Form 8938 – A Practical Guide to FATCA Reporting

When dealing with Form 8938, the IRS statement that requires U.S. taxpayers to disclose certain foreign financial assets. Also known as Statement of Specified Foreign Financial Assets, it acts as a bridge between individual tax returns and the broader FATCA regime. This form isn’t just another line on your tax return; it’s a direct link that the IRS, the U.S. Internal Revenue Service uses to ensure compliance with FATCA, the Foreign Account Tax Compliance Act. In plain terms, FATCA sets the rules, and Form 8938 makes sure you follow them.

Who Needs to File and What Counts as a Reportable Asset

If you’re a U.S. citizen, resident alien, or a certain type of non‑resident who files a Form 1040, the standard individual income tax return, you may have to attach Form 8938 when your total foreign assets cross the filing threshold. The thresholds vary: single filers see a $50,000 limit at year‑end, while married filing jointly face $100,000. These amounts drop even lower if you live abroad.

Reportable assets cover a wide range: foreign bank accounts, stocks, partnership interests, and even certain foreign‑issued life insurance contracts. It also includes interests in foreign trusts, but not the trust itself—only the benefits you receive. The key is that the asset must be “specified,” meaning it’s held directly or indirectly through another entity. Knowing the difference helps you avoid double‑reporting on both Form 8938 and the FBAR, FinCEN Form 114 for foreign bank accounts.

Understanding the relationship between these forms is crucial. Form 8938 encompasses assets that the FBAR does not, and vice versa. The IRS expects both filings when applicable, and failure to do so can trigger penalties that rise to 40% of the unpaid tax plus interest. That’s why many taxpayers treat the preparation of Form 8938 as an essential part of their annual tax planning.

Preparing the form is straightforward once you have the data. First, gather statements from each foreign account, then convert the values to U.S. dollars using the IRS‑approved exchange rate for the year. Next, categorize each asset according to the form’s sections—financial accounts, foreign securities, and other assets. Finally, double‑check that you’ve met the threshold and that no asset is omitted. If you’re unsure, a tax professional familiar with FATCA can help you navigate the nuances, especially when dealing with complex ownership structures.

Below you’ll find a curated set of articles that dive deeper into each aspect of Form 8938: from detailed threshold tables and step‑by‑step filing guides to comparisons with the FBAR and real‑world case studies. Whether you’re filing for the first time or reviewing past returns, these resources will give you the clarity and confidence you need to stay compliant.