— Why You Can Still Report Your Foreign Accounts for Past Years
U.S. tax residents—including U.S. citizens, green card holders, and individuals who meet the substantial presence test—are required to file FBAR (FinCEN Form 114) if they hold financial accounts outside the United States, including in Japan.
In practice, however, many people say things like:
“I’ve been filing my U.S. income tax returns every year, but I’ve never filed FBAR,” or
“I didn’t think my Japanese bank accounts were relevant.”
FBAR is not a tax payment form—it is a foreign account disclosure requirement.
However, failing to file it can result in significant penalties. That is why it is crucial to understand what to do now if you have never filed FBAR in the past.
FBAR Is Based on the Total — Not Each Account
One of the most common misunderstandings about FBAR is how the threshold is calculated.
FBAR is not determined by whether one specific account exceeds $10,000.
For example, it is not a rule like:
“$10,000 in Bank A is okay and $9,000 in a brokerage account is okay, so I’m safe.”
Instead, FBAR is triggered when the combined highest balance of all non-U.S. financial accounts exceeds $10,000 at any time during the year.
In other words, even if no single account exceeds $10,000, you must file FBAR if the total across all accounts exceeds $10,000 at any point—even for a single day.
This rule is explained clearly in a short video by ZEIFUKU-kun (Japanese only):
🎥“FBAR is NOT per account — the $10,000 rule is based on the total”
(This video is in Japanese.)
Why FBAR Filing Mistakes Are Common in the Year You Move or Transfer Funds
FBAR is not based on your year-end balance.
It is based on your highest balance at any time during the year.
For example, this can happen when you:
- Temporarily transfer a large amount of money in preparation for returning to Japan
- Consolidate multiple Japanese bank accounts into one
- Reorganize brokerage accounts or foreign-currency deposits
With this kind of activity, it is very common for your total balance to exceed $10,000 for only a few days.
Even if it feels temporary—“I moved it right back” or “it was only for a short time”—
FBAR rules look at that moment in time.
That is why the year before and after moving or making large transfers is when FBAR filing mistakes happen most often:
everything is driven by the highest balance rule, not by how much you ended the year with.
FBAR Can Be Filed Retroactively for Up to Six Years
This is one of the most important features of FBAR.
FBAR can be filed voluntarily for up to the past six years.
That means even if you have not filed FBAR for many years, you can still correct it now by filing all missed reports.
What matters most is whether you act before the tax authorities do.
In practice, the outcome is very different:
- Do nothing → The IRS discovers it during an audit → You become subject to penalties
- Voluntarily file past FBARs → Penalties may be reduced or even waived
This is why taking action sooner rather than later can make a significant difference.
Filing a U.S. Income Tax Return Does Not Replace FBAR
FBAR is a requirement that is separate from Form 1040 (your U.S. income tax return).
Even if your taxes were calculated correctly and you paid what you owed,
you are still considered non-compliant if you did not file FBAR.
In other words, the issue is not:
“Did I pay my taxes?”
but rather:
“Did I disclose my foreign accounts?”
This point is also explained in my YouTube video
🎥“Tax Checklist You Must Know Before Leaving the U.S.” (Japanese only):
(This video is in Japanese.)
Summary
FBAR is an annual filing requirement for anyone who holds:
- Bank or brokerage accounts in Japan (whether in yen or U.S. dollars)
- U.S. dollar–denominated deposits at Japanese banks
- Any investment accounts held at financial institutions outside the United States
It is also important to remember that:
- Not having filed FBAR in the past does not mean “it’s too late,” and
- In fact, the fact that it was not filed is exactly why taking action now matters.
If any of the following apply to you:
- You do not remember ever filing FBAR
- You had years when balances changed due to moving or transferring money
- You have multiple accounts in Japan
Then the best time to correct it is now—before anything triggers an inquiry.
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