Who needs to file Form 8938 and when?

Published on July 07, 2025

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What is Form 8938 and why does the IRS care about it so much?

Form 8938, also known as the “Statement of Specified Foreign Financial Assets,” is basically the IRS asking if you have foreign accounts or assets over a certain value when added together.

It was introduced under FATCA, the Foreign Account Tax Compliance Act. The core of it is that it gives the IRS a tool to keep track of what Americans hold abroad. This isn’t just for millionaires. Plenty of regular US expats living overseas end up having to file Form 8938, especially if they’ve got things like:

A foreign bank or investment account
Stocks or bonds held through a foreign broker
A pension or retirement plan from another country
Even some foreign insurance policies with cash value

The main goal? To prevent tax evasion. But in practice, it means even totally law-abiding expats often get caught up in the paperwork.

One key thing to understand is that Form 8938 isn’t the same as the FBAR (that’s FinCEN Form 114). They sound similar and sometimes cover the same accounts, but they’re filed separately and go to different places. Form 8938 is part of your federal tax return and gets sent to the IRS. FBAR goes to the Treasury Department through a separate portal.

Who is considered a specified individual?

If you’re a US citizen, a Green Card holder, or someone who’s considered a resident for tax purposes, you’re what the IRS calls a “specified individual.”

This means you’re probably on the hook for filing Form 8938 if your foreign assets cross a certain threshold when added together.

This also includes non-resident aliens who elect to be treated as US residents for tax purposes, usually because they’re married to a US citizen and they file jointly. So even if you’re technically living outside the US, the IRS may still expect you to report your overseas assets.

And it’s not just about individuals. Certain US-based entities, like closely held corporations, partnerships, and trusts, also count if they’re basically being used to hold foreign investments. If you own or control one of those and it holds non-US assets, you might need to file them too.

The general rule? If you’re tied to the US tax system and you’ve got foreign financial stuff, don’t ignore Form 8938.

Specified foreign financial assets: what must be reported

The IRS wants you to report foreign financial assets that could generate income or increase in value. So if you’ve got something like a foreign bank account, investment account, or pension, it’s probably reportable.

Here’s what typically falls under the “report it” category:

Foreign checking or savings accounts
Brokerage or investment accounts held outside the US
Stocks and bonds issued by non-US companies (especially if not held in a US account)
Foreign mutual funds or ETFs
Retirement accounts from another country (like a UK pension)
Life insurance policies with a cash value
Ownership in a foreign trust, business, or partnership

There are some things you don’t need to include. For example:

Foreign real estate is fine if you own it personally (not through a foreign company or trust)
Personal stuff like art, cars, or jewelry doesn’t need to be reported
If you already disclosed certain accounts or assets on other forms like 3520 or 5471, you won’t need to duplicate the details, but you still have to note them on 8938

Filing thresholds based on residency and filing status

For US citizens living in the US, here’s what to watch:

Single filers: You need to file if your foreign assets were over US$50,000 at the end of the year or more than US$75,000 at any point during the year.
Married filing jointly: Your limit jumps to US$100,000 at year-end or US$150,000 anytime during the year.

Now, for US expats, which includes people who live outside the US full-time and qualify under IRS residency rules, the thresholds are higher:

Single expats: File if your assets are over US$200,000 at year-end or US$300,000 at any point.
Married expats filing jointly: The limit is US$400,000 at the end of the year or US$600,000 at any time.

Still unsure if you need to file Form 8938?
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Form 8938 vs. FBAR: similarities and differences

These two forms sound like they’re doing the same thing, and to some extent, they are, but they’ve got different rules, agencies, and purposes.

FBAR (FinCEN Form 114): This one’s just about foreign financial accounts like bank or brokerage accounts. If all your foreign accounts together total US$10,000 or more, you need to file. It’s submitted to FinCEN, which is part of the Treasury Department.
Form 8938: This form asks about a wider range of foreign assets, not just accounts. Things like foreign stock held outside a financial account, pension plans, foreign partnerships, or certain life insurance policies also count. This one goes to the IRS with your regular tax return.

Also, Form 8938 has much higher thresholds than the FBAR, especially if you live overseas.

Can you be required to file both? Yes. And unfortunately, a lot of expats do.

Penalties for non-filing and how to get compliant

If you miss Form 8938, the starting penalty is US$10,000. If they send you a letter and you still don’t respond, you could get hit with another US$10,000 for each 30-day period, up to US$50,000 total.

And if the IRS thinks you did it on purpose? It can go way higher. Think interest, bigger fines, and possibly even criminal charges in extreme cases.

But there’s good news: if you made an honest mistake or just didn’t know, you might be able to fix things without penalties.

One option is the Streamlined Filing Compliance Procedures, which are designed for people who didn’t willfully ignore the rules.
You can also just file amended returns if you realize you left something out and want to get it right.

The sooner you fix it, the better. If you’re unsure where to start, talking to a tax advisor who handles expat cases can save you a lot of trouble (and money).