FBAR & FATCA for Americans in Medellin: The $10,000 Trap

The single most common — and most penalized — mistake US expats in Colombia make has nothing to do with income tax. It's failing to report foreign accounts.

The FBAR ($10,000 trigger)

If your foreign financial accounts (Bancolombia, Davivienda, brokerage, even some fintech wallets) ever TOTAL more than $10,000 at any point in the year, you must file an FBAR (FinCEN Form 114). It's informational — no tax — but penalties for not filing start around $10,000 and climb fast for willful cases.

FATCA (Form 8938)

Above higher thresholds you also file Form 8938 with your return. Colombian banks report US-person accounts to the IRS under FATCA — so mismatches between what the bank reports and what you file get noticed.

If you missed years

The Streamlined Procedures can fix non-willful misses, often penalty-free. Don't quiet-disclose and don't ignore it — both make it worse.

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Sabih Shafi, EA — All State Tax Resolution. Enrolled-Agent prepared. General information, not individual tax or legal advice.