DIRECT ANSWER
What to know first
Form 8938 and the FBAR are separate foreign-asset reporting requirements. The FBAR, FinCEN Form 114, is filed electronically with FinCEN and generally uses a $10,000 aggregate foreign-account threshold. Form 8938 is filed with an applicable federal annual return by specified persons whose specified foreign financial assets exceed the threshold for their filing status and whether they live in the United States or abroad. A taxpayer may need to file either form, both forms, or neither.
Compare the two reporting systems
| Question | FBAR — FinCEN Form 114 | Form 8938 |
|---|---|---|
| Where is it filed? | Electronically with FinCEN through BSA E-Filing; it is separate from the income-tax return. | Attached to an applicable federal annual return and filed with that return. |
| Who may file? | A United States person with a covered financial interest or signature or other authority. | A specified person with specified foreign financial assets above the applicable threshold. |
| What is the basic threshold? | Aggregate covered foreign financial accounts exceeding $10,000 at any time during the calendar year. | Threshold varies by filing status and whether the taxpayer lives in the United States or abroad. |
| What can be covered? | Foreign financial accounts, subject to definitions and exceptions. | Foreign financial accounts and certain other specified foreign financial assets. |
Apply the current Form 8938 thresholds
For an individual required to file a federal income-tax return, the common Form 8938 thresholds depend on filing status and whether the taxpayer qualifies as living abroad under the Form 8938 rules.
| Filing situation | Value on the last day of the year | Value at any time during the year |
|---|---|---|
| Unmarried or married filing separately, living in the United States | More than $50,000 | More than $75,000 |
| Married filing jointly, living in the United States | More than $100,000 | More than $150,000 |
| Not filing jointly and qualifying as living abroad | More than $200,000 | More than $300,000 |
| Married filing jointly and qualifying as living abroad | More than $400,000 | More than $600,000 |
Do not assume the same assets appear on both forms
The FBAR focuses on covered foreign financial accounts. Form 8938 can also reach certain interests in foreign entities and other foreign financial instruments or contracts held for investment. Exceptions, duplicate-reporting relief, ownership rules, valuation, and currency conversion can affect the entries.
An asset reported on another international information return may receive different treatment in Part IV of Form 8938 rather than being omitted from the Form 8938 analysis entirely. Review the instructions for every form connected to the asset.
Build one inventory before preparing either report
These complex information returns are not automatically included with an FBAR or Form 8938 engagement. Each required return and year should be identified and accepted in writing.
- Account type, country, institution, ownership, signature authority, and maximum annual value
- Foreign stocks, securities, pensions, contracts, trusts, and entity interests held directly or outside an account
- Taxpayer filing status, tax home, residence, travel dates, and whether an annual return is required
- Forms 3520, 5471, 8621, 8858, 8865, or other international returns that may involve the same assets
AUTHOR
Stefano Tavella, CPA
Stefano Tavella, CPA leads Tavella CPA Group, a cloud-based CPA firm serving individuals and small businesses with tax preparation, planning, notice assistance, and related services.
PRIMARY GUIDANCE