Guide // Foreign Reporting
FBAR and Form 8938 are often confused because both deal with foreign financial holdings, but they are not interchangeable. They are filed with different agencies, use different thresholds, apply to different categories of assets, and can both be required in the same year. For expats, misunderstanding that difference is one of the quickest ways to create avoidable filing risk.
The FBAR is FinCEN Form 114, filed separately through the Treasury’s BSA E-Filing system. FinCEN states that a U.S. person must file if the aggregate value of foreign financial accounts exceeds $10,000 at any point during the calendar year. The test is therefore account-based and threshold-based, not a general “foreign asset” rule.
Form 8938 is filed with the tax return and applies to specified foreign financial assets. The IRS states that for taxpayers living abroad, the threshold is generally more than $200,000 on the last day of the year or more than $300,000 at any time during the year for non-joint filers, and more than $400,000 on the last day of the year or more than $600,000 at any time during the year for joint filers. The form covers not only foreign financial accounts, but also certain interests in foreign entities, pensions, deferred compensation arrangements, and foreign-issued investment contracts.
The IRS explicitly states that the Form 8938 filing requirement does not replace the FBAR requirement. A taxpayer may therefore need to file both forms in the same year. The easiest example is a married couple abroad with foreign bank and brokerage accounts: the FBAR threshold can be crossed long before the higher Form 8938 thresholds are reached, but once specified foreign financial assets also exceed the Form 8938 thresholds, both filings can become mandatory.
The asset scope also differs. The IRS explains that foreign real estate held directly is not itself reported on Form 8938, though an interest in a foreign entity that owns the real estate may be reportable. It also confirms that certain foreign pensions and deferred compensation plans may be reportable on Form 8938 where thresholds are met. Those distinctions matter because many taxpayers assume “foreign property” and “foreign financial assets” are the same concept when they are not.
The FBAR is due on April 15 with an automatic extension to October 15. Form 8938 is due with the income tax return, including valid extensions. Missing either filing can trigger material penalties. The IRS states that failure to file Form 8938 may lead to a $10,000 penalty plus additional continuation penalties after notice, while FBAR non-compliance can also produce significant penalties depending on the facts.
A simple rule of thumb helps: FBAR asks where your foreign accounts are and whether their aggregate value crossed $10,000; Form 8938 asks whether your broader specified foreign financial assets exceed the higher IRS thresholds. For many expats, both questions must be answered every year.
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