FBAR: Reporting Korean Bank Accounts to the US

An FBAR (FinCEN Form 114) is an information report, not a tax return — you can owe nothing in tax and still be required to file one. If you are a US person and the combined high balance of your foreign financial accounts crossed USD 10,000 at any point in the year, the obligation is triggered. For Korean-Americans and Korean nationals living in the US, an ordinary 예금 account in Korea is a foreign financial account for this purpose.

Who this affects

US citizens and green card holders holding accounts in Korea, wherever they live
Korean nationals who meet the US substantial presence test
Anyone with signature authority over a Korean account they do not own — including a parent's or company account
Holders of Korean 예금, 적금, brokerage, and certain insurance or pension products

(001)

The threshold is aggregate and it is a high-water mark

You do not test each account separately, and you do not use the year-end balance. Add the highest balance each account reached during the year; if that combined figure passed USD 10,000 even for a single day, every account is reportable — including ones that never held much on their own.

(002)

It is filed separately from your tax return

The FBAR goes to FinCEN through the BSA E-Filing system, not to the IRS with Form 1040. Filing a return does not satisfy it, and a preparer who only handles your return may never have asked about foreign accounts.

(003)

FBAR and Form 8938 are different obligations

They overlap heavily but have different thresholds, different filers, and different agencies. Being under the threshold for one says nothing about the other, and many people in the Korea–US situation must file both.

(004)

Penalties distinguish wilful from non-wilful

The penalty regime is significantly harsher for wilful failures. Because the distinction turns on your knowledge and conduct, someone who realises they have missed past years should get advice before filing late rather than quietly submitting them.

Common questions

I already pay tax in Korea. Do I still file an FBAR?

Yes. The FBAR is an information report and is unrelated to where you pay tax. Paying Korean tax on the interest does not remove the US reporting obligation.

My Korean account has almost no money in it. Is it exempt?

Not necessarily. The test aggregates the high balance across all your foreign accounts. A near-empty account still gets reported if the combined total crossed the threshold.

Does an FBAR mean I owe US tax on the account?

No. The FBAR itself creates no tax. Any tax consequence comes from the income the account generated, which is handled separately on your return, usually with a foreign tax credit for Korean tax already paid.

I have not filed for several past years. What now?

There are established procedures for coming into compliance, and which one fits depends on whether the failure was wilful. This is the point to speak to a professional who handles both sides rather than filing late returns on your own.

Official sources

General information, not tax advice. Rules and thresholds change, and how they apply depends on your circumstances — confirm with a licensed professional before acting.