You can’t avoid death or taxes, and if you are an American citizen or recognized alien, you can’t avoid reporting your Japanese bank accounts to the American government. Under the United States tax system, your worldwide income is taxable, even if earned in Japan. And to make sure you aren’t skirting any rules about your income or assets, you are required to document all of your foreign bank accounts for the US Treasury Department each year. This applies to anyone who has more than $10,000 total in non-US accounts, even if they don’t have non-US income.
Reporting is done through that department’s “Financial Crimes Enforcement Network,” using their “FinCEN Form 114,” a name even less memorable than your typical IRS document. Some people call this the “FBAR” form, although I’m not sure that that helps.
If your overseas funds never go beyond $10,000 at any time during the year, you don’t need to submit Form 114. But if you crossed that threshold even for one day, you must file the form electronically. This submission is done through the “BSA E-Filing System” web site. Here is the information you need to submit with the form.
- Your basic identity details: name, address, Social Security Number, date of birth, etc. For business that must file, supply the relevant business identification values instead.
- The maximum dollar amount equivalent held in each reported account at any point during the year.
- The account number, plus contact information for the bank holding each reported account.
You will provide this info for any individual or join bank accounts that you hold overseas. If you have funds in non-bank assets, you should talk to a tax professional to determine when and how to report such amounts. (Note that I am not an accountant or tax professional, and you should use the information in this article only as a starting point for researching your own tax and asset reporting needs.)
Details about filing requirements appear on the FinCEN web site, but this alternative summary on the IRS web site provides clearer directions. The IRS also has information about its own Form 8938, a related document that is more focused on high-value overseas assets.
The FinCEN Form 114 is due by April 15 each year. It only applies to those who are US citizens, Green Card holders, business entities, and resident aliens of the United States. If you fall into any of these groups, be sure to incorporate this separate US Treasury form when you process your annual income tax paperwork.
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