Do I need to file U.S. taxes if I live abroad?

Yes. The United States taxes its citizens on their worldwide income, regardless of where they live. Even if you earn all your income overseas, you are still required to file a U.S. tax return if your income exceeds the standard filing threshold.

What is the Foreign Earned Income Exclusion (FEIE)?

The Foreign Earned Income Exclusion allows qualifying U.S. citizens and residents living abroad to exclude up to $130,000 (tax year 2025, filed in 2026) of their foreign earnings from U.S. taxation. To qualify, you must meet either the Bona Fide Residence test or the Physical Presence test.

What is the FBAR and who needs to file it?

FBAR (FinCEN Form 114) is a report of Foreign Bank and Financial Accounts. You must file an FBAR if you have a financial interest in or signature authority over foreign accounts that exceeded $10,000 at any time during the calendar year.

Can I avoid double taxation on my foreign income?

In most cases, yes. The U.S. has tax treaties with many countries, and you can claim a Foreign Tax Credit for taxes paid to foreign governments. Between the FEIE, foreign tax credits, and treaty benefits, most Americans abroad can significantly reduce or eliminate their U.S. tax liability.

What happens if I haven't filed U.S. taxes in several years?

There are IRS programs designed to help Americans abroad get back into compliance without facing severe penalties. The Streamlined Filing Compliance Procedures is one popular option for those who can certify their failure to file was non-willful.

FATCA for Americans Abroad: Filing Requirements, Thresholds & Penalties (2026)

FATCA — the Foreign Account Tax Compliance Act — is one of the most misunderstood filing requirements for Americans abroad. Most expats have heard the term, but many aren't sure whether it applies to them or how it's different from the FBAR.

Here's what you need to know.

What is FATCA?

FATCA was enacted in 2010 to combat offshore tax evasion. It has two sides:

For foreign financial institutions: Banks worldwide must report accounts held by U.S. persons to the IRS. This is why foreign banks ask if you're an American citizen when you open an account.
For individual taxpayers: If your foreign financial assets exceed certain thresholds, you must report them on Form 8938 (Statement of Specified Foreign Financial Assets), filed with your annual tax return.

We're focusing on the individual reporting requirement here — that's the part that affects you as an expat.

Do You Need to File Form 8938?

It depends on where you live and your filing status. The thresholds are higher for expats than for U.S.-based taxpayers:

Thresholds for Americans Living Abroad

Filing Status	Year-End Value	Any Time During Year
Single (or married filing separately)	$200,000	$300,000
Married filing jointly	$400,000	$600,000

Thresholds for Americans Living in the U.S.

Filing Status	Year-End Value	Any Time During Year
Single (or married filing separately)	$50,000	$75,000
Married filing jointly	$100,000	$150,000

You must file Form 8938 if the total value of your specified foreign financial assets exceeds either threshold — year-end or at any point during the year.

Note: You qualify for the higher "abroad" thresholds if you meet the bona fide residence test or the physical presence test (330 days abroad) — the same tests used for the FEIE.

What Assets Must Be Reported?

Form 8938 covers specified foreign financial assets, which include:

Foreign bank accounts (checking, savings, fixed deposits)
Foreign brokerage and securities accounts
Foreign mutual funds
Stock or securities issued by a non-U.S. person (even if held in a U.S. account)
Foreign-issued life insurance or annuity contracts with cash value
Interest in a foreign entity (partnership, LLC, trust)
Foreign hedge funds and private equity funds
Foreign pension plans (in most cases)

What's NOT Reported on Form 8938?

Real estate held directly (a foreign property you own personally is not reported — but if it's held through a foreign entity, the entity interest is reported)
Accounts at U.S. financial institutions (even if you're overseas, a U.S. bank account is not a foreign asset)
Social Security-type programs of foreign governments

How to Determine Asset Values

For each asset, you need to determine the maximum value during the year and the year-end value. Use a reasonable method to value assets — typically the balance shown on account statements.

Convert foreign currency values to USD using the Treasury Department's year-end exchange rate for year-end values. For maximum values, use the exchange rate on the date of the maximum value or the year-end rate — whichever is more practical.

How to File Form 8938

Form 8938 is filed with your annual income tax return (Form 1040). It is not filed separately.

Key details:

Due date: Same as your tax return (April 15, with extensions)
E-filing: Form 8938 can be e-filed as part of your return
Extension: If you extend your tax return, Form 8938 is automatically extended too
No standalone filing: You cannot file Form 8938 by itself — it must accompany a tax return

Important: If you're not otherwise required to file a tax return, you don't need to file Form 8938 — even if your assets exceed the thresholds.

FATCA Penalties

Non-compliance with FATCA carries significant penalties:

Violation	Penalty
Failure to file Form 8938	$10,000 per year
Continued failure after IRS notice	Up to $50,000 additional (at $10,000 per 30-day period)
Underpayment related to undisclosed assets	40% penalty on the underpayment
Fraudulent failure to file	Criminal penalties possible

The IRS can also extend the statute of limitations on your entire tax return to six years (instead of the standard three) if you fail to file Form 8938.

FATCA vs. FBAR: Key Differences

These two get confused constantly, and for good reason — they both involve reporting foreign accounts. But they're separate requirements:

	FATCA (Form 8938)	FBAR (FinCEN 114)
Filed with	IRS (with tax return)	FinCEN (separately)
Threshold (abroad)	$200,000 year-end / $300,000 any time	$10,000 any time
Assets covered	Specified foreign financial assets	Foreign financial accounts
Due date	With tax return	April 15 (auto-extended to Oct 15)
Real estate	Not directly	Not reported
Foreign stocks (in U.S. account)	May be reportable	Not reported

The critical point: These requirements overlap but are not identical. Many expats need to file both. Some assets go on one form but not the other. Don't assume filing one covers you for the other.

For a deeper dive, read our full FBAR vs. FATCA comparison.

What If You Haven't Filed Form 8938?

If you've missed filing Form 8938 in past years, the Streamlined Filing Compliance Procedures can help — the same program that covers missed FBARs and tax returns. You'll need to:

File 3 years of amended or delinquent tax returns (with Form 8938 attached)
File 6 years of FBARs
Certify your non-compliance was non-willful

Under the Streamlined Procedures, the $10,000 penalties are generally waived.

Frequently Asked Questions

Do I need to file both FATCA and FBAR?

Likely yes. The FBAR threshold ($10,000) is much lower than the FATCA threshold ($200,000 for expats). If you exceed the FATCA threshold, you almost certainly exceed the FBAR threshold too.

Does my foreign pension count for FATCA?

In most cases, yes. Foreign pension accounts are generally considered specified foreign financial assets. However, government-run social security programs are typically excluded.

What about cryptocurrency on foreign exchanges?

This is evolving, but the IRS has indicated that crypto held on foreign exchanges may be reportable on Form 8938. If you hold significant crypto on a non-U.S. exchange, report it to be safe.

My foreign bank already reports to the IRS under FATCA. Do I still need to file Form 8938?

Yes. The bank's reporting to the IRS does not satisfy your individual filing obligation. You must file Form 8938 separately.

The Bottom Line

FATCA reporting on Form 8938 is one more box to check for Americans abroad — but only if your foreign assets exceed the thresholds. For most expats with significant savings or investments overseas, it applies.

The filing itself is straightforward. The bigger risk is not knowing about it and facing penalties down the road. Not sure if your foreign assets hit the FATCA thresholds? Let's take a look together.