FATCA & Form 8938: Complete Guide for Americans Abroad (2026)

What Is FATCA?

FATCA stands for the Foreign Account Tax Compliance Act, enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act. Its purpose is to combat tax evasion by US persons holding assets outside the United States. While FBAR has existed since 1970, FATCA significantly expanded the US government's ability to track foreign financial assets by requiring foreign financial institutions to report information about accounts held by US taxpayers directly to the IRS.

For Americans living abroad, FATCA creates a second layer of reporting on top of the FBAR. The two systems overlap significantly but are not identical. Understanding both is essential because failing to file either one carries its own separate penalties.

FATCA reporting is done through Form 8938, Statement of Specified Foreign Financial Assets, which is filed annually with your federal income tax return (Form 1040). Unlike the FBAR, which goes to FinCEN, Form 8938 is submitted to the IRS as part of your tax filing package.

Who Must File Form 8938

Form 8938 filing requirements depend on three factors: your filing status, whether you live in the United States or abroad, and the value of your specified foreign financial assets.

Filing Thresholds for Americans Abroad

If you meet the IRS definition of living abroad and file a federal tax return, you must file Form 8938 if the value of your specified foreign financial assets exceeds:

Important: You only need to meet one of the two thresholds. If your assets exceeded $300,000 at any point during the year (even if they dropped to $150,000 by year-end), you must file. Similarly, if your year-end balance was $250,000 (even if it never exceeded $300,000 during the year), you must file.

What Counts as "Living Abroad"

The IRS considers you to be living abroad if:

• You are a US citizen with a tax home in a foreign country and you meet either the bona fide residence test or the physical presence test, or
• You are a bona fide resident of a US territory (Puerto Rico, Guam, etc.)

If you do not qualify as living abroad, the thresholds are lower: $50,000/$75,000 for single filers and $100,000/$150,000 for married filing jointly.

Do You Need to File a Tax Return?

Form 8938 is only required if you are already required to file a US tax return. If your income falls below the filing threshold and you do not need to file Form 1040, you generally do not need to file Form 8938 either. However, if you are close to the threshold, consult current IRS guidance.

What Is a "Specified Foreign Financial Asset"?

This is the most critical concept for FATCA compliance. The term is broader than "foreign financial accounts" and includes assets that the FBAR does not require you to report.

Assets That Must Be Reported on Form 8938

• Foreign financial accounts: Bank accounts, brokerage accounts, securities accounts, and similar accounts maintained by a foreign financial institution. These overlap with FBAR.
• Foreign stock and securities: Stock or securities issued by a non-US person, even if not held in a financial account. For example, if you directly hold shares of a foreign corporation (not in a brokerage account), those shares are reportable on Form 8938 but may not be reportable on the FBAR.
• Interests in foreign entities: Financial interests in foreign partnerships, foreign corporations, foreign trusts, and foreign estates.
• Foreign financial instruments: Any financial instrument or contract held for investment with an issuer or counterparty that is not a US person.
• Foreign-issued life insurance: Policies with a cash surrender value issued by a foreign insurance company.
• Foreign pension and retirement plans: Pension plans, retirement accounts, and deferred compensation plans maintained by a foreign employer or foreign institution.
• Foreign mutual funds: Shares in foreign pooled investment vehicles, even if not held in a brokerage account.

Assets That Generally Do NOT Need to Be Reported

• Foreign real estate held directly: If you own a home, apartment, or land in a foreign country in your own name (not through a foreign entity or trust), it is generally not a specified foreign financial asset. However, if the property is held through a foreign corporation, partnership, trust, or estate, the interest in that entity is reportable.
• Currency and precious metals held directly: Cash and physical gold held personally are not specified foreign financial assets, though income from their sale may be taxable.
• Social Security and government benefits: Benefits from foreign social security systems are generally not reportable as assets.
• Accounts at US military banking facilities: Same exclusion as FBAR.

The Key Difference from FBAR

The FBAR requires reporting of foreign financial accounts. FATCA requires reporting of foreign financial assets. The latter is broader:

• FBAR: You have a foreign brokerage account → report the account.
• FATCA: You have a foreign brokerage account → report the account AND any foreign stock held outside the account.

If you hold stock certificates of a German company in a safe deposit box (not in a bank account), the FBAR likely does not require reporting, but Form 8938 does.

How to File Form 8938

Form 8938 is filed with your annual federal income tax return. It is not a standalone filing like the FBAR.

Step 1: Determine If You Meet the Threshold

Calculate the maximum value of all your specified foreign financial assets during the year and your year-end balance. Use the Treasury Department's end-of-year exchange rates to convert foreign currency to US dollars. If either number exceeds your applicable threshold, you must file.

Step 2: Gather Asset Information

For each reportable asset, you will need:

• Description of the asset (account number, stock name, entity name)
• Maximum value during the year
• Year-end value
• Currency of denomination
• Name of the foreign institution or issuer
• Income generated by the asset (interest, dividends, capital gains)
• Whether the asset is also reported on the FBAR or other forms (Form 3520, 8621, 5471, etc.)

Step 3: Complete Form 8938

Form 8938 has several parts:

Part I — Summary of Foreign Deposit and Custodial Accounts: Lists foreign financial accounts (overlaps with FBAR).

Part II — Summary of Other Foreign Assets: Lists specified foreign financial assets that are not deposit or custodial accounts (foreign stock, partnership interests, etc.).

Part III — Summary of Tax Items Attributable to Specified Foreign Financial Assets: Reports income, deductions, gains, losses, and credits related to the assets.

Part IV — Excepted Specified Foreign Financial Assets: Identifies assets reported on other forms (like the FBAR, Form 3520, 8621, or 5471) to avoid double-reporting penalties.

Part V — Detailed Information on Foreign Deposit and Custodial Accounts: Detailed line-item reporting for each account.

Part VI — Detailed Information on Other Foreign Assets: Detailed line-item reporting for each non-account asset.

Step 4: File With Your Tax Return

Attach Form 8938 to your Form 1040 and file by the due date of your tax return (including extensions). If you file for an extension to October 15, your Form 8938 deadline extends with it.

FATCA vs. FBAR: Side-by-Side Comparison

Critical point: Filing one does not satisfy the other. You may need to file both. If you have foreign accounts exceeding $10,000 AND foreign assets exceeding $200,000, you file the FBAR with FinCEN and Form 8938 with the IRS.

Penalties for FATCA Non-Compliance

FATCA penalties are serious and separate from FBAR penalties. You can be penalized under both systems simultaneously for the same assets.

Failure-to-File Penalty

If you are required to file Form 8938 and do not, the penalty is $10,000 per return.

Continued Failure Penalty

If the IRS notifies you of the failure to file and you do not file within 90 days, an additional penalty of $10,000 applies for each 30-day period (or fraction thereof) during which the failure continues, up to a maximum additional penalty of $50,000.

Tax Underpayment Penalty

A 40% penalty applies to any underpayment of tax that is attributable to non-disclosed foreign financial assets. This is one of the most severe accuracy-related penalties in the tax code.

Fraud and Criminal Penalties

In cases of fraud, criminal penalties may apply, including fines and imprisonment.

Reasonable Cause Exception

As with the FBAR, the IRS may waive penalties if you can demonstrate reasonable cause for the failure to file. However, "I didn't know about FATCA" is generally not sufficient on its own. You must show that you exercised ordinary business care and prudence.

What Foreign Financial Institutions Report About You

Under FATCA, foreign financial institutions (FFIs) are required to identify US account holders and report their account information to the IRS. Most countries have entered into intergovernmental agreements (IGAs) with the US to facilitate this reporting.

How FFIs Identify US Persons

When you open an account at a foreign bank, you are typically asked to complete a form (often based on IRS Form W-9 or W-8BEN) declaring your US tax status. Foreign banks use several indicators to identify US persons:

• US citizenship or permanent residency
• US birthplace
• US address or telephone number
• US person listed as a signatory or beneficiary
• Standing instructions to transfer funds to a US account
• Power of attorney granted to a US person

What Information Is Shared

Under Model 1 IGAs (the most common type), the foreign bank reports the following to its local tax authority, which forwards it to the IRS:

• Name, address, and US TIN (SSN or ITIN)
• Account number
• Account balance or value
• Income (interest, dividends, gross proceeds from sales)

This means the IRS often already knows about your foreign accounts before you file. Form 8938 is your opportunity to report them voluntarily.

Special Situations

FATCA and Cryptocurrency

Cryptocurrency reporting under FATCA is a gray area that continues to evolve:

• Held on a foreign exchange: If your cryptocurrency is held in an account at a foreign exchange that qualifies as a foreign financial institution, the account is reportable on both the FBAR and Form 8938 (if thresholds are met).
• Held in a private wallet: Directly held cryptocurrency in a non-custodial wallet (where you control the private keys) may not be a specified foreign financial asset because there is no foreign financial institution or account. However, this is not definitively settled.
• Foreign-issued tokens and DeFi: Income is reportable. Whether the underlying assets are "specified foreign financial assets" depends on the specific facts.

For a detailed analysis of crypto tax obligations for expats, see our crypto tax guide for Americans abroad.

FATCA and Foreign Pensions

Foreign pension plans and retirement accounts are reportable on Form 8938 if they meet the threshold. This includes:

• UK SIPPs and workplace pensions
• Canadian RRSPs and TFSAs
• Australian superannuation accounts
• German Riester and Rürup pensions
• French assurance-vie policies with cash value

Many of these may also require additional forms (Form 3520 for trusts, Form 8621 for PFICs). The interaction between FATCA and pension reporting is complex and often requires professional guidance.

FATCA and Foreign Real Estate

Direct ownership of foreign real estate is not a specified foreign financial asset. However:

• If the property is held through a foreign corporation, partnership, or trust, your interest in that entity is reportable.
• If the property generates rental income, that income is reportable on your tax return.
• If you sell the property, capital gains are reportable.

FATCA and Foreign Businesses

If you own an interest in a foreign partnership, foreign corporation, or foreign LLC, that interest is reportable on Form 8938. You may also need to file:

• Form 5471 (foreign corporation)
• Form 8621 (PFIC)
• Form 8865 (foreign partnership)
• Form 8858 (foreign disregarded entity)

These forms are in addition to, not in place of, Form 8938.

How FileAbroad Helps With FATCA Compliance

FileAbroad screens and prepares Form 8938 within accepted engagements when your facts and asset profile create a reporting requirement.

• Threshold analysis: We review your asset profile to determine whether Form 8938 is required.
• Asset identification: We help identify which of your foreign assets are "specified foreign financial assets" and which are excepted.
• Form coordination: We coordinate Form 8938 with the FBAR, Form 5471, Form 8621, and other foreign reporting forms to avoid double-reporting errors.
• Valuation and conversion: We calculate maximum and year-end values using the correct Treasury exchange rates.
• Penalty review: If you have missed prior filings, we screen whether a catch-up procedure is appropriate.

FATCA preparation is quoted as part of a complex return engagement or a screened catch-up case. Start with the free intake to discuss your foreign asset profile.

Frequently Asked Questions

What is the FATCA threshold for Americans living abroad?

For single filers living abroad, Form 8938 is required if specified foreign financial assets exceed $200,000 at year-end or $300,000 at any time during the year. For married couples filing jointly, the thresholds are $400,000 (year-end) and $600,000 (anytime). These thresholds are significantly higher than the FBAR's $10,000 aggregate threshold.

Is FATCA the same as FBAR?

No. FATCA (Form 8938) and FBAR (FinCEN 114) are separate requirements. FBAR is filed with FinCEN when foreign accounts exceed $10,000 aggregate. FATCA is filed with your IRS tax return when foreign assets exceed higher thresholds ($200,000+ for single expats). FBAR covers accounts; FATCA covers a broader range of financial assets including foreign stock, partnership interests, and financial instruments. Many expats must file both.

What foreign assets must be reported on Form 8938?

Form 8938 requires reporting of specified foreign financial assets, which includes: foreign bank and brokerage accounts; foreign stocks and securities not held in a financial account; interests in foreign partnerships, corporations, and trusts; foreign-issued life insurance policies with cash value; foreign pension and retirement accounts; and foreign financial instruments with an issuer or counterparty that is not a US person. Foreign real estate held directly is generally not reportable, but foreign real estate held through a foreign entity may be.

What are the penalties for not filing Form 8938?

The penalty for failure to file Form 8938 is $10,000. If the IRS notifies you of the failure and it continues, additional penalties of up to $50,000 may apply. A 40% penalty can apply to underpayments of tax attributable to non-disclosed foreign financial assets. Criminal penalties may apply in cases of fraud. These penalties are separate from and in addition to FBAR penalties.

Do I report foreign cryptocurrency on Form 8938?

Digital currency is generally treated as a specified foreign financial asset for FATCA purposes if it is held in an account maintained by a foreign financial institution or if it represents a foreign financial instrument. Cryptocurrency held directly (in a private wallet not associated with a foreign exchange or institution) may fall outside the reporting net, but this area is evolving. Cryptocurrency income is reportable on your tax return regardless of FATCA status.