[glodat]

When my daughter first moved to Germany after college, she worked for a university teaching English to foreign students. She did make over $10,000. She works from time to time teaching English but makes a lot less than $10,000. Her German husband is a banker making over $190,000 and they have a joint bank account. From what I get from her, that is where FBAR comes in, wanting to tax them on his income and her not reporting it. Can they do that or could she be mistaken and they are taxing her on her past income years ago teaching at the German university? Thank you, she is quite upset over this.

[AtlantaTaxExpert]

The FBAR is information only; no taxes are assessed.

However, tax returns MAY be required, but I doubt any tax will be due because the Earned Income Exclusion (Form 2555) or the Foreign Tax Credit (Form 1116) would offset any taxes due.

[lunlimom]

I have a question regarding what the "maximum value of an account" means per FBAR requirement. I share a checking account with my non-American husband. My husband's salary gets deposited to the account, and debts are paid from the account. The account lists all transactions, summarizes the balance on a daily, and monthly basis. Is the "maximum value" the maximum transaction (debit or credit), the maximum daily balance, or the maximum monthly balance?

For example: We have 2K in the account. My husband deposits his salary of 5K. On the same day, he pays bills worth 6K. The daily balance is 1K. At the end of the month, the bank statement shows a balance of 3K. What is the "maximum value of the account" per FBAR requirements?

[lunlimom]

Opps! I wanted to ask a question, not give an answer. Newbie mistake. Sorry!

[AtlantaTaxExpert]

The answer is the maximum balance at any point in time in the calendar year.

Your example shows balances that do NOT exceed the $10,000 threshold. However, if at ANY time during the tax year the accounts exceed $10,000, then the FBAR is required.