Form 8938 Filing Requirements: Thresholds, FBAR, and Penalties

You must file Form 8938, the Statement of Specified Foreign Financial Assets, with your federal income tax return if the total value of your foreign financial assets crosses the dollar thresholds set under the Foreign Account Tax Compliance Act. The lowest threshold is $50,000 on the last day of the tax year for an unmarried taxpayer living in the United States, and thresholds climb from there based on filing status and whether you live abroad. Skipping the form when you were required to file starts at a $10,000 penalty and gets worse from there, even if you owed no additional tax.

Who Has to File

The requirement applies to any “specified individual”: U.S. citizens, anyone who was a U.S. resident alien for any part of the tax year, nonresident aliens who elect to file jointly with a U.S. spouse, and bona fide residents of American Samoa or Puerto Rico.¹

Certain closely held domestic corporations, partnerships, and trusts also file. A domestic corporation or partnership is caught when at least 50 percent of its gross income is passive, or at least 50 percent of its assets produce (or are held to produce) passive income.² A domestic trust qualifies if it has one or more specified persons as a current beneficiary.³

The Dollar Thresholds

Form 8938 uses a dual trigger. You file if you cross either the last-day-of-the-year value or the any-time-during-the-year value. Hitting one is enough.

Living in the United States

If you are unmarried or married filing separately, you file when your specified foreign financial assets exceed $50,000 on December 31 or exceed $75,000 at any point during the year.

If you are married filing jointly, the combined value must exceed $100,000 on December 31 or exceed $150,000 at any point during the year.⁴

Living Abroad

Substantially higher numbers apply if you qualify as living outside the United States, which means meeting either the bona fide residence test or the 330-day physical presence test.¹

Unmarried or married filing separately: the threshold is $200,000 on the last day of the year, or $300,000 at any time. Married filing jointly: $400,000 on the last day, or $600,000 at any time. Joint filers get the higher joint threshold even if only one spouse lives abroad.⁵

Specified Domestic Entities

The entities described above file when their specified foreign financial assets exceed $50,000 on the last day of the year, or $75,000 at any time during the year.⁶

Married Couples Filing Jointly

Spouses filing jointly submit one Form 8938 covering every asset in which either spouse has an interest. You report the maximum value of the whole asset, not a half-share. Separately held accounts go on the same form and both count against the joint threshold.¹

What Counts Toward the Threshold

The definition is broader than most people expect and covers two families of assets: foreign financial accounts, and foreign non-account assets held for investment.

Any financial account maintained by a foreign financial institution is included. That covers savings, checking, deposit, and brokerage accounts held at foreign banks and broker-dealers.⁷

Non-account assets are reportable when you hold them for investment and not inside an account at a financial institution:⁸

Stock or securities issued by a non-U.S. person and held directly.
Partnership interests, ownership stakes in foreign corporations, and interests in foreign trusts or estates.
Life insurance and annuity contracts issued by foreign insurers that have a cash surrender value.
Interests in foreign pension plans, foreign retirement accounts, and foreign deferred compensation arrangements.
Financial instruments or contracts held for investment where the issuer or counterparty is a non-U.S. person.

Foreign retirement accounts deserve a second look. Plans such as Canadian RRSPs are reportable on Form 8938 even though Revenue Procedure 2020-17 exempts some foreign retirement trusts from reporting on Forms 3520 and 3520-A. That exemption does not carry over.³

What Does Not Count

A foreign stock or mutual fund held inside a brokerage account at a U.S. financial institution is not a specified foreign financial asset. Neither is a domestic IRA, 401(k), or other qualified U.S. retirement plan held at a U.S. institution.⁸ If you bought shares of a foreign company through Schwab or Fidelity, they don’t count.

Directly held foreign real estate is not reportable. A vacation home, rental, or personal residence abroad that you own in your own name does not go on Form 8938. If instead you hold that property through a foreign corporation or partnership, then the interest in that entity is reportable and its value reflects the property.⁸

Assets you already report in detail on Form 5471, Form 8865, Form 8621, or Form 3520/3520-A do not need duplicate detailed reporting. You still note them in Part V of Form 8938 so the IRS can cross-reference.⁹

Form 8938 Is Not the FBAR

People often assume filing one takes care of the other. It doesn’t. The FBAR (FinCEN Form 114) covers only financial accounts and triggers at a $10,000 aggregate balance at any point in the calendar year. Form 8938 has higher thresholds but reaches non-account assets like directly held foreign stock and interests in foreign entities.⁶ Reporting an account on your FBAR does not remove it from the Form 8938 calculation, and many taxpayers with foreign accounts have to file both.

Valuing Assets and Filing the Form

You report the maximum value each asset reached at any point during the tax year, not just the year-end balance. For assets denominated in a foreign currency, convert using the Treasury Reporting Rates of Exchange for the last day of the tax year, published by the U.S. Treasury’s Fiscal Data site.¹⁰ If Treasury doesn’t publish a rate for a particular currency, use another commercially available rate and apply it consistently.

Form 8938 is not filed on its own. You attach it to your Form 1040, and it follows the same deadline. For the 2025 tax year filed in 2026, that deadline is April 15, 2026. Filing Form 4868 pushes it to October 15. If you live and work abroad and meet the presence-abroad test, you get an automatic two-month extension to June 15 without filing anything, though interest still runs on any unpaid tax from April 15; Form 4868 then extends the deadline another four months to October 15.¹¹

Penalties for Failing to File

The penalty structure stacks, and it doesn’t require any underpayment of tax to start running.

The base failure-to-file penalty is $10,000 for each tax year you don’t file the form.¹² If you still haven’t filed 90 days after the IRS mails you a notice, another $10,000 is added for every 30-day period (or partial period) you keep not filing. The additional penalties cap at $50,000 per failure, so a single year can carry up to $60,000.¹³

If the missing disclosure led to an underpayment of tax, the accuracy-related penalty doubles from 20 percent to 40 percent of the shortfall.¹⁴ Willful noncompliance can also result in criminal prosecution with fines and imprisonment.

The quietest part of the penalty regime is the one that catches most people. If you never file a required Form 8938, the statute of limitations on your entire tax return does not start running. The IRS can assess tax at any time until three years after you eventually turn the form in.¹⁵ Separately, if you filed your return on time but omitted more than $5,000 in gross income tied to a reportable foreign financial asset, the normal three-year assessment window stretches to six years.¹⁶

If You’ve Already Missed a Filing

Penalties don’t apply if the failure was due to reasonable cause and not willful neglect. The statute is clear on one thing that doesn’t work as an excuse: the risk that a foreign country would penalize you for disclosing the information is not reasonable cause.¹² You carry the burden of proof, and the IRS looks at the full facts. Reliance on a qualified tax professional who had complete information, or genuine unawareness followed by prompt compliance, are the most common grounds.

If you have unreported foreign income along with missing Form 8938s (and possibly FBARs), the Streamlined Filing Compliance Procedures let you get current with reduced or eliminated penalties, provided you can certify your failure was non-willful. You are not eligible if the IRS has already opened a civil examination of any of your returns or if you are under criminal investigation.¹⁷

If the only issue is a missing Form 8938 and you have no unreported income, the Delinquent International Information Return Submission Procedures may be simpler. You attach the late form to an amended return with a reasonable cause statement. Penalties may still be assessed at first, and you may need to respond to IRS correspondence to have them removed based on your reasonable cause argument.¹⁸

1
Internal Revenue Service. Instructions for Form 8938 (11/2021)
2
eCFR. 26 CFR 1.6038D-6 – Specified Domestic Entities
3
Internal Revenue Service. Instructions for Form 8938
4
Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets?
5
Internal Revenue Service. Summary of FATCA Reporting for U.S. Taxpayers
6
Internal Revenue Service. Comparison of Form 8938 and FBAR Requirements
7
eCFR. 26 CFR 1.6038D-3 – Specified Foreign Financial Assets
8
Internal Revenue Service. Basic Questions and Answers on Form 8938
9
eCFR. 26 CFR 1.6038D-7 – Exceptions From the Reporting of Certain Assets Under Section 6038D
10
U.S. Treasury Fiscal Data. Currency Exchange Rates Converter
11
Internal Revenue Service. Form 4868 – Application for Automatic Extension of Time To File U.S. Individual Income Tax Return
12
Office of the Law Revision Counsel. 26 USC 6038D – Information With Respect to Foreign Financial Assets
13
eCFR. 26 CFR 1.6038D-8 – Penalties for Failure to Disclose
14
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
15
Office of the Law Revision Counsel. 26 USC 6501 – Limitations on Assessment and Collection
16
Office of the Law Revision Counsel. 26 USC 6501 – Limitations on Assessment and Collection
17
Internal Revenue Service. Streamlined Filing Compliance Procedures
18
Internal Revenue Service. Delinquent International Information Return Submission Procedures