Living abroad brings its own set of adventures and challenges, especially when it comes to navigating U.S. tax obligations. If you’re an expat with a financial footprint across borders, you’ll need to familiarize yourself with IRS Form 8938, a key component of the Foreign Account Tax Compliance Act (FATCA).

WHAT IS FORM 8938?

Form 8938, titled “Statement of Specified Foreign Financial Assets” is a tax form required by the U.S. Internal Revenue Service (IRS) for taxpayers to report their specified foreign financial assets if the total value of those such foreign bank assets exceeds certain thresholds. It was introduced as part of the Foreign Account Tax Compliance Act (FATCA) to combat tax evasion and ensure U.S. persons are reporting their foreign income.

The form is filed along with the taxpayer’s annual income tax return, and the reporting thresholds vary depending on the taxpayer’s filing status and whether they live in the U.S. or abroad.

WHO NEEDS TO FILE IRS FORM 8938?

IRS Form 8938 must be filed by U.S. taxpayers (citizens, residents, and certain nonresidents) who have specified foreign financial assets exceeding certain thresholds. These thresholds depend on the taxpayer’s filing status and residency:

• U.S. Residents:
  • Single or married filing separately: Assets over $50,000 on the last day of the tax year or over $75,000 at any time during the year.
  • Married filing jointly: Assets over $100,000 on the last day of the tax year or over $150,000 at any time during the year.
• Non-U.S. Residents:
  • Single or married filing separately: Assets over $200,000 on the last day of the tax year or over $300,000 at any time during the year.
  • Married filing jointly: Assets over $400,000 on the last day of the tax year or over $600,000 at any time during the year.

  Even if the reporting thresholds are met, Form 8938 is only required if the taxpayer is required to file a U.S. tax return.

WHAT ARE FOREIGN FINANCIAL ASSETS?

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