Form 8938: What It Reports and When It Is Due

Form 8938: What It Reports and When It Is Due

Form 8938 is the IRS form that reports certain foreign financial assets to the government, and it is filed with your federal income tax return. It comes from a 2010 law known as FATCA, and it catches people who assume that the foreign account report they already file, or have never heard of, covers everything. It does not.

Here is what the form reports, who has to file it, when it is due and how it differs from the FBAR. This is a general explainer, not advice for your return.

One place to ask about how these rules apply to your situation is Iota Finance, a Florida firm whose live profile lists Cryptocurrency Investors, Digital Nomads and Equity Compensation among its specialties. Iota Finance is a vetted Sam's List member and a paying member of our featured program; payment does not buy the language we use or its reviews.

What Form 8938 Reports

The form lists specified foreign financial assets, along with their maximum value during the year and where they are held. It reports the assets, their maximum value, and the income, gain or loss from them and where you reported it. It does not replace reporting that income on your return in the usual places. No Form 8938 is required for a year in which you are not required to file an income tax return.

You attach it to your income tax return, so it is due when the return is due, including any extension. There is no separate filing date and no separate place to send it for most filers.

The form is only required if your total specified foreign financial assets are above the thresholds that apply to you. Below them, no form is needed, though income from the assets is still taxable.

The limitation: the form is an information report. Filing it does not mean you owe more tax, and not filing it when required can carry penalties of its own.

Specified Foreign Financial Assets: What Counts

The term covers financial accounts held at foreign financial institutions, such as bank, brokerage and similar accounts. It also covers certain assets held outside an account, such as foreign stock or securities, interests in foreign entities and some foreign-issued insurance or annuity contracts with a cash value.

It generally does not include real estate you hold directly, such as a vacation home abroad, or foreign currency you hold in your own hands. An interest in a foreign company that owns the property is a different matter, and may count.

Digital assets are an area where the guidance has been evolving. Whether coins held through a foreign exchange count as a specified foreign financial asset can depend on how the account is structured and on current IRS instructions. Ask a preparer who handles crypto, and check the instructions for the tax year.

The limitation: the definition is technical. Two assets that look alike can be treated differently, so do not decide by analogy.

FATCA Reporting Thresholds Depend on Where You Live and How You File

The filing thresholds vary by residency and filing status. For taxpayers living in the United States, a single filer generally must file if specified foreign assets are worth more than $50,000 on the last day of the year or more than $75,000 at any time during the year. For married couples filing jointly, the figures are $100,000 and $150,000.

For taxpayers who live abroad and meet the IRS tests for a foreign residence, the thresholds are higher: generally $200,000 at year end or $300,000 at any time for a single filer, and $400,000 and $600,000 for joint filers.

Two points trip people up. First, the test looks at the highest value during the year, not only the year-end balance. Second, the assets of several accounts are added together, so a few modest accounts can cross the line.

The limitation: these are the figures as generally understood at the date of this post. Confirm the current thresholds and your own status on the IRS website before relying on them.

Form 8938 vs FBAR: Two Reports, Not One

The FBAR is a different report. It is filed with the Treasury's financial crimes bureau, not with your tax return, and it is triggered when the combined value of your foreign financial accounts goes above $10,000 at any time during the year. It is filed electronically and has its own due date, with an automatic extension available.

The two reports overlap but are not the same. The FBAR covers foreign financial accounts and has a low threshold. Form 8938 covers a wider set of assets, including some held outside accounts, and has higher thresholds. Filing one does not satisfy the other.

Many people with foreign accounts file both. Someone who qualifies for only one may be surprised to learn that is possible, and the reverse happens too.

The limitation: the overlap rules are easy to misread. If you have foreign accounts, ask a preparer to confirm in writing which reports you need each year.

When Form 8938 Is Due and What Late Filing Can Cost

Form 8938 is due with your return, so for most individuals the date is the regular filing deadline in April, with an extension available. An extension of time to file your return generally extends the form too.

The penalty for failing to file when required is generally $10,000. If the failure continues after the IRS sends a notice, additional penalties can apply, up to a stated maximum. There is also a penalty for underpayments tied to undisclosed foreign assets.

A missing form has another effect. The time limit for the IRS to assess tax on your return can stay open for longer when a required form was not filed. That makes catching up sooner worth more than waiting.

The limitation: penalties can be reduced or waived for reasonable cause, and the IRS has programs for people who missed filings. Which applies to you depends on your facts.

Where Iota Finance Fits

Iota Finance is based in Florida, founded in 2022, with seven employees, serving clients nationwide. Igor Tutelman, CPA, is the Managing Partner. Its live profile describes monthly accounting, tax and fractional CFO services for small businesses, startups and entrepreneurs, and lists Cryptocurrency Investors, Digital Nomads and Equity Compensation as specialties.

Iota Finance has 14 verified client reviews on Sam's List. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Iota Finance is a paying member of our featured program, and payment does not buy its reviews. Ratings and rankings are not indicative of future performance or results.

The limitation, plainly: the profile lists minimums of $200,000 in income, $500,000 in revenue and $500,000 raised, and it does not say whether they are alternatives or all required, so confirm directly. It also does not mention foreign account reporting by name, so ask whether the firm prepares Form 8938 and the FBAR and how it treats digital assets held abroad.

Frequently Asked Questions

What is Form 8938?

It is an IRS form that reports specified foreign financial assets above set thresholds. It is filed with your income tax return and lists the assets, their maximum value during the year, where they are held and the related income or loss. It does not replace reporting the related income on your return.

Who has to file Form 8938?

U.S. taxpayers whose specified foreign financial assets exceed the thresholds for their residency and filing status. A single filer living in the United States generally files above $50,000 at year end or $75,000 at any time. Thresholds are higher abroad.

Is Form 8938 the same as the FBAR?

No. The FBAR is filed separately with the Treasury and is triggered at $10,000 in aggregate foreign account value at any time. Form 8938 is filed with your return and has higher thresholds. Many people must file both, and filing one does not replace the other.

What is the penalty for not filing Form 8938?

The penalty for failing to file when required is generally $10,000, with additional penalties if the failure continues after an IRS notice. Reasonable cause relief may be available. Confirm your situation with a qualified tax professional.

If you hold foreign accounts, list them with the highest balance each reached this year, then compare that list to the thresholds before you file. You can browse accountants on Sam's List, including the firm above, and ask each one whether it prepares Form 8938 and how it treats foreign digital assets.

---

About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.