How to File FATCA: Form 8938 Thresholds, Deadline, and Penalties

To file Form 8938, attach it to your Form 1040 (or 1040-SR or 1040-NR) and submit it with your annual income tax return by your regular filing deadline. You file it if the total value of your specified foreign financial assets crosses a threshold that depends on your filing status and whether you live in the United States or abroad. The lowest trigger is $50,000 on the last day of the year for a single filer living domestically, and skipping the form when required carries a $10,000 starting penalty even if you owe no additional tax.

Do You Actually Have to File

Form 8938 applies to “specified individuals”: U.S. citizens, U.S. resident aliens for any part of the tax year, nonresident aliens who elect to file a joint return with a U.S. spouse, and nonresident aliens who are bona fide residents of American Samoa or Puerto Rico.¹ If that describes you and your foreign holdings hit the thresholds below, you have a filing obligation.

The dollar amounts turn on two questions: your filing status and where you live. You measure aggregate value across all your specified foreign financial assets, not each account on its own.

Living in the United States

Single, head of household, or married filing separately: file when your foreign assets exceed $50,000 on the last day of the tax year or $75,000 at any point during the year. Married filing jointly: $100,000 at year-end or $150,000 at any time.²

Married filing separately uses the same $50,000/$75,000 threshold as single filers, but with a twist. When testing whether you cross the line, count only half the value of any asset jointly owned with your spouse. If you do cross it, however, you report the full value of those joint assets on your Form 8938.³

Living Abroad

If you qualify as a bona fide resident of a foreign country or meet the physical presence test under the foreign earned income rules, thresholds jump substantially. Single filers abroad report when assets exceed $200,000 at year-end or $300,000 at any time. Married filing jointly abroad: $400,000 at year-end or $600,000 at any point.²

What Counts as a Specified Foreign Financial Asset

The category is broader than most people expect. It includes any financial account maintained by a foreign financial institution: savings, checking, brokerage, and custodial accounts.⁴ Beyond accounts, it also picks up assets held for investment outside any account:

Foreign stock and securities. Shares in a foreign corporation or debt instruments issued by a non-U.S. person, provided they aren’t held in a U.S.-based account.
Foreign financial instruments. Any contract or instrument with a non-U.S. issuer or counterparty held for investment, including foreign-issued life insurance policies with a cash value.
Interests in foreign entities. Ownership in a foreign partnership, trust, or estate.⁴

If you already report a foreign asset on another form, such as Form 5471 for a controlled foreign corporation, you still list it on Form 8938. You can report just the form number and basic identifying information instead of the full financial details.

What You Do Not Report

Several categories are specifically excluded. You do not report foreign real estate you own directly, physical foreign currency, precious metals held directly, personal property like art or jewelry, or benefits from a foreign government’s social security-type program.⁵ There’s a wrinkle with real estate: if you hold foreign property through a foreign entity like an LLC or trust, the entity itself is a specified foreign financial asset and its value includes the real estate. You are not reporting the property, but you are reporting the entity that holds it.⁶

How to Complete the Form

Download Form 8938 and the instructions from the IRS website.⁷ Before filling anything in, pull records for every foreign asset: the maximum value during the year, account numbers, the full name and address of each foreign institution, and whether any accounts were opened or closed during the year.

The form splits assets into two parts. Part I covers deposit and custodial accounts at foreign financial institutions. For each, you report the institution’s name and address, the account number, the maximum balance during the year, and whether the account was opened or closed. Part II covers everything else: foreign stock held outside an account, partnership interests, financial instruments, and similar assets. For those, you describe the asset, identify the issuer, and provide the maximum value.⁸

All values go in U.S. dollars. Convert foreign currencies using the Treasury Bureau of the Fiscal Service exchange rate for the last day of the tax year, and use the same rate for both threshold testing and reporting individual values.⁸ If you have more accounts or assets than the form can accommodate, attach continuation statements following the format in the instructions.

Accuracy carries more weight here than on most attachments. The IRS cross-references Form 8938 data against information it receives directly from foreign banks under intergovernmental FATCA agreements, and inconsistencies can flag your return for review.

Deadline and Where It Goes

Form 8938 is not a standalone filing. Attach it to your annual income tax return — Form 1040, 1040-SR, or 1040-NR — and submit them together.⁹ Do not send it separately to the IRS. If you e-file, your tax software integrates the form into the return. Paper filers include it in the mailed package.

The deadline follows your tax return due date, including extensions. For most taxpayers that means April 15. If you live abroad, you get an automatic two-month extension to June 15 on your income tax return, and Form 8938 rides along. You can also request an extension to October 15.⁹

Keep copies of the form and the underlying records. Given the extended statute of limitations that applies to foreign asset reporting, holding records for at least six years is prudent.⁹

Form 8938 Does Not Replace the FBAR

Filing Form 8938 does not satisfy your FBAR obligation, and vice versa. Many taxpayers owe both. The FBAR (FinCEN Form 114) kicks in at $10,000 in aggregate across all foreign financial accounts at any time during the year, far below Form 8938’s lowest threshold, and it covers only financial accounts, not stocks or entity interests held outside an account.⁶

The mechanics are entirely separate. Form 8938 attaches to your tax return and goes to the IRS. The FBAR is filed electronically through FinCEN’s BSA E-Filing System and never goes to the IRS directly. The FBAR is due April 15 with an automatic extension to October 15, which you do not have to request.¹⁰ If you have foreign accounts, assume you owe both filings until you confirm otherwise.

Penalties If You Don’t File

Failing to file Form 8938, or failing to report a specified foreign financial asset on it, triggers a $10,000 penalty per violation. If the IRS notifies you and you still don’t file, an additional $10,000 accrues for each 30-day period the violation continues after 90 days, up to $50,000 in continuation penalties.¹¹ Total civil penalties for a single year can reach $60,000.⁶

The one that catches people off guard is the accuracy-related penalty. If the IRS determines you owe additional tax tied to an undisclosed foreign financial asset, the standard 20-percent accuracy penalty doubles to 40 percent of the underpayment.¹² That sits on top of the tax owed and any filing penalties.

The audit window stretches too. The IRS normally has three years to audit a return, but if you omit more than $5,000 of income tied to a foreign financial asset, the window becomes six years. If you never file Form 8938 at all, the clock on the related items does not start until three years after you finally provide the required information.¹³ Never filing effectively means the IRS can come after you indefinitely.

Willful failure can also be prosecuted as tax evasion under 26 U.S.C. § 7201, carrying up to five years in prison and a fine of up to $100,000 for individuals.¹⁴

You can avoid penalties by showing your failure was due to reasonable cause and not willful neglect. The IRS evaluates this case by case, and you bear the burden of proof. One argument the IRS explicitly rejects: claiming a foreign country would penalize you for disclosing the information.⁸ And if you can’t provide enough information for the IRS to determine the aggregate value of your assets, the IRS presumes the value exceeds the reporting threshold, so you lose the argument that you didn’t need to file.¹¹

If You Missed It in Prior Years

The IRS offers two main paths for coming into compliance, and which one fits depends on whether you also have unreported income and whether the IRS has already contacted you.

The Streamlined Filing Compliance Procedures cover taxpayers whose failure was non-willful — that is, the result of negligence, inadvertence, mistake, or a good-faith misunderstanding of the law. There are two tracks, one for taxpayers living abroad and one for U.S. residents. To use either, you must certify under penalties of perjury that your failure was non-willful, and you must have a valid taxpayer identification number. You are ineligible if the IRS has started a civil examination of any of your returns or if you are under criminal investigation.¹⁵

If your only problem is missing information returns like Form 8938 and you have no unreported income to correct, the Delinquent International Information Return Submission Procedures may apply. You attach the late information returns to an amended tax return and file through normal channels, and you can include a reasonable cause statement. The IRS may assess penalties first and require you to respond to correspondence before considering your explanation.¹⁶ Returns filed this way are not automatically flagged for audit but can be selected through normal audit processes.

Neither track is available once the IRS has contacted you about the missing returns. Acting before you hear from the IRS is the whole point.

1
Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
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eCFR. 26 CFR 1.6038D-2 – Requirement to Report Specified Foreign Financial Assets
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Internal Revenue Service. Summary of FATCA Reporting for U.S. Taxpayers
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eCFR. 26 CFR 1.6038D-3 – Specified Foreign Financial Assets
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Internal Revenue Service. Basic Questions and Answers on Form 8938
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Internal Revenue Service. Comparison of Form 8938 and FBAR Requirements
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Internal Revenue Service. About Form 8938, Statement of Specified Foreign Financial Assets
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IRS.gov. Instructions for Form 8938
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Internal Revenue Service. Instructions for Form 8938
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Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
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Office of the Law Revision Counsel. 26 USC 6038D – Information With Respect to Foreign Financial Assets
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Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
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Office of the Law Revision Counsel. 26 USC 6501 – Limitations on Assessment and Collection
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Office of the Law Revision Counsel. 26 USC 7201 – Attempt to Evade or Defeat Tax
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Internal Revenue Service. Streamlined Filing Compliance Procedures
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Internal Revenue Service. Delinquent International Information Return Submission Procedures