If you have money or assets outside the United States, you’ve probably heard about two big reporting requirements: the FBAR and Form 8938. It’s incredibly easy to mix them up. You’re not alone: most people think they’re the same thing, or that filing one covers the other. That’s a dangerous assumption that leads to massive penalties.
Here’s the simple breakdown: They are two completely separate forms, filed to two different government agencies, with different rules and deadlines. You might have to file just one, or, more likely, you have to file both.
Think of it like this: You own a car. You have to register it with the state (that’s like the FBAR to FinCEN) and you might have to file a personal property tax form for it with your county (that’s like Form 8938 to the IRS). Two different agencies, two different forms, for the same car.
The FBAR (FinCEN Form 114)
Who it’s for:
Any U.S. person (citizen, resident, entity) who had a financial interest in or signature authority over foreign financial accounts.
The Threshold:
The aggregate value of all your foreign financial accounts exceeded $10,000 at any point during the calendar year.
What it reports:
Foreign financial accounts only. This includes bank accounts, brokerage accounts, mutual funds, and certain types of foreign life insurance or pension accounts.
Who gets it:
The Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department.
How to file:
Electronically only through the BSA E-Filing System. You cannot paper-file.
Deadline: April 15, with an automatic extension to October 15. No separate extension form is needed.
Form 8938 (FATCA Report)
Who it’s for:
Specific U.S. taxpayers (individuals and entities) who meet much higher asset value thresholds.
The Threshold:
Varies by your filing status and where you live:
- Living in the U.S.: $50,000 on the last day of the year, or $75,000 at any time during the year (for single filers). Thresholds are double for married filing jointly.
- Living Abroad: $200,000 on the last day of the year, or $300,000 at any time during the year (for single filers). Double for married filing jointly.
What it reports:
Specified Foreign Financial Assets. This is broader than accounts. It includes:
- Foreign financial accounts (like the FBAR).
- Foreign stocks and securities you hold directly (not in an account).
- Foreign partnership interests.
- Foreign-held debt instruments.
Who gets it: The Internal Revenue Service (IRS).
How to file: Attached to your annual Form 1040 tax return. If you e-file your return, this form gets e-filed with it.
Deadline: April 15 (or October 15 with a valid extension for your Form 1040).
Penalties: The Cost of Getting It Wrong
- FBAR Non-Willful Penalty: Up to $10,000 per violation.
- FBAR Willful Penalty: The greater of $100,000 or 50% of the account balance at the time of the violation. This can quickly exceed the total value of the account.
- Form 8938 Failure-to-File: $10,000, plus an additional $10,000 for each 30 days of continued failure after an IRS notice (max $50,000).
- Criminal Penalties: For willful violations of either, potential criminal prosecution leading to hefty fines and imprisonment.
FAQ
I filed Form 8938 with my tax return. Does that mean I don’t have to file the FBAR?
NO. This is the most dangerous misconception. Filing Form 8938 does not satisfy your FBAR filing requirement. They are separate legal obligations. You must file both if you meet the separate thresholds for each.
My total foreign accounts were exactly $9,999 all year. Do I need to file?
For the FBAR, no, you are under the $10,000 threshold. For Form 8938, you are also likely well under the minimum. But you must track this carefully—if the combined value ticked over $10,000 even for one day, the FBAR requirement is triggered for the entire year.
Do retirement accounts like a Canadian RRSP or UK ISA count?
Yes, for both.
FBAR: A Canadian RRSP or UK pension is considered a foreign financial account.
Form 8938: These are specified foreign financial assets.
I have a foreign rental property. Is that reported on these forms?
Not directly. The physical property itself is not reported on the FBAR or Form 8938. However, the rental income is reported on your Schedule E (Form 1040). If you have a foreign bank account that holds the rental income, that account’s value is reportable on both forms if thresholds are met.
What if I only have signature authority over an account for my job, but I don’t own any of the money?
The FBAR rule is clear: Signature authority alone triggers a filing requirement. You must report that account. However, on the FBAR, you can check the “Signature Authority Only” box. For Form 8938, you generally do not report assets you don’t have a financial interest in.
Can I get an extension for the FBAR?
Yes, but it’s automatic. The FBAR due date is automatically extended to October 15. You do not need to file any form to get this extension. For Form 8938, you get an extension only if you get a valid extension for your Form 1040 (e.g., by filing Form 4868).
The values on my FBAR and Form 8938 don’t match exactly. Is that a problem?
Not necessarily, but be prepared to explain. The FBAR requires the maximum account value during the year. Form 8938 typically requires the year-end value (or possibly the max value during the year, depending on the asset). The numbers will often be different. Just be consistent and use the correct value for each form as instructed.
The penalties for non-compliance are far more severe than the hassle of filing. The reporting thresholds are low, especially for the FBAR at $10,000. If you’re unsure, the safest course is to consult with a tax professional who specializes in international disclosure. They can review your specific assets, determine your filing obligations, and help ensure you don’t become an example of the IRS’s or FinCEN’s strict enforcement. Given the complexity and high stakes, getting professional guidance is a smart investment in your peace of mind.