FBAR vs Form 8938: Expat Reporting Guide

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A foreign checking account with a balance as low as $10,001 at any point during the year triggers a federal filing requirement that has nothing to do with your tax return — and ignoring it can cost up to $16,536 for a single non-willful mistake, or up to half your account balance if the IRS decides the violation was willful. Most US expats with foreign accounts need to file two separate forms: the FBAR (FinCEN Form 114) and, if assets are large enough, IRS Form 8938. The two overlap significantly but go to different agencies, carry different penalties, and cover different assets. Filing one does not satisfy the other.

What Is the FBAR (FinCEN Form 114)?

The FBAR — Report of Foreign Bank and Financial Accounts — is filed with the Financial Crimes Enforcement Network (FinCEN), not the IRS. Its legal basis is the Bank Secrecy Act, which predates FATCA by four decades. If you hold a financial interest in or signature authority over one or more foreign financial accounts, and the aggregate maximum value of those accounts exceeded $10,000 at any point during the calendar year, you must file.

The $10,000 threshold is aggregate and tests the peak balance, not the year-end balance. Three accounts each holding $4,000 trigger the requirement because the total exceeds $10,000. An account that peaked at $15,000 in March and closed the year at $2,000 still requires an FBAR for that year. For a broader look at how foreign accounts intersect with US tax obligations, see the US expat banking and taxes guide.

What Accounts Count

FBAR covers foreign financial accounts broadly: bank checking and savings accounts, brokerage accounts, mutual fund accounts, and other investment or deposit accounts held at foreign financial institutions. It also covers accounts at foreign branches of US banks. If you hold securities at a foreign broker, that account counts even if the underlying investments are US-listed stocks.

Accounts held at US financial institutions — including US brokerage accounts such as those at Charles Schwab — are domestic accounts and do not go on the FBAR, regardless of what foreign securities you hold inside them. Your US IRA and 401(k) are also excluded. For how those retirement accounts are treated as an expat, see the expat 401(k) and IRA guide.

The Signature Authority Trap

You do not need to own a foreign account to be required to report it. If you have signature authority over an account — meaning you can move money or direct transactions — you may have an FBAR obligation even with no personal financial interest. This catches employees with access to corporate operating accounts, people with power of attorney over a parent's overseas account, and founders of foreign subsidiaries.

What Is Form 8938 (FATCA)?

Form 8938, Statement of Specified Foreign Financial Assets, is part of the Foreign Account Tax Compliance Act (FATCA) enacted in 2010. Unlike the FBAR, it is filed with the IRS and attached to your annual federal tax return. It covers a broader universe of foreign assets, and its reporting thresholds are much higher — especially for expats.

If you live outside the US as a single filer, you must file Form 8938 if your foreign financial assets exceed $200,000 on December 31 or $300,000 at any point during the year. For married couples filing jointly with a foreign tax home, the thresholds double: $400,000 on December 31 or $600,000 at any time during the year. US residents face lower thresholds ($50,000/$75,000 for single filers; $100,000/$150,000 for joint filers).

What Form 8938 Covers Beyond Bank Accounts

FATCA sweeps significantly wider than the FBAR. In addition to foreign financial accounts, Form 8938 captures: foreign stocks or securities held outside any account (directly with the issuer), interests in foreign partnerships, foreign mutual funds held outside a custodial account, foreign life insurance or annuity contracts with a cash surrender value, and interests in foreign hedge funds or private equity funds.

Practically speaking, if you hold shares in a foreign company directly through its share registrar, those shares count toward your Form 8938 threshold even though they fall entirely outside the FBAR framework. A capital interest in a foreign LLC or limited partnership is similarly in scope for Form 8938 but not FBAR.

FBAR vs Form 8938: Side-by-Side

Feature	FBAR (FinCEN Form 114)	Form 8938 (FATCA)
Filed with	FinCEN — BSA E-Filing System	IRS — attached to Form 1040
Threshold (expat, single)	$10,000 aggregate at any time	$200,000 year-end or $300,000 any time
Threshold (expat, married joint)	$10,000 aggregate at any time	$400,000 year-end or $600,000 any time
Threshold (US resident, single)	$10,000 aggregate at any time	$50,000 year-end or $75,000 any time
Annual deadline	April 15 (automatic to Oct 15)	With tax return; Oct 15 with extension
Extension process	Automatic — no request needed	Follows tax return extension
Assets covered	Foreign financial accounts only	Accounts + foreign stocks, partnerships, mutual funds, insurance cash value, private funds
Non-willful penalty	Up to $16,536 per annual report	$10,000 + up to $60,000 more after IRS notice
Willful penalty	Greater of $165,353 or 50% of account balance	40% accuracy penalty on understated income; criminal exposure
Satisfies the other filing?	No	No

Thresholds and penalty amounts verified against IRS comparison guidance and FinCEN FBAR page, June 2026. FBAR penalty maximums adjust annually for inflation; Form 8938 thresholds remain unchanged since 2010 and are not indexed.

Four Real Scenarios — Who Files What

The overlap between the two forms creates confusion. Applying concrete cases makes the decision cleaner.

Scenario 1 — Small Foreign Account (FBAR Only)

You live in Mexico and keep a local peso checking account that peaks at $18,000 during the year. Your total foreign financial assets are well below $200,000. You file an FBAR but not Form 8938. This is the most common situation for expats who maintain a single local bank account.

Scenario 2 — Large Holdings (Both Required)

You're a freelancer in Portugal with a EUR savings account that averages $250,000 and additional brokerage accounts at a local custodian. Both the FBAR and Form 8938 apply. You file FinCEN Form 114 through the BSA E-Filing System and attach Form 8938 to your 1040. Reporting the same account on both forms is correct and required — filing one does not satisfy the other.

Scenario 3 — Foreign Stocks Held Directly (Form 8938 Only)

You invested $350,000 in shares of a foreign company held directly through the company's share registrar — not through any brokerage account. Those shares do not appear on the FBAR because the FBAR only covers financial accounts. But they trigger Form 8938 because FATCA covers directly held foreign securities. In this scenario you file Form 8938 but not FBAR.

Scenario 4 — Signature Authority, No Personal Money

You work remotely as operations director and have signing rights over your employer's Singapore operating account, which holds $500,000+. You have no personal financial interest. You may still need to file an FBAR reporting signature authority. An employee signature authority deadline extension may apply — confirm with a tax professional on the specifics for your situation.

How to File Each Form

Filing the FBAR — Step by Step

1. Go to bsaefiling.fincen.gov and select FinCEN Form 114. No registration is required for individual filers filing on their own behalf.
2. Gather account details: institution name and mailing address, your account number, account type (bank, brokerage, mutual fund, other), and the maximum value at any point during the year — converted to USD at the Treasury's December 31 exchange rate.
3. Enter each account separately. Do not net accounts against each other or report an average balance.
4. Submit electronically. The FBAR cannot be mailed — it must be filed through the BSA E-Filing System. Save the confirmation number as proof of submission.
5. Deadline: April 15 for the prior calendar year. The automatic extension to October 15 applies without any action on your part.

Filing Form 8938 — Step by Step

1. Download Form 8938 from irs.gov and complete it as part of your annual 1040 package. It cannot be filed separately.
2. List each specified foreign financial asset: accounts, foreign securities held outside accounts, foreign partnership interests, and any other covered assets above the reporting threshold.
3. Use the Treasury exchange rates to convert all values to USD. The year-end rate applies to December 31 values; for the year's peak value, use the rate in effect on the date the maximum occurred.
4. Attach to your return and file by the due date, including any extension. A valid tax return extension also extends Form 8938.

Penalties You Need to Understand

The penalty structure is asymmetric. A forgotten FBAR for a modest account can produce a penalty larger than the account balance if the IRS considers the omission willful. Understanding the distinction between willful and non-willful — and the recent Supreme Court ruling — changes how exposed you actually are.

FBAR Penalties (Current Amounts)

For non-willful violations assessed on or after January 17, 2025, the maximum civil FBAR penalty is $16,536 per annual FBAR report. A 2023 Supreme Court decision in Bittner v. United States confirmed that non-willful penalties apply per annual filing, not per account — a significant protection for people with multiple foreign accounts who were simply unaware of the requirement.

Willful violations are a different category entirely. The maximum civil penalty is the greater of $165,353 or 50 percent of the highest aggregate account balance during the violation. Willful FBAR violations can also trigger criminal prosecution: fines up to $500,000 and up to 10 years in prison. The distinction between willful and non-willful depends on the facts — genuine ignorance of the rule is treated differently from deliberate concealment.

Form 8938 Penalties

The IRS imposes an initial $10,000 penalty for failure to file or disclose on Form 8938. If the failure continues after the IRS sends a notice, penalties of $10,000 per 30-day period accrue, up to $60,000 in additional penalties. Any understated income connected to undisclosed foreign assets faces an accuracy-related penalty of 40 percent instead of the usual 20 percent. Criminal penalties remain possible for willful failures.

What to Do If You're Behind

The IRS offers two structured pathways for expats who have missed FBARs or overlooked Form 8938. Acting before the IRS contacts you is the decisive factor that separates a paperwork exercise from an enforcement action.

Delinquent FBAR Submission Procedures: If your tax returns were accurate and you paid tax on all income from your foreign accounts, you can file the missing FBARs through the BSA E-Filing System marked as delinquent. Include an explanation of why they were not filed. The IRS Delinquent FBAR Submission Procedures state that penalties will not be imposed when income was properly reported and the IRS has not already opened an examination.

Streamlined Foreign Offshore Procedures (SFOP): If you also missed tax returns or have unreported foreign income, a separate penalty-free catch-up program covers three years of returns plus six years of FBARs simultaneously. For a complete walkthrough of eligibility, required forms, and exactly how to certify non-willful conduct, see the dedicated guide to IRS Streamlined Filing for expats.

If you want to reduce your ongoing US tax burden while staying compliant, the Foreign Earned Income Exclusion guide explains how the FEIE works alongside — not instead of — your FBAR and Form 8938 obligations.

Common Mistakes Expats Make

• Testing the threshold at year-end only: The FBAR threshold is triggered by the peak balance at any point during the year. An account that briefly held $12,000 in April still requires filing even if it ends December at $3,000.
• Assuming FATCA replaces FBAR: Filing Form 8938 does not satisfy the FBAR. Many expats with smaller balances are below the Form 8938 threshold but still owe the FBAR.
• Forgetting accounts you can sign on: Business operating accounts, family trust accounts, and employer accounts where you have signing authority are frequently missed.
• Assuming all foreign retirement plans are excluded: US IRAs and 401(k)s are excluded. Foreign employer pension plans may not be — their treatment depends on the account structure and applicable tax treaty.
• The crypto gray zone: Pure cryptocurrency held in a self-custody wallet does not currently trigger the FBAR. But if you hold crypto on a foreign exchange that also holds fiat currency, the full account value likely counts toward the $10,000 aggregate threshold. FinCEN has proposed rules to extend FBAR reporting explicitly to foreign crypto accounts; those rules were not finalized as of mid-2026.
• Wrong exchange rate: Use the Treasury Reporting Rates of Exchange to convert account values to USD. Using a spot rate from a different date can produce an incorrect reported maximum.

Data Notes / Sources Checked

Thresholds, penalty amounts, and procedures were verified against official government sources in June 2026:

• IRS: Comparison of Form 8938 and FBAR Requirements
• IRS: Report of Foreign Bank and Financial Accounts (FBAR)
• FinCEN: Report Foreign Bank and Financial Accounts
• IRS: Instructions for Form 8938 (Statement of Specified Foreign Financial Assets)
• IRS: Delinquent FBAR Submission Procedures
• IRS: Streamlined Foreign Offshore Procedures (US Persons Residing Outside the US)

FBAR civil penalty maximums are adjusted annually for inflation under 31 USC 5321. The non-willful maximum of $16,536 and willful maximum of $165,353 reflect amounts effective January 17, 2025. Form 8938 thresholds have not been adjusted since FATCA's 2010 enactment and are not indexed for inflation. Cryptocurrency FBAR treatment reflects FinCEN's position as of mid-2026 — proposed rules extending FBAR to foreign digital asset accounts have not been finalized.

Conclusion

If you have any foreign financial account that has ever held more than $10,000, the FBAR almost certainly applies. If your total foreign assets approach six figures, check whether you also cross the Form 8938 thresholds for your filing status and residency location. The two forms protect different parts of the compliance picture, and both are required when both thresholds are met.

Most expats who catch up on late FBARs face no penalties at all — provided they act before the IRS makes contact. The Delinquent FBAR Submission Procedures and Streamlined Foreign Offshore Procedures exist precisely for people who were unaware of the requirement. Use them before the window closes.

Disclaimer: This article is for general informational purposes and does not constitute legal or tax advice. FBAR and FATCA rules involve complex, fact-specific determinations that vary based on account type, residency status, tax treaty position, and other factors. Consult a qualified US international tax attorney or CPA before making compliance decisions. Penalty amounts described reflect maximums as of early 2026 and are subject to annual inflation adjustment.