FBAR vs. Form 8938: Do You Need One or Both?

FBAR and Form 8938 are separate reporting requirements, and depending on what you own, where you live and how much your foreign accounts and assets are worth, you may need to file one, both or neither.

The overlap is where people get caught out. At Bright!Tax, we regularly see expats assume that filing an FBAR covers Form 8938 too—or that the higher Form 8938 thresholds mean they have nothing to report at all.

The forms cover different assets, go to different agencies and come with their own not-so-charming penalties. Here’s how to work out which one applies to you.

What is FBAR (FinCEN Form 114)?

If the combined value of your foreign financial accounts exceeded $10,000 at any point during the calendar year—even briefly—you may need to file a Foreign Bank Account Report.

Known officially as FinCEN Form 114, the FBAR is required under the Bank Secrecy Act. You file it with FinCEN, although the IRS is responsible for investigating violations and assessing civil penalties.

Here’s what triggers FBAR reporting:

• You’re a U.S. person—including a citizen, resident or U.S.-formed entity—and
• The aggregate value of your reportable foreign financial accounts exceeded $10,000 at any time during the calendar year

This includes more than bank accounts. Depending on the circumstances, you may also need to report:

• Brokerage accounts overseas
• Some foreign retirement accounts
• Foreign life insurance or annuity policies with cash value
• Accounts over which you have signature authority, even if the money isn’t yours

And no, it’s not filed with your tax return. The FBAR has its own digital home: the BSA E-Filing System, run by FinCEN. Because apparently we all needed another portal in our lives.

What is Form 8938 (Statement of Specified Foreign Financial Assets)?

If FBAR is the U.S. government asking about your foreign financial accounts, Form 8938 expands the conversation to certain other foreign financial assets.

Filed with your annual tax return, Form 8938 is part of FATCA—the Foreign Account Tax Compliance Act. It applies to specified individuals and certain domestic entities whose foreign financial assets exceed the relevant reporting threshold. That threshold varies based on your filing status and whether you live in the U.S. or abroad.

Reportable assets can include:

• Financial accounts maintained by foreign financial institutions
• Foreign stocks or securities held outside a financial account
• Interests in foreign corporations, partnerships, trusts and estates
• Foreign mutual funds
• Interests in certain foreign pensions and deferred compensation plans
• Foreign-issued insurance or annuity contracts with cash-surrender value

Foreign real estate isn’t reported directly on Form 8938. However, if you hold it through a foreign corporation, partnership, trust or estate, your interest in that entity may be reportable.

Unlike FBAR, Form 8938 gets attached directly to your IRS Form 1040. The forms sometimes cover the same accounts, but Form 8938 can also reach foreign financial assets that aren’t held in an account.

Filing requirements and reporting thresholds: Do you meet the criteria?

The million-dollar question—sometimes literally—is whether you actually need to file. Here’s where FBAR and Form 8938 draw the line, using very different rulers.

FBAR filing requirements

You must file an FBAR if:

• You’re a U.S. person, including a citizen, resident alien or qualifying domestic entity, and
• The aggregate value of all your reportable foreign financial accounts exceeded $10,000 at any point during the calendar year

The threshold applies to your accounts collectively, not one at a time. If you meet it, you generally report all your reportable foreign accounts—even those with relatively small balances.

Form 8938 filing thresholds

The Form 8938 thresholds depend on your filing status and where you live:

• Single or married filing separately, U.S.-based: More than $50,000 at year-end or $75,000 at any point
• Married filing jointly, U.S.-based: More than $100,000 at year-end or $150,000 at any point
• Single or married filing separately, living abroad: More than $200,000 at year-end or $300,000 at any point
• Married filing jointly, living abroad: More than $400,000 at year-end or $600,000 at any point

The higher overseas thresholds apply only if you meet Form 8938’s test for living abroad.

And what about everyone else?

Nonresident aliens generally aren’t required to file either form, although exceptions can apply when someone elects or is otherwise treated as a U.S. resident for tax purposes.

U.S. citizens and green card holders living abroad remain subject to the rules. But having foreign accounts doesn’t automatically mean you must file both forms—you still need to meet each form’s separate requirements.

File Form 114 or 8938—or both?

Here’s the catch: FBAR and Form 8938 don’t cancel each other out. Depending on what you own and its value, you may need to file either form or both.

For example, suppose you live abroad and hold $250,000 in foreign bank and investment accounts. If you’re unmarried and meet the applicable requirements:

• You exceed the $10,000 FBAR threshold.
• You also exceed the $200,000 year-end Form 8938 threshold.
• The same foreign accounts may therefore need to appear on both forms.

FBAR reports qualifying foreign financial accounts. Form 8938 also covers foreign financial accounts, but it can go further by covering assets such as directly held foreign stock, partnership interests and certain foreign financial contracts.

The forms also travel different routes: FBAR goes to FinCEN through the BSA E-Filing System, while Form 8938 goes to the IRS with your federal income tax return. Filing one does not satisfy the other.

Key differences: FBAR vs 8938

FBAR and Form 8938 may seem similar, but they play by different rules:

Key differences: FBAR vs Form 8938

FBAR and Form 8938 may seem similar, but they play by different rules:

	FBAR	Form 8938
Official name	FinCEN Form 114	Statement of Specified Foreign Financial Assets
Who files	U.S. persons, including individuals and domestic entities	Specified individuals and certain domestic entities
Main threshold	More than $10,000 across all reportable foreign accounts	Between $50,000 and $600,000, depending on filing status, residence and when the assets reached that value
What it covers	Foreign financial accounts	Foreign financial accounts and certain other foreign financial assets
Signature authority	Can trigger reporting even if you don’t own the account	Generally requires you to have an interest in the account or asset
Where it’s filed	FinCEN’s BSA E-Filing System	With your federal income tax return
Deadline	April 15, automatically extended to October 15	Your income tax return deadline, including extensions
Initial non-filing penalty	Up to $16,536 for a non-willful violation	$10,000, with further penalties after IRS notice

Penalties for non-compliance

Missing FBAR or Form 8938 reporting isn’t just an administrative oversight—it can lead to substantial penalties.

• FBAR penalties: The currently published maximum penalty for a non-willful violation is $16,536 per annual report. For a willful account-reporting violation, the maximum is the greater of $165,353 or 50% of the account balance at the time of the violation. These are maximums, however; penalties aren’t automatic, and reasonable-cause protections can apply.
• Form 8938 penalties: Failure to file can result in an initial $10,000 penalty. If the form remains missing for more than 90 days after the IRS mails a notice, additional penalties of $10,000 for each 30-day period can apply, up to an additional $50,000.
• Criminal penalties: These may apply in cases involving wilful tax or reporting violations.

If your failure was non-willful, the Streamlined Filing Compliance Procedures may provide a way to correct past filings. Qualifying taxpayers living abroad can receive relief from specified penalties under the Streamlined Foreign Offshore Procedures, while U.S. residents generally face a 5% miscellaneous offshore penalty under the domestic procedure.

Eligibility depends on your circumstances. If the IRS has already begun a civil examination of any of your tax returns, or you’re under an IRS criminal investigation, you can’t use the streamlined procedures.

When and how to file each form

Timing matters—and so does filing with the right agency.

• FBAR: Due April 15, with an automatic extension to October 15. You don’t need to request the extension. File electronically through the BSA E-Filing System rather than with your tax return.
• Form 8938: Due with your federal income tax return, including any applicable extension. Qualifying Americans abroad generally receive an automatic extension to June 15, while a requested extension can move the filing deadline to October 15.

Even when the forms report overlapping information, you must file them separately and follow each form’s valuation, filing and recordkeeping rules.

Don’t risk double trouble

FBAR and Form 8938 can cover some of the same accounts, but filing one doesn’t satisfy the other. Miss a required form and you could face penalties even if you filed the other perfectly.

If you hold foreign accounts, investment assets or interests in foreign entities, the first step is to assess the two requirements separately. That means checking what you own, how it’s held, its maximum value and which threshold applies to you.

Bright!Tax helps U.S. taxpayers abroad determine whether they need FBAR, Form 8938 or both—and prepares the required filings alongside their U.S. tax returns.

Ready to file with clarity and confidence? Reach out to Bright!Tax today and get ahead of the forms before they catch up to you.

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