Form 114

Report Of Foreign Bank And Financial Accounts

Introduction
U.S Residents, citizens and entities are required to file Form 114. Who has at least one foreign financial account such as brokerage, mutual fund and if they had financial interest and the total values exceeding $10,000 at current financial year/calendar year he/she must report the same to Treasury Department and should keep records.


When to File
You must file the Form 114 before April 15 in every calendar year including with your personal tax return (Form 1040). If not able to file on or before due date you can get automatic extension till October 15. The Form 114 must file electronically through FinCEN(Financial Crimes Enforcement Network) and don’t file the return with Federal tax return. You can also get paper file option.


Details needed to file
If you want to file Form 114 you must keep the records below for five year from the due date of the FBAR.
⦁ Name and address of the foreign bank.
⦁ Name on the account.
⦁ Account number.
⦁ Type of account and
⦁ Maximum value during the year.
⦁ Foreign financial account balance should be converted to US dollars before entering.
Except one who file the FBAR directly to an employer’s foreign financial account doesn’t need to personally keep records on these accounts. The employer must keep the records for these accounts.


Exception to file the Form 114 as below.
⦁ IRA owners and beneficiaries.
⦁ One who gets retirement plans benefits.
⦁ Foreign financial accounts owned by a government entity and owned by International financial institution.
⦁ One who hold the Correspondent/Nostro account.
⦁ Foreign financial accounts maintained on a U.S. military banking facility and Trust beneficiaries.


Penalties
If you fail to report the Form 114, you may be subject to civil monetary penalties and/or criminal penalties for FBAR for violations. The penalty is Minimum $500 and maximum up to $1000000, it may be changed (adjusted annually for inflation) (https://www.irs.gov/pub/irs-pdf/p5569.pdf).

Form 114

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