Do I have to report NRE and NRO accounts on FBAR?

Yes. NRE, NRO, FCNR, savings, fixed deposits, and demat accounts are all foreign financial accounts. The fact that NRE interest may be tax-free in India under the treaty is irrelevant to FBAR; the accounts must still be disclosed.

What is the difference between FBAR and FATCA Form 8938?

FBAR (FinCEN 114) is filed separately with FinCEN when foreign accounts exceed $10,000. FATCA Form 8938 is filed with your tax return when specified foreign financial assets exceed higher thresholds that vary by filing status and residence. Many people must file both, and they carry separate penalties.

Are Indian mutual funds a problem for US tax?

Yes. Indian mutual funds, including ELSS, are generally treated as PFICs by the IRS and require a separate Form 8621 for each fund every year, with punitive default taxation unless a QEF or mark-to-market election is made. This is one of the most commonly missed filings for NRIs.

The $10,000 threshold is the max balance at any moment — not year-end

FBAR & FATCA Filing for Foreign Account Holders

If you are an NRI or a US person with accounts in India or abroad, the US wants to know about them. Cross $10,000 across all foreign accounts and you owe an FBAR. Hold Indian mutual funds and you likely owe PFIC Form 8621 too. We file all of it correctly — and quietly fix past years.

See What I Need to File I Never Filed Before

United States

Canada

India

FBAR vs FATCA: They Are Not the Same

These two filings overlap but are separate, with separate thresholds and separate penalties. Many people need to file both.

FBAR — FinCEN Form 114

Filed with FinCEN, separate from your tax return

→Triggered when foreign accounts total over $10,000 at any point in the year
→Covers bank, NRE, NRO, FCNR, fixed deposits, and demat accounts
→Filed electronically through the BSA E-Filing System
→Non-willful penalties start around $10,000 per violation

FATCA — Form 8938

Filed with your Form 1040 tax return

→Higher thresholds that vary by filing status and US vs abroad residence
→Covers specified foreign financial assets, including some not on FBAR
→Penalty of $10,000, rising to $50,000 for continued failure
→Often filed together with FBAR for the same accounts

$10K

FBAR threshold

Aggregate across all foreign accounts, max balance at any time.

8938

FATCA form

Filed with your return when assets exceed FATCA thresholds.

8621

PFIC form

One per Indian mutual fund, every year you hold it.

Oct 15

FBAR deadline

Due April 15 with an automatic extension to October 15.

What We File for You

FBAR (FinCEN Form 114) for all NRE, NRO, FCNR, savings, deposit, and demat accounts
FATCA Form 8938 statement of specified foreign financial assets
PFIC Form 8621 for Indian mutual funds, with QEF or mark-to-market election analysis
Form 1116 Foreign Tax Credit and Form 8833 treaty positions under the India-US DTAA
Coordination with your Indian CA on Form 67 and ITR so both sides reconcile

Never Filed? Catch Up the Safe Way.

If your failure to file was non-willful — which is true for most people who simply did not know — the IRS offers structured amnesty paths to get current with reduced or no penalties. The key is to come forward before the IRS contacts you.

Streamlined Filing Compliance Procedures

For non-willful taxpayers. File three years of amended returns and six years of FBARs with a certification of non-willfulness. The offshore penalty is reduced or waived for those living abroad.

Delinquent FBAR Submission Procedures

If your income was already reported and only the FBARs are missing, you can file the late FBARs with a reasonable cause statement, often with no penalty.

FBAR & FATCA FAQs

What is FBAR and who must file it?

FBAR is the Report of Foreign Bank and Financial Accounts (FinCEN Form 114). Any US person must file if all foreign accounts together exceeded $10,000 at any point in the year. The trigger is the maximum balance at any moment, not the year-end balance.

Do I report NRE and NRO accounts?

Yes. NRE, NRO, FCNR, deposits, and demat accounts are all reportable. NRE interest being tax-free in India under the treaty does not exempt the account from FBAR disclosure.

How is FATCA different from FBAR?

FBAR is filed with FinCEN at a $10,000 threshold. FATCA Form 8938 is filed with your tax return at higher thresholds that vary by filing status and where you live. Many taxpayers must file both, and each carries its own penalty.

Are my Indian mutual funds a problem?

Usually yes. Indian mutual funds, including ELSS, are generally PFICs and require a separate Form 8621 per fund each year, with harsh default tax unless a QEF or mark-to-market election is made. It is one of the most commonly missed NRI filings.

I never filed. What now?

If your failure was non-willful, the Streamlined Filing Compliance Procedures or Delinquent FBAR Submission Procedures let you catch up with reduced or no penalties. Coming forward before the IRS contacts you is essential.

Let's Sort Out Your Foreign Accounts

A 30-minute call covers your accounts, what you need to file, and whether a catch-up program fits. No commitment.

info@ilmcpa.com +1 (206) 209-8210