, with respect to joint account reporting, and the need to file one (or two) FinCen Forms 114.

Thank you for asking this important question.

[aosoriol]

Thanks for your answer, it is very valuable. After reading your comments, now I have a concern since I already submitted last week my 2016 tax return and I did not know I had to submit the IRS Form 8938 along with it, because I only thought I had to submit the FBAR. What should I do now? Thanks again

[GeoffreyG]

Hello aosorial:

The solution to your question is a little inconvenient, but also very straightforward.

What you should do is to immediately file an Amended tax return for the 2016 tax year, and then attach a completed Form 8938 to it.  You don't need to make any other changes to your original tax return (unless you do for something else).  As for a reason for amending, in the description field for Form 1040X you can enter something like "To Add Form 8938 Disclosure, Not Included With Original Return."

Instructions on how to start with amending a tax return in TurboTax 2016 can be found at the following link:

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3061514-how-do-i-amend-a-2016-return-in-turbotax">https://ttlc.int...>


I've also added a (new) screen-capture image to my original answer for your reference as well (it is a copy of the relevant section of Page 1 of the Form 8938 instructions booklet).  Simply click the icon to open.

Thank you.

[aosoriol]

Thank you for your answer, however I am a bit confused now. You said I must submit immediately a Form 1040X to amend my tax return but I have read through the Form 8938 and there are different thresholds. Particularly for individual taxpayers who live in the US the threshold is $50k and for marriages who file jointly it is $100k. The second one is my case and I am below that threshold. In that case, am I ok without submitting the Form 8938? Should I still submit the FinCEN Form 114 at any case? Thanks again

[GeoffreyG]

Hello aosoriol:

You are quite correct in that if you are below the filing threshold balance ($100k if MFJ) for IRS Form 8938, then you don't need to file it in any instance . . . not with an original tax return or an amended tax return (I previously was unaware of the size of your accounts).  However, as you will have noticed if you read the IRS.gov webpage at the link provided previously, the dollar reporting threshold for FinCen Form 114 is substantially lower than for Form 8938 (with a balance of just $10,000 on any day during the year).

Because of these differences, many taxpayers find that they have FinCen Form 114 disclosure obligation, but not an IRS Form 8938 filling obligation.  This may include you as well.

Thank you for asking for this important clarification.

[aosoriol]

Thank you very much GeoffreyG! Now it is absolutely clear to me!

[aosoriol]

I have a last minute quick question for you GeoffreyG. One of the foreign bank accounts I had was cancelled last year and the remaining balance was transferred to other existing bank account. Since the old bank account does not exist any longer and the total accumulative balance remains the same, should I only report the most current existing bank account? How about the cancelled one, should it be reported as well? Thanks

[GeoffreyG]

Hi aosoriol:

That's actually a fairly common follow-up question you have.  The answer to it is that you should "disclose" the existence of all bank accounts, even if you closed one and transferred the balance during the year.  Please refer to the following AnswerXchange thread, where this same issue is addressed for another taxpayer, under circumstances similar to yours.  I believe you will find that discussion (and screen-capture images) rather helpful:

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3716206">https://ttlc.intuit.com/questions/3716206</a>

Thank you.

[aosoriol]

Thank you so much

[YoungNikki]

Actually, a spouse is usually NOT required to file an FBAR.  
See the following info from the Fin Cen site <a rel="nofollow" target="_blank" href="https://www.fincen.gov/filing-spouse">https://www.fincen.gov/filing-spouse</a> as follows:

The spouse of an individual who files an FBAR is not required to file a separate FBAR if the following conditions are met: (1) all the financial accounts that the non-filing spouse is required to report are jointly owned with the filing spouse; 2) the filing spouse reports the jointly owned accounts on a timely filed FBAR electronically signed; and (3) the filers have completed and signed Form 114a, “Record of Authorization to Electronically File FBAR’s” (maintained with the filers’ records). Otherwise, both spouses are required to file separate FBARs, and each spouse must report the entire value of the jointly owned accounts.