US Citizens in Israel and the FBAR
This article addresses US citizens in Israel and the FBAR procedure.
Did you know that if your Israeli bank account has a balance of $10,000 at any point during the tax year, you are required to file a FBAR? If you fail to file an FBAR, you can face thousands of dollars in fines. You can avoid this headache by making FBAR filing and US income tax return filing part of your annual responsibilities.
What Is an FBAR?
An FBAR is a Foreign Bank Account Report. The FBAR notifies the Internal Revenue Service (IRS) of money US citizens or permanent residents have in foreign bank accounts. Essentially, it exists to help the US make sure its citizens are not holding offshore accounts and evading paying taxes. If you meet the following three conditions, you are required to file an FBAR:
- You are a US citizen or have a US Green Card.
- You have signing authority over a foreign bank account (this can include, for example, if you are a signatory on your employer’s bank account).
- The foreign bank account totaled $10,000 or more at any point during the tax year. (For example, if the bank account had $10,000 in it for one day and the next day you spent the money to make sure it went below $10,000, you would have to report it.)
What Do I Need to Do?
The FBAR must be submitted online on a yearly basis if you have $10,000 or more in your bank account at any time in the given tax year. Even if you have multiple bank accounts, and together the balance is $10,000 or more, you must file an FBAR.
If you are a US citizen or Green Card holder, you must file your FBAR by April 15, although there’s an automatic extension until October 15. This can be done through the BSA E-Filing System. You can do this yourself, or a third party can prepare it for you.
If you need help filing your FBAR, your annual US tax return, or if you have questions about responsibilities US citizens in Israel are obliged to fulfill, please contact us.
Advocate James Cohen has extensive experience helping US citizens and Green Card holders in Israel with their tax and FBAR obligations, and he would be happy to discuss your situation with you.