If you have money or assets in foreign countries, you may need to fill out two forms: Form 8938 and FBAR. They are not the same thing and they have different rules and limits.
Form 8938 goes with your tax return to the IRS, while FBAR goes to a different agency called FinCEN and you have to file it online.
- Form 8938 is for certain people and businesses that have money or assets in foreign countries that are worth more than a certain amount. The amount depends on whether you are single or married and whether you live in the U.S. or abroad.
- FBAR is for anyone who has access to or control over foreign bank accounts or other accounts that are worth more than $10,000 in total at any point during the year.
- The kinds of money or assets that you have to report on Form 8938 include foreign bank accounts, stocks, trusts, pensions, and contracts or instruments. The kinds of accounts that you have to report on FBAR include bank accounts, brokerage accounts, mutual funds, and other types of accounts with a foreign financial institution.
- You may have to fill out both Form 8938 and FBAR if you have enough money or assets in foreign countries to meet both limits. Filling out one form doesn’t mean you don’t have to fill out the other one.
- There are some exceptions and exclusions for both forms. For example, you don’t have to report an account on Form 8938 if your spouse already reported it on a joint FBAR.
- The deadline for Form 8938 is the same as your tax return deadline (including extensions), while the deadline for FBAR is April 15 (but you can get an automatic extension to October 15).
- The penalties for not filling out Form 8938 or FBAR can be very harsh, from $10,000 to $100,000 or more per mistake for Form 8938 and $10,000 to $50,000 or more per mistake for FBAR.
References
BSA E-Filing System (treas.gov) – File FBAR
Form 8938 (irs.gov), Statement of Specified Foreign Financial Assets