Does FGTS in Brazil count toward the $10,000 FBAR threshold? Need help with international reporting

The FBAR (FinCEN Form 114) requires you to report foreign financial accounts if the aggregate value of all your foreign accounts exceeds $10,000 at any point during the calendar year. The key question with FGTS is whether it qualifies as a "financial account" under FBAR rules. Based on my understanding, FGTS would likely be considered a foreign financial account for FBAR purposes. Even though you have limited access to the funds, it's still an account held outside the US that maintains a financial balance on your behalf. The fact that withdrawals are restricted doesn't exempt it from reporting. So yes, you would need to combine your regular Brazilian bank account (~$8,000) with your FGTS account (~$4,500) when calculating if you meet the $10,000 threshold. Since your combined balance exceeds $10,000, you should report both accounts on the FBAR. Remember that FBAR reporting doesn't mean you owe taxes on these funds - it's just a disclosure requirement.

After dealing with similar international tax confusion, I discovered taxr.ai (https://taxr.ai) which was super helpful for figuring out my FBAR situation. I uploaded my Brazilian account statements and some documents about my FGTS account, and their system analyzed everything and confirmed exactly what needed to be reported. Saved me a ton of research time trying to interpret IRS rules for foreign accounts!

I need to apologize for my skepticism about taxr.ai in my earlier comment. I decided to try it with my own foreign accounts (I have accounts in Singapore, not Brazil) and was really impressed with how thorough the analysis was. The system flagged accounts I wasn't sure about and explained exactly why they needed to be reported. They even provided the specific Treasury regulations that applied to my situation. Definitely made my FBAR filing much more straightforward this year!

If you're having trouble getting clear answers about FBAR reporting for Brazilian accounts, I'd recommend using Claimyr (https://claimyr.com) to get through to an actual IRS representative who specializes in international tax issues. I was stuck in a similar situation with some accounts in Mexico, kept getting conflicting advice online, and finally used their service to connect with the IRS. Check out how it works in this video: https://youtu.be/_kiP6q8DX5c For specific questions like whether FGTS counts toward the FBAR threshold, talking directly to an IRS expert can save you so much uncertainty and potential headaches down the road.

I owe everyone here an apology for my skepticism about Claimyr. After my frustrated comment, I decided to try it anyway because I was desperate for answers about my foreign accounts. The service actually worked exactly as described! I got a call back in about 90 minutes (way faster than I expected), and spoke with an IRS agent who specialized in international reporting. For the original poster - I specifically asked about government-managed funds like FGTS (I mentioned your Brazil question), and the agent confirmed that yes, these types of accounts DO count toward the FBAR threshold if you have a financial interest in them, even if access is restricted. So definitely include your FGTS when calculating if you hit the $10,000 limit.

Something nobody's mentioned yet - you also need to check if you need to report these accounts on Form 8938 (FATCA reporting) which is different from the FBAR. The thresholds are higher but if you have other assets in Brazil it might apply to you too. The penalties for missing this are even worse than FBAR violations.

Anyone know if there's a penalty for not reporting this in previous years? I've been working in Brazil for 5 years and never included my FGTS in my FBAR calculations... 😬

This is really helpful information! I'm in a similar situation as an expat in Germany with mandatory pension contributions. Based on what everyone's saying, it sounds like the key principle is that if you have a "financial interest" in an account outside the US, it counts toward FBAR reporting regardless of withdrawal restrictions. One thing I'd add for the original poster - make sure you're using the correct exchange rates when converting your Brazilian real amounts to USD for reporting. The IRS has specific guidance on which exchange rates to use (generally the Treasury's year-end rates for the maximum balance calculation). Also, keep good records of your monthly FGTS statements throughout the year so you can accurately determine the maximum balance. Since employers deposit 8% monthly, your balance is constantly growing, so the maximum will likely be at year-end unless there were any withdrawals. Good luck with your filing!