If I have two foregin bank accounts with a total of less than $50K USD, do I need to report them on my 1040?

[yatoshura]

I encountered this question about foreign assets and bank accounts in the 1040. However, my total is less than $50K USD so can I just ignore it and say I don't have any foreign accounts? If not, how should I report this? Will I be tax for it as income?

[DS30]

It depends -

Regarding Form 8938 filing requirements -

If you take the maximum amount for the 2017 calendar year for each account and convert these amounts to USD using the IRS year-rate and the value is not over $75,000 or if you take the year end amount and convert there amounts to USD using the IRS year-end rate and the value is not over $50,000 , then you will not have to report these amount on Form 8938 related to reporting foreign financial asset.

Even if your account are more than the above amounts and you do have a Form 8938 filing requirement, there is no tax liability just for reporting these foreign accounts. (It is just for IRS reporting purposes only.)

Please note - Just having any foreign bank accounts will require you to include a Schedule B Part III with your federal income tax return and you will need to let the TurboTax system know that you have these foreign accounts so that this Schedule B will be included with your filing.

According to the IRS regarding your Form 8938 reporting requirements -

Unmarried individual (or married filing separately): Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.

Married individual filing jointly: Total value of assets was more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.

Regarding your FBAR requirement -

If you have foreign financial accounts, you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR) if are a US citizen or resident and::

1. you had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

Foreign financial accounts consist of all foreign financial accounts that you own separately or jointly or for which you have signatory authority over (such as a foreign business account that is owned by the business but for which you can sign checks or redirect funds).

To be directed to the US Treasury Government Website to prepare a Report of Foreign Bank and Financial Accounts, click FBAR (TurboTax does not support this form)

Here is a link to the IRS related to both the FBAR filing and the Form 8938 filing: IRS - Comparison of Form 8938 and FBAR Requirements