You attach it to your individual income tax return for the year. If you are required to file a U.S. return and you meet the asset threshold, Form 8938 is not optional.
What you report is broader than just bank accounts. You include foreign financial accounts plus certain non‑account investments, such as foreign stocks held directly, interests in foreign partnerships or corporations, and some foreign retirement and insurance contracts. The aim is transparency, so the form focuses on maximum values and identification details for each asset.
Form 8938 does not replace the FBAR. FBAR, filed electronically with FinCEN, has its own rules, its own deadline, and a much lower threshold. Filing one does not satisfy the other, which is why many taxpayers end up filing both every year.
Who Must File, With 2025‑Ready Thresholds
You must file Form 8938 if you are a specified person and your total specified foreign financial assets exceed the IRS threshold for your situation. A “specified person” includes U.S. citizens, U.S. resident aliens, certain nonresident spouses who elect to file jointly, and certain domestic entities formed or used to hold passive foreign assets.
Here are the thresholds that apply, which have remained the same in recent IRS guidance as of 2025:
- If you live in the U.S.
- Unmarried or married filing separately: more than $50,000 on the last day of the tax year, or more than $75,000 at any time.
- Married filing jointly: more than $100,000 on the last day of the tax year, or more than $150,000 at any time.
- If you qualify as living abroad
- Unmarried or married filing separately: more than $200,000 on the last day of the tax year, or more than $300,000 at any time.
- Married filing jointly: more than $400,000 on the last day of the tax year, or more than $600,000 at any time.
To count as living abroad for Form 8938, your tax home must be in a foreign country and you must meet either the bona fide residence test or the 330‑day physical presence test. If you meet those tests, the higher thresholds apply.
Specified domestic entities, such as closely held corporations or partnerships with significant passive income or assets, may also have to file if their totals exceed $50,000 on the last day of the year or $75,000 at any time. These entity rules apply to tax years beginning after December 31, 2015, and include special aggregation rules.
What You Report, At A Glance
On Form 8938 you list each asset’s maximum value during the year, the institution or issuer, account numbers or identifying details, the country, and the type of asset. You convert values to U.S. dollars using the Treasury Bureau of the Fiscal Service exchange rate on the last day of your tax year, and you disclose the rate source on the form when required. An appraisal is not needed in most cases, you use reasonable fair market values.
Remember, FBAR has a separate threshold and deadline. It focuses on foreign financial accounts and requires you to report the maximum account values for the calendar year. You file FBAR electronically through FinCEN, and the standard due date is April 15 with an automatic extension to October 15.
What Counts As A Specified Foreign Financial Asset
Here is the practical way to think about it. If it is a financial account outside the U.S., or an investment asset tied to a non‑U.S. issuer or counterparty that you hold for investment and not in a U.S. account, it probably belongs on Form 8938 once you cross the threshold.
Reportable examples include:
- Foreign bank, savings, and brokerage accounts.
- Foreign stocks or bonds held directly, not through a U.S. broker.
- Interests in foreign partnerships, corporations, and certain foreign trusts or estates.
- Certain foreign pensions or retirement plans, and foreign life insurance or annuity contracts with cash value.
What you do not report on Form 8938:
- Directly owned foreign real estate, such as a home or rental property.
- Foreign currency held outside an account.
- Directly held tangible assets like art, jewelry, or collectibles.
- Financial accounts maintained by U.S. institutions, even if they hold foreign investments or foreign currency.
- Accounts at a U.S. branch of a foreign bank or the foreign branch of a U.S. bank, which are treated as U.S. payor accounts.
If your foreign real estate is held through an entity, you report the ownership interest in the entity, not the property itself. The property’s value still flows into the value of your entity interest.
Valuation And Exchange Rate Rules
- Determine each asset’s maximum value during your tax year using fair market value.
- If the asset is denominated in foreign currency, first find its value in that currency, then convert to U.S. dollars using the Treasury Bureau of the Fiscal Service rate for the last day of your tax year.
- If no Treasury rate exists for that currency, use another public rate that converts into U.S. dollars, and disclose the source on Form 8938.
- Use the last‑day‑of‑year rate even if you sold the asset before year end.
Practical tip: keep a simple year‑end worksheet that records each asset’s maximum balance, the date it peaked, and the exchange rate you used. That one page can cut review time and reduce follow‑up questions.
Step‑By‑Step, So You File Cleanly
- Map your universe of non‑U.S. assets. Pull year‑end statements and identify anything that is outside the U.S. system or issued by a non‑U.S. person.
- Separate items that are reportable elsewhere. Some assets are already disclosed on forms like 3520, 3520‑A, 5471, 8621, or 8865. For those, you list the forms on Part IV of Form 8938 instead of duplicating full details. You still count their value to see if you cross the threshold.
- Find the maximum value for each item, then convert using the required year‑end rate. Keep the source and the rate with your workpapers.
- Complete Parts I through VI of Form 8938 as they apply to you, then attach the form to your Form 1040. File it by your return deadline, including extensions.
- Cross check with FBAR. If your foreign accounts’ aggregate maximum value exceeded $10,000 at any point in the calendar year, you also need FBAR, which is filed separately through FinCEN, due April 15 with an automatic extension to October 15.
Form 8938 vs. FBAR, Side By Side
| Item | Form 8938 (FATCA) | FBAR, FinCEN Form 114 |
| Filed with | Your Form 1040, due with your income tax return, including extensions | FinCEN’s BSA E‑Filing system, due April 15, automatic extension to October 15 |
| What it covers | Specified foreign financial assets, including accounts and certain non‑account investments | Foreign financial accounts only |
| Threshold | $50,000 to $600,000, depending on status and residency | $10,000 aggregate across accounts at any time during the year |
| Currency rate | Treasury year‑end rate for your tax year | Treasury year‑end rate for the calendar year |
| If you file one, can you skip the other? | No | No |
Sources: IRS comparison page for 8938 vs FBAR, IRS Form 8938 instructions, and IRS and FinCEN FBAR guidance.
Many people must file both. Think of Form 8938 as the broader FATCA disclosure attached to your return, and FBAR as the annual FinCEN account report with a lower trigger.
Penalties, Fixing Past Omissions, And Staying Compliant
Missing Form 8938 can get costly. The IRS can assess a $10,000 penalty for failing to file a complete and correct form by your due date. If you still do not file within 90 days after the IRS mails a notice, the penalty can increase by $10,000 for every 30 days, up to $50,000 more. Married joint filers are treated as one person for this penalty.
There is also a separate 40% accuracy‑related penalty on the portion of any underpayment tied to undisclosed foreign financial assets. If foreign income was not reported, this can add up quickly. The statute of limitations can extend to six years when more than $5,000 of income from a specified foreign asset is omitted, and it can remain open for items related to unfiled Form 8938 until the missing information is provided.
How To Fix A Missed Year
- If your mistake was non‑willful, file an amended return, add the missing Form 8938, and correct any income. Consider the Streamlined Filing Compliance Procedures, which are designed for non‑willful cases and provide a clear path back into compliance.
- If you may have willful exposure, talk to a qualified tax attorney about the IRS Criminal Investigation Voluntary Disclosure Practice before you amend. Pre‑clearance and full cooperation are required.
Do not file a “quiet disclosure” and hope for the best. Choose the right compliance path up front and document your facts and timing carefully.
Common Mistakes We See
- Counting only year‑end balances instead of maximum values.
- Ignoring foreign pensions or cash‑value life insurance.
- Forgetting assets already reported on other forms still count toward the threshold.
- Mixing FBAR and Form 8938 rules, then filing one and skipping the other.
- Using mid‑year exchange rates instead of the required year‑end Treasury rate.
For CPA Firms And Finance Leaders
If you run a firm, you already know that international information reporting gets messy when files lack structure, workpapers are inconsistent, and review loops stall. If you are expanding advisory and tax services and need help building disciplined workflows for Form 8938 and FBAR seasons, use SOP‑driven workpapers, clear review tiers, and deadline‑backed SLAs. That kind of delivery architecture keeps partner time focused on strategy, not rework. When it is the right fit, Accountably integrates trained offshore teams into your system to support standardized workpapers, layered reviews, and predictable turnaround, without sacrificing control or security. Use it sparingly, where it makes sense for production stability in peak months.
FAQs
Who must file Form 8938?
You file if you are a specified person, you are required to file a U.S. income tax return, and the total value of your specified foreign financial assets exceeds the threshold for your status and location. Individuals living abroad have higher thresholds, and certain closely held passive domestic entities have filing duties too.
How is Form 8938 different from FBAR?
Form 8938 is a FATCA disclosure attached to your Form 1040 that covers specified foreign financial assets, including some non‑account investments. FBAR is a FinCEN filing focused on foreign financial accounts, with a much lower $10,000 aggregate threshold and an April 15 due date that automatically extends to October 15. Many taxpayers must file both.
What exchange rate should I use?
Use the Treasury Bureau of the Fiscal Service rate on the last day of your tax year to convert foreign currency values into U.S. dollars. If there is no Treasury rate for your currency, use a public rate that converts into dollars and disclose the source on the form.
What is the filing deadline for Form 8938?
File Form 8938 with your Form 1040 by your tax return due date, including extensions. If you do not need to file a U.S. income tax return for the year, you do not file Form 8938, even if you exceed the thresholds.
What if I missed a year?
If the lapse was non‑willful, consider the Streamlined Filing Compliance Procedures. If you think it might be willful, speak with a tax attorney about the Voluntary Disclosure Practice before filing anything. Correct the returns, attach Form 8938, and keep organized workpapers that support your exchange rates and values.
Closing Thoughts
Form 8938 is not meant to be scary. It is a checklist, a set of fields, and a discipline around documentation. Start with a clean inventory, apply the right thresholds, use the required year‑end exchange rate, and keep a one‑page summary that ties it all together for your files and your reviewer. If you discover a gap from a prior year, handle it directly and choose the correct compliance path. That measured approach protects you from avoidable penalties and keeps your attention on planning, not cleanup.