U.S. taxpayers are required to report their worldwide income; that is, income from both U.S. and foreign sources. In addition, taxpayers who have an interest in or signature or other authority over a financial account in a foreign country, such as a bank account, securities account, or other financial account are required to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if the aggregate value of all such financial accounts exceeds $10,000 at any time during the calendar year. The FBAR is not filed with your tax return. Instead, it is filed with the Department of the Treasury in Detroit, Michigan, no later than June 30 of the year following the calendar year reported.

Failure to report income in foreign bank accounts, or to file the FBAR, carries serious consequences including large monetary penalties and, in some case, criminal penalties.

If you have foreign accounts and are unsure whether you are required to file the FBAR, contact your tax professional to review your portfolio and advise you.