Form 8938 vs FBAR: Which Foreign Account Reports You Owe and When
Form 8938 vs FBAR: Which Foreign Account Reports You Owe and When
FBAR and Form 8938 are not duplicates. They are two separate filings to two separate U.S. agencies, with different thresholds, different scopes, and different penalties. Most American expats with foreign accounts owe both. This guide shows you the decision tree.
The short answer
If you are a U.S. citizen or green-card holder with foreign financial accounts, you may need to file:
- FBAR (FinCEN Form 114) if your aggregate foreign-account value exceeded $10,000 at any point during the year, filed separately to the Treasury’s FinCEN.
- Form 8938 (Statement of Specified Foreign Financial Assets) if you exceed asset thresholds that vary by filing status and residency, filed with your Form 1040 to the IRS.
The thresholds, scope, and penalties are different. Owing one does not exempt you from the other. Most American expats with meaningful foreign holdings end up filing both.
Side-by-side comparison
| FBAR (FinCEN Form 114) | Form 8938 | |
|---|---|---|
| Filed with | Treasury — FinCEN BSA E-Filing | IRS — attached to Form 1040 |
| Threshold (single, abroad) | $10,000 aggregate at any point during the year | $200,000 end-of-year OR $300,000 at any point |
| Threshold (married jointly, abroad) | $10,000 aggregate at any point during the year | $400,000 end-of-year OR $600,000 at any point |
| Threshold (single, U.S.) | Same — $10,000 | $50,000 end-of-year OR $75,000 at any point |
| What’s reported | Foreign financial accounts only — bank, brokerage, mutual fund, certain insurance products | “Specified foreign financial assets” — broader, includes accounts plus some non-account assets like foreign stock held outside an account, partnership interests, foreign-issued life insurance |
| Account type covered | Bank, brokerage, mutual fund, foreign-currency e-money platforms (Wise foreign-currency balances), some retirement accounts | All of FBAR PLUS direct holdings of foreign securities, foreign hedge funds, certain partnership interests |
| Crypto on foreign exchange | Currently NOT required (per FinCEN’s standing position — subject to future change) | May be required if held via foreign-domiciled financial intermediary |
| Due date | April 15 with automatic extension to October 15 | Same as Form 1040 — April 15, expat extension to June 15, further extension to October 15 |
| Penalty for non-filing (non-willful) | $10,000 per year (inflation-adjusted) | $10,000 initial, up to $50,000 for continued failure |
| Penalty for non-filing (willful) | Greater of $129,210 (inflation-adjusted) or 50% of account balance | 40% accuracy-related penalty on understatements; criminal penalties under 26 USC §7201 |
The decision tree
Step 1: Sum your foreign account balances
Pull statements from every foreign financial account you held during the year — checking, savings, investment, retirement (where considered an account), Wise foreign-currency balances. Find the maximum aggregate value reached at any point during the year. If it is $10,000 or more (about $830/month average across one account, or any single moment crossing $10K), you owe FBAR.
Step 2: Add asset-only foreign holdings
Form 8938 includes everything FBAR includes PLUS some assets that aren’t held in an account:
- Foreign stock held in physical certificate form (rare)
- Foreign partnership interests
- Foreign hedge fund interests
- Foreign-issued life insurance with cash value
- Foreign mutual fund holdings (PFICs)
Sum these with your account balances. Compare against the Form 8938 threshold matching your filing status and residency. If you cross the threshold, you owe Form 8938 as well.
Step 3: Don’t forget Schedule B
Schedule B (Part III) is required for any U.S. taxpayer who held a foreign financial account at any time during the year, regardless of dollar amount, separate from FBAR and Form 8938. The check-the-box at the top of Part III flags the IRS to expect FBAR; failure to check the box when an account exists is itself a red flag.
Common scenarios
Scenario 1: Single American living in Spain, EU bank account with $15,000
FBAR: yes ($15K > $10K). Form 8938: no ($15K well below the $200K threshold for single living abroad). Schedule B: yes (any foreign account triggers it). One filing year for FBAR via FinCEN; mark Schedule B Part III on the 1040.
Scenario 2: Married couple in Portugal, $250,000 across two Portuguese accounts
FBAR: yes ($250K aggregate well above $10K — both spouses can file jointly on FBAR if jointly owned). Form 8938: no ($250K below the $400K end-of-year threshold for married filing jointly abroad — but if max-during-year exceeded $600K, would owe). Schedule B: yes.
Scenario 3: Single American expat with Schwab International ($300K) + Wise EUR balance ($25K) + Spanish bank ($5K)
FBAR: yes for Wise EUR + Spanish bank ($30K aggregate of foreign-held assets). Schwab International is a U.S. account and is not foreign for FBAR purposes. Form 8938: no ($30K of foreign assets, well below $200K threshold). Schedule B: yes.
Scenario 4: Single American in Spain holding €250,000 in Sabadell + €50,000 in foreign mutual funds
FBAR: yes. Form 8938: yes — €300K in foreign assets crosses the $300K-at-any-point threshold even at moderate exchange rates. Form 8621: yes for each foreign mutual fund (PFIC reporting per fund per year — see PFICs Explained). Schedule B: yes.
The “I missed prior-year filings” problem
If you owe FBAR and/or Form 8938 for a prior year and did not file, do not just start filing the current year and hope the past goes away. The IRS Streamlined Filing Compliance Procedures and Delinquent FBAR Submission Procedures exist specifically for this. They are amnesty-style programs that allow late filers to come into compliance without the willful penalty if they meet the eligibility criteria.
Do not attempt the Streamlined process without a tax professional. The rules around willfulness, eligibility, and the 5-year FBAR look-back are subtle, and a mishandled Streamlined submission can convert non-willful exposure into willful exposure.
Sources
- FBAR — FinCEN, “Report of Foreign Bank and Financial Accounts”: fincen.gov/report-foreign-bank-and-financial-accounts
- Form 8938 — IRS, “About Form 8938”: irs.gov/forms-pubs/about-form-8938
- Streamlined Filing Compliance Procedures — IRS: irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures
- IRS Publication 54: irs.gov/forms-pubs/about-publication-54