ANCPA Auditing is led by Ashraf Noureldin, a California licensed CPA. The firm prepares USA tax filings for people across the UAE and the GCC: USA citizens and green card holders, non-Americans with any USA income, active or passive, and anyone married to a USA citizen.
The FBAR
- Who files: anyone who is a USA person with accounts outside the USA worth more than USD 10,000 in total at any time in the year. That includes accounts you only sign on, such as your company's.
- The limit is the total of all your accounts. Two accounts of USD 6,000 each means both are reported.
- When: 15 April, with an automatic extension to 15 October. No request is needed.
- How: online through FinCEN's BSA E-Filing System, not with your tax return.
Form 8938
- Who files, if you live outside the USA and are not married, or married filing separately: your accounts and other foreign financial assets were worth more than USD 200,000 on the last day of the year, or more than USD 300,000 at any time in the year.
- Married filing jointly: more than USD 400,000 on the last day, or more than USD 600,000 at any time.
- How: attached to your USA tax return, and filed with it.
- Penalty: up to USD 10,000 for not filing, and USD 10,000 more for each 30 days after an IRS notice, up to USD 60,000 in all.
Many people file both
The two reports do not replace each other. A bank account in the GCC can appear on both. FBAR penalties are separate and change every year with inflation.
Missed years
Missed FBARs can often be caught up through the Streamlined procedures, with the penalties waived if you qualify.
FBAR and Form 8938 side by side
- Limit: FBAR, USD 10,000 at any time. Form 8938, USD 200,000 at year end or USD 300,000 at any time, doubled to USD 400,000 and USD 600,000 for a joint return.
- Where: FBAR online with FinCEN. Form 8938 with your tax return.
- What counts: FBAR covers accounts, including ones you only sign on. Form 8938 covers accounts and other foreign financial assets you own, such as shares in a company outside the USA held as an investment.
Questions to ask yourself
- Did my accounts outside the USA, added together, pass USD 10,000 at any time in the year?
- Do I sign on my company's bank account?
- Did my accounts and investments outside the USA pass USD 200,000 at the end of the year?
In short
- Most Americans in the Gulf with a salary account file the FBAR every year.
- Form 8938 starts at much higher amounts, and is filed with the tax return.
- Missed FBARs can often be fixed through the Streamlined procedures.
About the author
Ashraf Noureldin is a USA CPA (California) and UAE Tax Agent with more than 25 years in accounting, audit and tax. He founded ANCPA Auditing L.L.C, an audit and tax firm in Emirates Towers, Dubai. USA returns are prepared and signed in Dubai and e-filed through our USA associates in Texas and California. For a question about your own case, email info@cpaauditing.ae, call +971 4 319 7316 or WhatsApp +971 56 620 0575.
This article is general information only. It is not tax, legal or financial advice for any person or company. Take advice on your own facts before you act.