This is one of the most common questions we receive from clients with foreign financial accounts.
Short Answer:
Form 8938 and FBAR both report foreign financial assets, but they are separate filings with different rules, thresholds, and filing requirements.
Explanation:
FBAR is filed separately with the U.S. Treasury and generally applies when aggregate foreign account balances exceed 10,000 dollars at any point during the year.
Form 8938 is filed with your U.S. tax return and applies when specified foreign financial assets exceed certain reporting thresholds, which vary depending on filing status and residency.
In many situations, taxpayers may need to file both forms.
Example:
A U.S. taxpayer with foreign bank accounts and foreign investment accounts may have both FBAR and Form 8938 filing obligations.
Common Mistake:
Assuming that filing one form satisfies all foreign asset reporting requirements.
When to Get Help:
Foreign asset reporting rules can be complex, especially where multiple countries, entities, or investment accounts are involved. We would be happy to review your accounts and confirm your reporting obligations.
If this situation applies to you, we would be happy to review your structure and confirm your filing requirements.