The FBAR and Form 8938 both report foreign financial assets, but they are different filings, sent to different agencies, with different thresholds. The FBAR is filed with FinCEN once your foreign accounts together pass 10,000 dollars at any time in the year. Form 8938 is filed with your tax return, at much higher thresholds. Many people need to file both, and filing one never covers the other.
The confusion, and why it is costly
The most common confusion is the belief that filing one covers the other. It does not. They come from different laws, go to different places, and ask about overlapping but different lists of assets.
The FBAR is also not part of your tax return at all. The return itself asks about foreign accounts only through a yes or no question on Schedule B, which is easy to answer without noticing that a separate filing follows from it. That is how it gets missed.
The FBAR
The FBAR, FinCEN Form 114 in full, is filed electronically with the Financial Crimes Enforcement Network, through its own e-filing system, not with the IRS return.
You must file one if you had a financial interest in, or signature authority over, foreign financial accounts whose combined value exceeded 10,000 dollars at any time during the calendar year. That is the total across all accounts, using each account’s highest balance in the year, not the balance on December 31. Three accounts that each reached 4,000 dollars add up to 12,000, and a filing is due.
It is due April 15, with an automatic extension to October 15. Records for each account must be kept for five years.
Form 8938
Form 8938 is filed with your income tax return. Its thresholds are higher and depend on filing status and where you live.
For someone living in the US, the thresholds are:
- Unmarried: more than 50,000 dollars on the last day of the year, or more than 75,000 dollars at any time during it.
- Married filing jointly: more than 100,000 dollars on the last day, or more than 150,000 dollars at any time.
The thresholds are higher for taxpayers living abroad.
What each one covers
The two lists overlap but are not the same.
Both cover foreign bank and custodial accounts, and foreign mutual funds.
Only the FBAR covers accounts where you have signature authority but no ownership, and accounts at foreign branches of US institutions.
Only Form 8938 covers foreign stock held directly rather than in an account, interests in foreign partnerships, and foreign issued life insurance with a cash value.
Accounts people leave off
The accounts most often missed are not the main ones.
- Accounts you can sign on but do not own, such as a parent’s account where you were added to help. Signature authority alone brings it into the FBAR.
- Dormant accounts with small balances, which still count toward the combined total.
- A foreign pension or provident fund, which may be reportable depending on its structure.
- Joint accounts with family at home, which go on the FBAR at the full account value, not your share.
If you have missed years
The FBAR penalties are serious, and they are higher for a failure that is willful than one that is not. The worst position is to have missed years and then say nothing.
What to do instead is to fix it before the IRS asks, through the routes the IRS publishes for late filings, rather than quietly filing the current year and hoping the earlier years go unnoticed. Which route fits depends on the facts, and it is a conversation to have with a professional before anything is filed. No outcome can be promised in advance.
Who this usually catches
The person this catches most often is a new US resident with ordinary accounts at home: a salary account, a fixed deposit, a family account. Nothing about them feels foreign or significant. How residency changes what is reported is covered in foreign income after you become a US resident.
Preparing both filings alongside the return, from one list of accounts, is part of the international service.