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You thought filing one form for foreign accounts was enough. Then your accountant tells you that you also need to file Form 8938.
For most expats. The IRS makes you file two different forms for foreign assets. FBAR and Form 8938. Different agencies, different deadlines, different requirements. Miss either one and you're looking at penalties that can destroy your finances.
These forms overlap but aren't identical. Some assets require both forms. Others need only one. The thresholds are different. The reporting requirements are different. Even the penalties are different.
Most expats discover this the hard way, after they've missed deadlines or filed incorrectly. By then, the IRS is already calculating penalty amounts that can reach $60,000 per year for Form 8938 alone.
Understanding these forms isn't rocket science once you know the key differences. This guide breaks down exactly when you need to file each form, what assets get reported where, and how to avoid the costly mistakes that trip up thousands of expats every year.
Understanding FBAR
FBAR (Foreign Bank Account Report) came first. It's been around since the 1970s, designed to catch Americans hiding money in foreign bank accounts. FBAR is simple in terms of reporting foreign financial accounts if the combined balance exceeds $10,000 at any point during the year. The key deadline to file it is on October 15, which gets automatic extensions to April 15.
What Counts as a Foreign Account for FBAR
- Foreign bank accounts (checking, savings)
- Foreign brokerage and investment accounts
- Foreign mutual fund accounts
- Foreign pension accounts
- Accounts you have signature authority over
- Accounts owned by entities you control
FBAR penalties are severe for not filing. In 2025, willful violations can result in the greater of $165,353 or 50% of the account balance per violation, while non-willful violations are capped at $16,536 per report.
What Is Form 8938?
Form 8938 came later as part of FATCA (Foreign Account Tax Compliance Act). It's broader than FBAR and catches assets that FBAR misses. Form 8938 reports "specified foreign financial assets" above certain thresholds. Unlike FBAR's focus on accounts, Form 8938 captures a wider range of foreign investments and financial interests. Thresholds vary dramatically based on where you live and your filing status.
For U.S. Residents:
- Single: $50,000 year-end or $75,000 any time during year
- Married Filing Jointly: $100,000 year-end or $150,000 any time
- Married Filing Separately: $50,000 year-end or $75,000 any time
For Expats Living Abroad:
- Single: $200,000 year-end or $300,000 any time during year
- Married Filing Jointly: $400,000 year-end or $600,000 any time
- Married Filing Separately: $200,000 year-end or $300,000 any time
What Assets Get Reported on Form 8938
- Foreign bank and brokerage accounts
- Foreign stocks not held in U.S. accounts
- Foreign partnership interests
- Foreign mutual funds
- Foreign pension and retirement accounts
- Foreign life insurance with cash value
- Foreign trusts and estate interests
Form 8938 Deadlines
- Due with your tax return (April 15 or extension date)
- Filed as part of Form 1040
- Extensions apply automatically with tax return extensions
Form 8938 Penalties
- Initial penalty: $10,000 for failure to file
- Additional penalty: $10,000 for each 30-day period of continued non-filing
- Maximum penalty: $60,000
- Criminal penalties also possible
Differences Between FBAR and Form 8938
The overlap between these forms confuses everyone. Here's a clear comparison:
|
Factor |
FBAR |
Form 8938 |
|
Agency |
Treasury/FinCEN |
IRS |
|
Threshold |
$10,000 combined accounts |
Varies: $50K-$600K depending on status |
|
Filing Status Impact |
None |
Significant - higher thresholds for expats |
|
What's Reported |
Foreign account balances |
Broader foreign financial assets |
|
Filing Method |
Separate electronic filing |
Attached to tax return |
|
Due Date |
October 15 |
April 15 (or extension date) |
|
Penalties (Non-willful) |
$16,536 |
Up to $60,000 total |
|
Penalties (Willful) |
$165,353 or 50% |
Criminal penalties possible |
|
Income Requirement |
None |
Must file tax return |
|
Asset Valuation |
Maximum account balance |
Maximum asset value |
|
Real Estate |
No |
No (direct ownership) |
|
Stocks in Foreign Corps |
Only if held in account |
Yes, even if held directly |
|
Foreign Business Interests |
Only if account-based |
Yes, partnership/corp interests |
Key Insight: You often need both forms. FBAR catches the account, Form 8938 catches the broader asset category.
When to File FBAR and Form 8938
Understanding when each form applies prevents costly mistakes and missed filings.
File FBAR When:
- Combined foreign account balances exceed $10,000 at any time
- You have signature authority over foreign accounts
- You control entities with foreign accounts
- Regardless of your income or tax filing status
File Form 8938 When:
- You must file a U.S. tax return AND
- Your foreign assets exceed the threshold for your situation AND
- You hold "specified foreign financial assets"
Common Scenarios to understand:
Scenario 1: Small Foreign Bank Account
- $15,000 in foreign savings account
- File FBAR: Yes (exceeds $10,000)
- File Form 8938: Depends on total assets and your status
Scenario 2: Large Investment Portfolio
- $250,000 in foreign brokerage account
- File FBAR: Yes (account balance)
- File Form 8938: Likely yes (asset value and threshold)
Scenario 3: Foreign Real Estate
- Own $500,000 foreign property directly
- File FBAR: No (not an account)
- File Form 8938: No (direct real estate excluded)
Scenario 4: Foreign Business Interest
- 25% ownership in foreign corporation worth $300,000
- File FBAR: Only if corp has accounts you control
- File Form 8938: Likely yes (specified foreign financial asset)
Real Life Examples to Understand
Let's look at actual situations expats face to clarify when these forms apply.
Example 1: The Tech Consultant in Germany
Mark is single, lives in Berlin, earns $80,000. He has:
- German checking account: €25,000
- German investment account: €45,000
- Total foreign assets: €70,000 ($75,000)
FBAR Required: Yes, combined accounts exceed $10,000
Form 8938 Required: No, total assets ($75,000) below threshold ($200,000 for single expat)
Example 2: The Married Couple in Singapore
Sarah and John file jointly, both live in Singapore. They have:
- Singapore bank accounts: $150,000
- Singapore retirement accounts: $300,000
- Foreign mutual funds: $200,000
- Total foreign assets: $650,000
FBAR Required: Yes, accounts exceed $10,000
Form 8938 Required: Yes, assets ($650,000) exceed threshold ($400,000 year-end for married expats)
Example 3: The Dual Citizen in Canada
Lisa is single, lives in Toronto, Canadian citizen with U.S. citizenship. She has:
- Canadian TFSA: CAD 75,000
- Canadian RRSP: CAD 200,000
- Canadian checking: CAD 30,000
- Total: CAD 305,000 ($225,000)
FBAR Required: Yes, accounts exceed $10,000
Form 8938 Required: Yes, assets ($225,000) exceed threshold ($200,000 for single expat)
Example 4: The Retiree in France
Bob and Mary are married, file jointly, and live in France. They have:
- French bank accounts: €80,000
- French government pension: €150,000 value
- Own French apartment directly: €400,000
- Total reportable assets: €230,000 ($250,000)
FBAR Required: Yes, accounts exceed $10,000
Form 8938 Required: No, reportable assets ($250,000) below threshold ($400,000 for married expats)
Note: French apartment not reportable as direct real estate ownership
How NSKT Global Can Help
NSKT Global specializes in FBAR and Form 8938 compliance for American expats worldwide. We understand the complex requirements and help you avoid costly penalties while meeting all reporting obligations.
Complete Compliance Assessment
We analyze your complete foreign asset portfolio to determine exact filing requirements for both FBAR and Form 8938. Our assessment identifies all reportable assets and calculates accurate thresholds based on your specific situation.
Accurate Form Preparation
We prepare both FBAR and Form 8938 with precise asset valuations, proper currency conversions, and complete documentation. Our systematic approach ensures nothing gets missed or incorrectly reported.
Multi-Year Catch-Up Services
If you've missed prior year filings, we help you get current through appropriate IRS programs. This includes late FBAR filings, amended returns with Form 8938, and penalty minimization strategies.
Ongoing Compliance Management
Foreign asset reporting requirements change annually. We provide ongoing support to ensure continued compliance as your financial situation evolves and regulations change.
Penalty Resolution
If you're facing FBAR or Form 8938 penalties, we represent you before the IRS and Treasury Department to achieve reasonable resolutions and minimize financial impact.
Asset Restructuring Advice
We help you organize foreign investments and accounts to simplify reporting requirements while maintaining your investment objectives and tax efficiency.
Whether you're dealing with simple foreign bank accounts or complex international investment structures, our expertise ensures you meet all U.S. reporting requirements while avoiding the severe penalties that non-compliance can trigger.
Frequently Asked Questions
Q: Do I need to file both FBAR and Form 8938 for the same foreign account?
Often yes. If you have a foreign brokerage account worth $75,000, you'll typically file FBAR (because it's an account over $10,000) and Form 8938 (if your total foreign assets exceed your threshold). They serve different purposes and have different requirements.
Q: What's the difference in filing deadlines between FBAR and Form 8938?
FBAR is due October 15 and filed separately through FinCEN. Form 8938 is due with your tax return (April 15 or extension date) and filed as part of your 1040. Missing either deadline can result in significant penalties.
Q: Do higher thresholds for expats apply to both forms?
No, only Form 8938 has higher thresholds for expats living abroad. FBAR always uses the $10,000 threshold regardless of where you live or your filing status.
Q: How do I determine the value of foreign assets for reporting purposes?
Use the maximum value during the tax year, converted to U.S. dollars using December 31 exchange rates for year-end values. For assets that fluctuate, track the highest value reached at any point during the year.
Q: Are foreign retirement accounts reportable on both forms?
Generally, yes, foreign retirement accounts are reportable on both FBAR (as accounts) and Form 8938 (as specified foreign financial assets). However, some foreign pensions may have special treatment under tax treaties.
Q: Can I file FBAR and Form 8938 myself, or do I need professional help?
Simple situations might be manageable DIY, but professional help becomes valuable for complex situations, high asset values, or if you've missed prior year filings. The penalties for errors often exceed professional fees.
