Foreign Income Reporting

Form 8938 Introduction: FATCA Foreign Financial Assets Reporting

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Written byLipai WangFounder · IRS-registered tax professional

Key Takeaways

Form 8938 is the individual reporting component of FATCA (Foreign Account Tax Compliance Act)
Covers foreign bank accounts, brokerage accounts, mutual funds, and entity interests
Attached to your annual tax return (unlike FBAR which is filed separately)
Thresholds: $50,000+ for U.S. residents, $200,000+ for expatriates (single)
You may need to file both Form 8938 and FBAR — they serve different purposes

FATCA and Form 8938

Form 8938 is part of the Foreign Account Tax Compliance Act (FATCA), passed in 2010 to prevent U.S. taxpayers from hiding money and investments in foreign financial institutions. FATCA works on two fronts: it requires individuals to report foreign financial assets (via Form 8938), and it requires foreign financial institutions to report accounts held by U.S. persons to the IRS.

What Must Be Reported

Form 8938 covers specified foreign financial assets including foreign bank accounts, foreign brokerage accounts, foreign mutual funds, interests in foreign entities, and foreign-issued insurance or annuity contracts with cash value. The form is attached to your annual tax return — unlike the FBAR which is filed separately.

The filing threshold depends on your residency status and filing status. U.S. residents have lower thresholds (starting at $50,000 year-end for single filers), while expatriates have higher thresholds ($200,000 year-end for single filers).

Frequently Asked Questions

If I already file FBAR, do I still need Form 8938?

Possibly yes. The FBAR and Form 8938 have different thresholds, cover slightly different assets, and are filed with different agencies. Many taxpayers need to file both.

What is the penalty for not filing Form 8938?

The penalty for failure to file is $10,000 per year. If the failure continues for more than 90 days after IRS notice, additional penalties of $10,000 per 30-day period apply, up to $50,000.

foreign incomeFBARform 8938FATCAforeign reporting

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