Reporting Foreign Income and Assets – Did You Know?

The IRS generally requires taxpayers to report both their income from foreign sources and any assets they hold outside the U.S. (such as a foreign bank account). Foreign income may include earned income like wages, a salary or self-employment earnings, as well as unearned income like interest or dividends. Taxpayers who qualify for the Foreign Earned Income Exclusion or Foreign Tax Credit must still report their income on a U.S. tax return to claim these benefits.

Even if you did not receive any income from foreign sources in 2022, you may still need to report foreign assets like bank and investment accounts on your tax return. In most cases, you must also file an FBAR form (Report of Foreign Bank and Financial Accounts) if the total value of your foreign assets exceeded $10,000 at any point in 2022. The FBAR filing deadline is April 15, 2023, however, if you are unable to meet this deadline, FinCEN offers an automatic extension until Oct. 15, 2023. Note that the FBAR is NOT an IRS form, and cannot be filed with your tax return. Instead, FBAR forms must be submitted separately to the Financial Crimes Enforcement Network (FinCEN).