Every year, thousands of Americans living abroad are required to file the FBAR (FinCEN Form 114), yet many underestimate its importance until it is too late. Unlike an income tax return, the FBAR is not about paying tax. It is a mandatory disclosure report required under the Bank Secrecy Act for U.S. persons who have a financial interest in, or signature authority over, foreign financial accounts whose combined value exceeded $10,000 at any point during the year.

For Americans living in Spain and other countries outside the United States, FBAR compliance is one of the most important international reporting obligations.

What Accounts Must Be Reported?

The reporting requirement applies to the combined value of all foreign accounts, not to each account individually. If the aggregate value exceeded $10,000 for even a single day during the year, an FBAR filing is generally required.

Examples include:

• Checking accounts
• Savings accounts
• Investment and brokerage accounts
• Certain pension or retirement accounts
• Accounts over which you simply have signature authority
• Jointly owned foreign accounts

Many taxpayers are surprised to learn that an account with very little money at year-end may still need to be reported if its balance was higher at any point during the year. This is why maximum account balances are essential information for preparing an accurate FBAR.

Why We Need Your Maximum Balances

One of the most common reasons for delays in FBAR preparation is that clients wait until the last minute to obtain maximum balance information from their banks.

The FBAR does not ask for the year-end balance. It requires the highest value of each account during the calendar year. Obtaining this information can take time, particularly if:

• You have multiple banks.
• You changed banks during the year.
• You closed accounts.
• Your bank statements are not readily available online.
• Some accounts are held outside Spain.

For this reason, we strongly encourage all clients to begin gathering this information now rather than waiting until October.

The October 15 Deadline Is Not a Target Date

Although the FBAR is due on April 15, an automatic extension is granted until October 15 without filing any extension request. Unfortunately, many taxpayers incorrectly view October 15 as the date to start thinking about the FBAR. In practice, October should be viewed as the final safety net, not the intended filing date.

Waiting until the last few weeks before the deadline often leads to:

• Missing bank information.
• Incomplete account lists.
• Last-minute corrections.
• Increased stress.
• Greater risk of filing errors.

Providing your information well in advance allows us sufficient time to verify the data and ensure that your filing is complete and accurate.

FBAR Penalties Can Be Severe

The U.S. government treats FBAR compliance very seriously.

Failure to file may result in substantial penalties, even when no tax is due. The IRS and FinCEN have authority to impose significant civil penalties for non-compliance.

Many taxpayers assume that because their foreign accounts generate little income, the FBAR is not important. This is a dangerous misconception.

The FBAR is an informational filing requirement, and its penalties exist independently of any tax owed.

The simplest and safest approach is straightforward: File accurately and file on time.

Special Attention for Corporate Officers and Employees

A frequently overlooked issue involves individuals who have signature authority but no ownership interest in company accounts.

Examples include directors, corporate officers, financial controllers, treasurers and any employee authorized to sign on to business bank accounts.

Even when the money does not belong to you personally, an FBAR filing obligation may still exist if you have authority to control or direct the disposition of funds in foreign accounts.

The Special Case of Individuals with More Than 25 Accounts

Business owners, executives, and finance professionals often have signature authority over a large number of accounts.

When a filer has authority over more than 25 reportable accounts, special FBAR reporting procedures may apply. However, this does not eliminate the filing requirement. Detailed records must still be maintained, and account information must be available if requested.

If you believe this situation may apply to you, it is especially important to contact us as early as possible so we can determine the correct reporting approach.

What We Need from You

To ensure a timely and accurate filing, please send us:

1. A list of all non-U.S. financial accounts.
2. The name and address of each financial institution.
3. The account number.
4. The highest balance during the year.
5. Information regarding any accounts over which you have signature authority.
6. Details of any accounts opened or closed during the year.

You can also use our Excel to help you to gather all this information The earlier we receive this information; the more time we have to review it carefully and avoid last-minute issues.

Don’t Wait Until October

Every year we see taxpayers scrambling to obtain account balances just days before the filing deadline. In some cases, banks cannot provide the necessary information quickly enough.

The FBAR is one of the most important international reporting obligations for U.S. taxpayers abroad. Gathering your account information today can help avoid unnecessary stress, filing errors, and potentially costly penalties tomorrow.

If you have not yet provided your maximum account balances, we strongly encourage you to do so as soon as possible so that your FBAR can be prepared and filed well before the October 15 deadline.

Ensuring compliance not only avoids penalties but also allows you to take advantage of available tax relief mechanisms, ultimately optimizing your global tax position.

For more information, you can contact us US Tax Consultants. Do not hesitate to contact us by phone at +34 915 194 392, by email at info@ustaxconsultans.es , or through a free consultation, which can be booked via the “Book a free appointment” link on our website.

Antonio Rodriguez – US Tax Consultants