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You hold money or investments outside the US. Whether the IRS wants a form for them comes down to a dollar threshold, set by where you lived that year and how you filed.
Thresholds tested against both the December balance and the year’s peak, then converted at the year end rate
Form 8938 and the FBAR sorted together, because filing one does not release you from the other
Missed years brought current through whichever of the three IRS disclosure routes fits the facts
Two rules to settle before anything is filed:
If no return is required this year, this form is not due either. The FBAR has no such rule.
Outside this form, inside the FBAR. Same money, opposite answers.
Both of those cut the other way too, which is why we read the account list before anything is filed.
What is Form 8938 in practical terms: the report of your specified foreign financial assets. Those are accounts at foreign financial institutions, plus foreign stock, entity interests and foreign issued contracts held for investment outside an account. You attach it to your annual return; it is not filed on its own.
Four pieces of work:
Why a generalist struggles with this one. A seasonal preparer meets this form once or twice a year and treats it as one more schedule. The detail parts repeat once per account and once per asset, so nine accounts across four years is thirty six blocks of data to build, reconcile and tie back to the return. We price and staff it as a data job.
Leaving it unfiled has a cost that is not a penalty. Where a required Form 8938 is missing, the IRS can assess that year until three years after the form is filed under section 6501(c)(8), so the year does not close on schedule. If the failure had reasonable cause, only the Form 8938 items remain open.
Where we stop. Completing the form part by part is on Form 8938 instructions, and penalties and unfiled years are on late filing of Form 8938.
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Both filings ask about foreign money and draw the line in different places. On fbar vs 8938 the IRS comparison chart gives the asset by asset answer, and the two disagree on four of the six rows in the table.
The FBAR threshold is $10,000 across your foreign accounts combined at any point in the year, filed with FinCEN on its own, with no higher figure for living abroad.
| Asset | Form 8938 | FBAR |
|---|---|---|
| Account at a foreign bank | Yes | Yes |
| Foreign branch of a US bank | No | Yes |
| Signature authority only | No | Yes |
| Foreign stock outside an account | Yes | No |
| Foreign partnership or hedge fund | Yes | No |
| Real estate or gold held directly | No | No |
Signature authority shows the split. If you are on your mother’s account in Athens for emergencies and own none of it, you report that account on the FBAR and not on this form. Foreign stock held outside any account is the reverse: on this form and not on the FBAR.
One set of statements, two destinations
Your foreign accounts and assets
| Form 8938 | FBAR, FinCEN Form 114 | |
|---|---|---|
| Filed | Attached to your return | On its own, electronically |
| Goes to | The IRS | FinCEN, not the IRS |
| Due | With the return, extensions included | April 15, automatic to October 15 |
Two filings, two agencies, two deadlines, one set of statements behind both. If you extend your return, the 8938 form is due with it; the FBAR dates do not change.
Form 8938 is for:
You file if either test is met: the total value on the last day of the tax year, or the total at any point during it. The 8938 filing requirements turn on both, so being under on December 31 is not enough on its own.
| Filer status | On the last day | At any point |
|---|---|---|
| Single or married filing separately, in the US | $50,000 | $75,000 |
| Married filing jointly, in the US | $100,000 | $150,000 |
| Single or married filing separately, abroad | $200,000 | $300,000 |
| Married filing jointly, abroad | $400,000 | $600,000 |
Those four pairs are the Form 8938 threshold for individuals, set out in the IRS instructions. Being under the form 8938 filing threshold on one test does not help if you are over on the other.
Living abroad is a test, not an address. The higher thresholds require:
a tax home in a foreign country; and
either bona fide residence there for a full tax year, a route open to US citizens only, or 330 full days abroad inside 12 consecutive months.
Certain closely held corporations and partnerships meeting the passive income or passive asset test, and certain domestic trusts, file as well at 50,000 dollars and 75,000 dollars. Single member status alone does not make an entity a filer.
The 8938 threshold is a FATCA reporting threshold, and Form 8938 FATCA reporting is the same filing under a different name, so nothing extra is due because a bank called it FATCA.
Married couples filing separately count a jointly owned account one way to test the threshold and another way to report it.
Take a couple in the US filing separately with one joint foreign account worth 90,000 dollars throughout the year, where one spouse also holds a separate 10,000 dollar asset.
| Spouse | Threshold test value | Result | Reports |
|---|---|---|---|
| Spouse A, joint account only | 45,000 dollars, half of 90,000 | Under 50,000 and 75,000: no form | Nothing |
| Spouse B, joint account plus own asset | 55,000 dollars | Over 50,000 on the last day: form due | The full 90,000 dollar account plus the 10,000 |
Half to test, the full value to report. A joint owner who is not your spouse counts the entire value both times.
If a year went by unfiled, the fix depends on the facts. The IRS sets out three routes for undisclosed foreign assets: voluntary disclosure, the streamlined filing compliance procedures, and the delinquent international information return submission procedures.
Which one fits depends on willfulness, examination status, omitted income and what was filed before. That is a different job from this year’s form and we quote it separately.
You get a written answer on whether the form is due before you commit to any filing work. Handled by a CPA or an Enrolled Agent.
Reported on the 8938 form
Foreign deposit and custodial accounts, including accounts closed during the year
Foreign stock or securities, held outside a financial account
Interests in foreign entities, including partnerships, hedge funds and private equity funds
Foreign issued life insurance or annuity contracts with a cash value
Foreign pensions and deferred compensation plans, reported as the interest itself, not the assets inside
Interests in foreign trusts and estates, where you know of the interest or took a distribution
Outside the form
Real estate held directly, along with currency, gold and collectibles held directly
Accounts at US institutions, including the foreign branch of a US bank
Foreign social security equivalents, which a foreign pension is not
Real estate held through a company is different: the asset is your interest in the foreign company, and the value of that interest includes the apartment. We check that distinction before the thresholds.
Send last year’s return and a list of accounts and holdings with the country and institution for each.
We test both thresholds, including the peak during the year, and tell you in writing whether the form is due.
We set the maximum value for each asset and convert at the year end rate, using statements as support.
We sort the overlap so the same accounts are reported correctly across this form, the FBAR and any 5471, 8621 or 3520.
We prepare the form, attach it to the return, and file the FBAR separately with FinCEN.
You keep a schedule of accounts and values, so next year’s filing is a much shorter job.
We work by video and phone with clients in all 50 states, so nothing depends on you being in the same city as your preparer.
Cost on the 8938 form follows the account list. The work is quoted per account and per year, not per return, so that list changes a quote more than an income figure does. These are the factors that set a price. They are not a quote, and you get the number before any work starts.
The error we see is a form that reports the December balance, because that is the number on the statement the client had to hand.
The instructions require the maximum value during the year at the year end rate. An account that peaked in June and was drawn down by December is reported at the wrong figure, and the threshold test before it was run on the wrong figure too. We rebuild the peak from the monthly statements before anything else is decided.
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Our team includes CPAs and Enrolled Agents who work on individual returns, business taxes and tax planning. Tell us what you need help with when you get in touch.
The 8938 form usually comes up late: a bank asks about your US status, a preparer mentions it in passing, or the IRS sends a notice. Whichever it was, we answer the question in one conversation, and you know where you stand before you commit to anything.
General rules only, not advice on your situation. Foreign asset reporting turns on facts we have not seen, so speak to a CPA or an Enrolled Agent before you file or skip a filing.
