Form 8938, officially named the Statement of Specified Foreign Financial Assets, is used by expats to report financial assets held abroad to the IRS.
If you're a U.S. taxpayer abroad with foreign assets valued over $300,000 (or $200,000 at year-end), you need to report it on Form 8938.
Failing to file Form 8938, when required, could result in a $10,000 fine (with a possible penalty of up to $50,000 for continued non-compliance after IRS notification).
The form is affixed to your yearly return and should be submitted by the expat tax filing deadline, considering any relevant extensions.
if you're a U.S. taxpayer residing abroad and have foreign assets exceeding $300,000 (or $200,000 at year-end), you must report them on Form 8938.
For joint returns, the thresholds are $600,000 (anytime) or $400,000 (year-end).
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Form 8938
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Form 8938 includes various foreign financial assets like bank accounts, investments, foreign entity ownership, etc. For a complete list of reportable assets, refer to IRS instructions.
You may need one, the other, or both. FBAR is filed with the Financial Crimes Enforcement Network (and is based on calendar year), whereas Form 8938 goes to the IRS as part of your federal tax filing (and is based on your chosen tax year). FBAR is judged based on foreign balances controlled by your US entity's foreign accounts or its controlled entities foreign accounts, whereas Form 8938 is judged based on a threshold of specified passive income. See here for more details: https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements
Consider your residency status (U.S. or abroad) and the value of foreign financial assets on the last day of the tax year and at any time during the year. If thresholds are exceeded, file Form 8938.
Yes, both Form 8938 and FBAR might be necessary since they serve different purposes and have separate reporting thresholds. While FBAR has its requirements, Form 8938 is part of your annual tax return and may need to be filed, even if you're already submitting FBAR.
