US expats are often confused by the differences between Form 8938 and FBAR. In this video blog, David McKeegan, Co-Founder of Greenback Expat Tax Services will explain how each is used and the important information you should know.
D. McKeegan: Hi everybody. My name is David McKeegan. I’m with Greenback Expat Tax Services and our question this week is, ”What’s the story with form 8938?” This is the statement of foreign financial assets. This is part of the FATCA regulations. Basically, the form 8938 is very similar to the FBAR, but the FBAR gets reported to the US Treasury and 8938 goes to the IRS. What you’re going to be doing with this form is disclosing your foreign assets, your foreign interests in partnerships, if you have foreign bank accounts, if you have foreign mutual funds or stockholdings, any of these kind of items, need to be disclosed on the form 8938.
The thresholds are different. For the FBAR, it’s a $10,000 threshold across all your accounts out of the US. For the 8938, if you’re married filing singly and your balance in these accounts was over $200,000 on the last day of the year or over $300,000 on any day during the year, then you have to file Form 8938 and report these accounts. If you’re married filing jointly, those numbers get doubled. So it’s over $400,000 on the last day of the year or over $600,000 on any day during the year.
This includes things like foreign pensions, again, foreign stockholdings, if you have foreign partnership interests; all of these kind of things need to get reported on this form. A couple of things to note. First, even if you’re not required to file an 8938, you may still be required to file an FBAR. You should know that. The other thing to note is that if you’re already reporting items via Form 5471 for foreign corporations or foreign trusts on the 3520, if you’re reporting things on that, you don’t need to double report them. So you wouldn’t also need to fill out the Form 8938. It gets into a lot of detail, so I would recommend reading over the form or speaking to an accountant to help you determine if you need to file. Thank you very much.