When Junior Has A Foreign Bank Account: What You May Be Missing 🪙

🌎 Why “small” overseas accounts in your child’s name can trigger big U.S. reporting obligations.

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💝 Why “small” overseas accounts in your child’s name can trigger big U.S. reporting obligations.

Over the years, my practice has seen a steady rise in clients with foreign accounts. Most cases are straightforward FBAR filings, but every now and then something unusual comes across my desk—and that, I have to admit, still gets me excited. Call it tax season burnout or just tax nerd-iness.

One family came in with a letter from a foreign bank under FATCA regulations. The account wasn’t in either parent’s name—it was in their minor son’s. The account had been opened years earlier in their home country, funded with gifts from grandparents, and then more or less forgotten.

They assumed it was “just a child’s account” and didn’t figure into any U.S. tax calculations.

That assumption is very common—and very often wrong.

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A parent might open an account for their child in their home country for many reasons:🌎

• to cover higher education,

• to park birthday or festival gifts from grandparents and relatives,

• to save holiday funds,

• or simply to keep a financial connection “back home.”

At some point, the family moves to the U.S. and becomes “U.S. persons” for tax purposes—through substantial presence, a Green Card, or citizenship. Once that happens, those foreign accounts enter the U.S. reporting universe if the balances cross certain thresholds.

It doesn’t matter that it “feels like” the child’s small savings account. From the IRS and FinCEN’s perspective, it is a foreign financial account owned by a U.S. person.

If your child has money sitting in an overseas account, the real question is not just “Is there any tax?” but “Are we missing any reporting—especially for our child?”

In the rest of this post [behind the paywall], I walk through how the kiddie tax rules, Form 8814 elections, Form 8615, FBAR, and Form 8938 all interact when the account is in your child’s name—and where families most often get tripped up.

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🔒 PAYWALL STARTS HERE 🔒