Keeping money, investments or signing authority outside the United States is common for international families. The reporting can be less intuitive. The same account may appear on more than one U.S. form, and filing an income tax return does not automatically complete the separate FBAR obligation.
Two systems cause most confusion: the Report of Foreign Bank and Financial Accounts, known as the FBAR, and Form 8938 under the Foreign Account Tax Compliance Act, commonly called FATCA.
FBAR and Form 8938 overlap, but they are not substitutes for one another. You may need one, both or neither, depending on your status, assets and values.
FBAR and Form 8938 at a glance
| Question | FBAR | Form 8938 |
|---|---|---|
| Official form | FinCEN Form 114 | IRS Form 8938 |
| Where filed | Electronically through FinCEN’s BSA E-Filing System | Attached to the relevant federal income tax return |
| Basic trigger | Aggregate foreign financial accounts exceed the reporting threshold at any point in the calendar year | Specified foreign financial assets exceed the applicable threshold |
| Who can be affected | U.S. persons, including citizens, residents and certain entities | Specified individuals and certain domestic entities |
| Deadline | Generally April 15, with an automatic extension to October 15 | Due with the federal return, including an applicable extension |
The IRS comparison of Form 8938 and FBAR is the safest starting point because it shows how the filers, assets, thresholds and valuation rules differ.
Who is a U.S. person for FBAR purposes?
FBAR can apply to a U.S. citizen, U.S. resident and certain U.S. entities. For international movers, the first question is often when U.S. tax residency begins. A person who meets the green card or substantial presence test may enter the reporting system even while most accounts remain abroad.
Start with the separate guide, Are You a U.S. Tax Resident?, then confirm the FBAR definition and any treaty-related complications with a qualified tax professional.
The FBAR threshold is aggregate
A U.S. person generally has an FBAR filing obligation when the combined maximum value of all reportable foreign financial accounts exceeds $10,000 at any time during the calendar year. This is not a per-account threshold.
For example, three foreign accounts may each remain below $10,000 but still create an FBAR obligation if their combined value exceeds the threshold at the same point in the year.
Do not report only the account that pushed the total above the threshold. If the filing requirement applies, all reportable foreign accounts generally need to be considered.
Accounts people commonly miss
- Everyday current, checking and savings accounts
- Fixed deposits and notice accounts
- Foreign brokerage and investment accounts
- Some foreign pension or retirement accounts
- Accounts owned jointly with a spouse, parent or business partner
- Accounts held by an entity where the person has a reportable financial interest
- Accounts where the person has signature or other authority but does not own the money
- Accounts closed during the year after reaching a reportable maximum value
Account classification can be technical. A foreign asset may be relevant to Form 8938 but not FBAR, or vice versa. Cryptocurrency and digital asset arrangements can also require specific analysis based on where and how the asset is held.
Form 8938 uses different thresholds
Form 8938 thresholds depend on filing status and whether the taxpayer is considered to live inside or outside the United States. They are generally higher than the FBAR threshold, but Form 8938 can cover a wider range of specified foreign financial assets.
For an unmarried person living in the United States, the published threshold is generally more than $50,000 on the last day of the tax year or more than $75,000 at any point during the year. Different and higher thresholds apply to joint filers and qualifying taxpayers living abroad.
Do not use that one threshold without checking your filing status and residence. Review the current Form 8938 instructions for the applicable year.
Income reporting is a separate obligation
Reporting an account does not report the income earned inside it. Interest, dividends, capital gains, rent and other income may need to appear elsewhere on the tax return, even if the account itself falls below an information-reporting threshold.
This is a common first-year mistake. The preparer receives an account list for FBAR purposes, but not the statements needed to calculate taxable income. Give the adviser both.
A practical annual account inventory
Create one master list and update it throughout the year. Include:
- Institution name and country
- Account type and account number
- Legal owner or owners
- Whether you have signature authority
- Date opened and closed
- Highest balance during the calendar year
- Year-end balance
- Currency and conversion method
- Income earned and tax withheld
- Whether the account also holds foreign funds, companies or trust assets
Use source statements, not a reconstructed estimate months later. The FBAR generally uses the maximum account value converted to U.S. dollars under the applicable exchange-rate method.
Joint accounts and signature authority need separate attention
A person can have a reporting obligation even when the money is not economically theirs. This commonly affects directors, finance staff, trustees, family members and business owners with signing power over foreign accounts.
Joint ownership may create a filing obligation for more than one person. Limited spousal filing relief can apply in qualifying situations, but the requirements should be checked rather than assumed.
What to do after discovering a missed filing
Do not rush to file a late or amended form without understanding the full history. The correct response depends on whether income was omitted, how many years are affected, whether other international forms are missing and why the failure occurred.
- Build a complete year-by-year account and income inventory.
- Gather the filed U.S. returns and international forms.
- Identify whether tax was underpaid.
- Ask an experienced international tax professional which correction procedure fits the facts.
- Keep written records supporting the information and advice used.
International information-return penalties can be significant. A thoughtful review is safer than filing one isolated form and later discovering that the income return, PFIC form or foreign company reporting was also incomplete.
How the reporting pieces connect
- A brokerage account may appear on FBAR and Form 8938.
- Foreign mutual funds inside that account may require separate PFIC analysis and Form 8621.
- A foreign company account may connect to Form 5471 and controlled foreign corporation reporting.
- A trust-owned account may require foreign trust reporting in addition to account disclosure.
Your practical year-end checklist
- Ask every family member about accounts opened, closed or inherited.
- Review business and trustee signing authority.
- Download maximum-balance information and income statements.
- Identify foreign funds and entity interests held through each account.
- Send the complete package to the tax preparer before the return is prepared.
- Confirm who is filing the FBAR and keep the submission confirmation.
The practical takeaway
The safest system is one annual foreign-asset inventory that supports the tax return, Form 8938, FBAR and any specialist forms. That gives your adviser the full picture and reduces the risk of an account or entity falling between separate questionnaires.
Use America Financial Readiness to organize cross-border questions before specialist advice, and visit the Finance and Tax resource hub for connected guidance.
