Form 8938: the FATCA form, explained

1Who has to file Form 8938?

Form 8938 comes from FATCA, the Foreign Account Tax Compliance Act. You file it if all of these are true:

• You're a "specified individual": a U.S. citizen, a resident alien such as a green card holder, or certain nonresidents who choose to be treated as residents.
• You have to file a U.S. tax return for the year. If you don't, you don't file Form 8938 either.
• Your specified foreign financial assets are over your threshold, on the last day of the year or at any point during it.

You have an interest in an asset if any income, gain or loss from it would be reported on your return, even if there wasn't any that year. Some U.S. companies, partnerships and trusts have to file too, but most people who need it are individuals. The IRS's Form 8938 page has the form and instructions.

2What are the Form 8938 thresholds?

You file if you're over either amount. Adding up each asset's highest value during the year is a cautious shortcut for the "any time" test: if that total is under the threshold, you're under it. "Living abroad" means you meet the bona fide residence test or the physical presence test, the same tests used for Form 2555. The thresholds aren't adjusted for inflation, so they're the same every year. The Form 8938 checker applies them to your situation.

3What counts as a specified foreign financial asset?

Foreign mutual funds count whether you hold them in an account or directly, and they usually come with their own form as PFICs. Accounts you can only sign on, such as an employer's, aren't reported on Form 8938, though they can belong on the FBAR.

Crypto on a foreign exchange is a grey area. The IRS hasn't said clearly whether it belongs on Form 8938, and it could be treated as a foreign financial asset. See crypto taxes for Americans abroad.

4Which exchange rate do you use for Form 8938?

Values go on Form 8938 in U.S. dollars. The instructions say to convert at the U.S. Treasury's exchange rate for the last day of the tax year, even if you sold the asset earlier in the year. If the Treasury has no rate for a currency, you use another verifiable rate and say which one.

• Use the same December 31 rate for both the year-end value and the highest value during the year.
• The FBAR uses the same Treasury year-end rate, so the two forms stay consistent.
• The Treasury publishes the rates on its reporting rates of exchange page, each January for the year before.

For example, a UK savings account that peaked at £180,000 during 2025 is converted at the Treasury's December 31, 2025 rate of 0.743 pounds per dollar: £180,000 ÷ 0.743 = $242,261.

5A worked example

Alex is single, has lived in London since 2019 and meets the physical presence test. In 2025 Alex had a savings account, an investment account and a workplace pension, all in pounds, converted at 0.743 pounds per dollar:

The highest values add up to just under $300,000, but the year-end total, $242,261, is over $200,000. Alex is over one of the two thresholds, so Alex files Form 8938 for 2025. Alex also files an FBAR, because the accounts were over $10,000.

6Form 8938 vs. FBAR: what's the difference?

Filing one doesn't replace the other. Many people abroad file only the FBAR, because their assets are under the Form 8938 thresholds; people with larger savings often file both. The IRS publishes its own comparison of Form 8938 and FBAR requirements. The FBAR, explained.

7What's the penalty for not filing Form 8938?

• $10,000 for each year you should have filed and didn't.
• Up to $50,000 more if it's still missing 90 days after the IRS writes to you: $10,000 for every 30 days, for a total of up to $60,000.
• A 40% accuracy penalty on any tax underpaid because of undisclosed foreign assets, instead of the usual 20%.
• An open return. Until the form is filed, the IRS's time limit to examine that whole return generally doesn't start.

The penalties apply year by year: missing the form for three years means three separate $10,000 penalties are possible. Reasonable cause can stop them, and under the Streamlined procedures they don't apply if you qualify.

8Missed Form 8938? How to fix it

• Your income was all reported, and only the form is missing: file amended returns with Form 8938 attached and a reasonable cause statement, under the delinquent international information return procedures.
• Income from the assets is missing too, and you live abroad: the Streamlined Foreign Offshore Procedures, where the penalties are waived if you qualify.
• You live in the U.S.: the Streamlined Domestic Offshore Procedures, with a 5% penalty instead.

Under Streamlined, a missing Form 8938 for any of the three tax years simply goes in with that year's return, using the same balances as the FBARs, and the penalty for having missed it doesn't apply if you qualify. Each information return gets "Streamlined Foreign Offshore" or "Streamlined Domestic Offshore" written at the top, like the return itself.

Not sure which applies? See every IRS catch-up option, compared.

9How do you fill in Form 8938?

The form has six parts. The first four are summaries; the last two hold the detail for each asset.

Assets listed in Part IV still count toward your threshold; they just aren't described twice.

10How do you find an asset's maximum value?

For an account, it's the highest balance during the year, and you can generally rely on your periodic statements unless you know they don't give a fair picture. For other assets, it's a reasonable estimate of the highest fair market value. Either way, the value is converted at the Treasury's year-end rate. For a foreign pension, the value is usually the one on your annual pension statement.

Keep the statements you used. They're the same records you'd need for the FBAR, and the first thing anyone asks for if a value is ever questioned.

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