Many U.S. taxpayers living abroad already keep track of their accounts and investments, but the moment foreign assets enter the picture, a small question usually comes up about what the Internal Revenue Service (IRS) expects on the tax return. Foreign Account Tax Compliance Act, FATCA Form 8938, is one of those areas where people pause for a moment and think, Alright, what exactly applies to me here?. And honestly, that pause makes sense because the rules do not always match how people manage their finances day to day.

So this blog post walks you through the filing requirements in a clear and steady way, especially if you live abroad or hold a green card and want to know when Form 8938 becomes part of your annual return.

What Is FATCA Form 8938?

FATCA Form 8938 is the form you attach to your annual tax return when you have foreign financial assets that cross the reporting limits set by the IRS. Think of it as the IRS’s way of asking you to list the accounts or investments you hold outside the United States for that tax year. So when you meet the filing criteria, you simply share those details through Form 8938 along with your Form 1040.

Purpose of Form 8938

The purpose of FATCA Form 8938 is pretty straightforward. It helps the IRS see what foreign assets U.S. taxpayers hold and make sure everything connected to those assets is reported correctly. In a way, it just brings more clarity and transparency to offshore holdings, so your foreign accounts and investments are properly accounted for under FATCA.

Who Must File FATCA Form 8938?

Form 8938 is not something every taxpayer files. It comes in only when two things line up at the same time.

First, you have to fall into a group the IRS calls a “specified person,” which includes U.S. citizens, green card holders, certain resident aliens, and some domestic entities. 

Second, the total value of your foreign financial assets has to be more than the reporting threshold that applies to your situation. That threshold changes based on where you live and how you file your return.

So the idea is simple. If you are a U.S. person with foreign assets and those assets are high enough under the IRS rules, Form 8938 becomes part of your tax return for that year.

Filing Requirements for U.S. Expats

If you live outside the United States and meet the presence abroad or bona fide residence tests, the IRS gives you higher FATCA reporting thresholds in 2025 because it expects you to have more activity outside the country.

You generally need to file Form 8938 if your specified foreign financial assets are worth more than:

• 200,000 dollars on the last day of the tax year, or
• 300,000 dollars at any time during the year if you file as single or married filing separately.

If you are married, filing jointly, and you both live abroad, the thresholds are:

• 400,000 dollars on the last day of the tax year, or
• 600,000 dollars at any time during the year.

So if you are an expat and your foreign accounts and investments move above these amounts, Form 8938 usually becomes part of your filing checklist.

Filing Requirements for Green Card Holders

Green card holders are treated much like U.S. citizens for FATCA Form 8938. If you hold a green card, the IRS usually treats you as a U.S. resident for FATCA reporting, whether you physically live in the United States or abroad.

In practice, that means you look at:

• Where you normally live and work during the year.
• Whether you qualify as living abroad under the IRS tests.
• Your filing status.

Once you know those pieces, you follow the same thresholds that apply to U.S. citizens in that category. If your foreign assets sit above those limits, you are in Form 8938 territory.

Filing Requirements for U.S. Residents and Entities

If you live in the United States, the thresholds are lower because the IRS expects most of your financial life to be inside the country. You generally have to file Form 8938 if your specified foreign financial assets are worth more than:

• 50,000 dollars on the last day of the tax year, or
• 75,000 dollars at any time during the year if you file as single or married filing separately.

For married couples who live in the United States and file a joint return, the numbers are:

• 100,000 dollars on the last day of the tax year, or
• 150,000 dollars at any time during the year.

On top of individuals, certain closely held domestic corporations, partnerships, and trusts that mainly hold passive foreign assets can also be treated as “specified domestic entities.” When they meet that definition and their foreign assets are worth more than 50,000 dollars at year-end or 75,000 dollars at any point during the year, they may have to file Form 8938 as well.

Filing Requirements for Married Filing Jointly vs Separately

Your filing status changes how quickly you cross the threshold, so it is not just a small detail.

If you are married and file jointly, the thresholds are doubled compared to a single filer in the same location. That applies both to couples living in the United States and to couples who qualify as living abroad.

If you are married and file separately, you generally follow the single filer thresholds, even if you and your spouse share some of the foreign assets. So two couples with the same assets can end up with different Form 8938 requirements just because one files jointly and the other files separately.

FATCA Declaration Form and Specified Foreign Assets

Form 8938 works as the declaration of the foreign financial assets you hold during the tax year. You use it to report the accounts or investments you keep outside the United States when they fall under FATCA rules. So once you meet the filing threshold, you share the details of these assets along with your annual tax return and list them clearly on Form 8938.

What Must Be Reported?

The IRS expects you to include any foreign financial asset that fits within the FATCA definition for that year. These assets can sit in different countries and different types of financial institutions, so it helps to know what usually counts. You generally report assets such as:

• Foreign bank accounts.
• Foreign brokerage or investment accounts.
• Stocks or securities issued by a foreign corporation.
• Foreign mutual funds and foreign exchange-traded funds.
• Interests in foreign partnerships.
• Certain foreign pension or retirement accounts.
• Life insurance or annuity contracts that have cash value.
• Interests in foreign trusts or estates.
• Foreign financial instruments that are held outside the United States.

Form 8938 also asks for basic details about each asset so the IRS can connect it to your tax return. You list the type of asset, the name of the institution, the account number or identifying information, the country where it is held, and the highest value during the year.

If the asset is not held in an account, you simply describe it and show its value for the year. You also confirm whether any income from these assets is already included on your tax return, which helps keep everything consistent.

If the IRS later finds that income connected to these assets was not reported, they may assess tax that needs to be paid. If that balance stays unpaid, the situation can move into the regular IRS collection process, and that is where federal tax liens or levies may come in. These enforcement actions are federal, so they apply even to taxpayers living abroad.

How to File FATCA Form 8938?

If you meet the filing requirements for Form 8938, here is how you complete and submit it in a compliant way.

Gather Information On All Foreign Assets

First, collect statements, account information, or records for all of your specified foreign financial assets. That means foreign bank accounts, brokerage or investment accounts, foreign securities held offshore, foreign pensions or annuities (if applicable), and any other foreign financial instruments. Use these records to determine the value of each asset.

Calculate Values In U.S. Dollars 

For each asset, you must convert its value into U.S. dollars using the applicable exchange rate. For example, use the U.S. Treasury exchange rate for the date you determine its value or the highest value during the year if required.

Fill Out Form 8938 Accurately

On Form 8938, list every foreign financial asset that qualifies. Provide all required details: type of asset, the name of the foreign financial institution or issuer, account/identification number if any, country where it is held, and the maximum value during the year. If you hold multiple assets, attach additional sheets as allowed per the form instructions. 

Attach Form 8938 To Your Annual U.S. Tax Return

You must file Form 8938 along with your regular U.S. income tax return (for example, your Form 1040). Do not send Form 8938 by itself; it needs to accompany the return or an amended return.

Keep Documentation And Records

Retain copies of all foreign account statements, asset valuations, exchange rate conversions, and the Form 8938 you filed. That helps you respond to any IRS inquiries or audits related to FATCA foreign asset reporting.

Filing Deadlines and Extensions

Form 8938 follows the same filing timeline as your annual U.S. tax return, so you send it in at the same time you file your Form 1040. Once you know your tax return due date, you automatically know the deadline for Form 8938 as well.

Here is how the timing works:

• Form 8938 is due on the regular U.S. expatriate tax filing deadline for the year, which is usually April 15.
• If you get an extension to file your tax return, the extension also applies to Form 8938.
• Taxpayers who qualify as living abroad receive the standard automatic two-month extension, and Form 8938 follows that same extended date.

Also Read → FATCA vs CRS – FATCA and CRS Declarations and Reporting Explained 

FATCA Penalties and Risks of Non-Compliance

When FATCA Form 8938 is required but not filed, the IRS can apply clear penalties. The full amounts are listed below, so everything stays simple and easily follows foreign asset tax compliance requirements.

Penalty structure:

• 10,000 dollars initial penalty for not filing.
• Additional monthly penalties after an IRS notice, up to a total of 50,000 dollars.

The IRS can also add accuracy-related penalties if income tied to your foreign assets is missing or incorrect on your return. These penalties apply when the information you report does not match the activity connected to those assets.

There is also a practical concern. When Form 8938 is missing, the IRS may treat your return as incomplete, which can slow down processing or lead to follow-up questions about your FATCA foreign asset reporting.

Get Professional FATCA Reporting Help from Anthony N. Verni Today!

FATCA reporting can feel routine once you understand the thresholds, but the details behind FATCA Form 8938 often bring up small questions that aren’t always clear from the IRS Form 8938 instructions. And honestly, even simple gaps, like how to value something or whether an asset needs to be listed, can cause issues later. So having someone like Anthony N. Verni, who works with these rules every day and who looks at your situation, can really help when something doesn’t feel straightforward.

As an attorney with CPA and MBA credentials, he brings more than 25 years of focused U.S. tax experience, including complex international matters. For clear, individual support with your reporting, contact Verni Tax Law today.

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