Table of contents:
What is FATCA and who must file Form 8938
FATCA stands for the Foreign Account Tax Compliance Act, which is a part of the Hiring Incentives to Restore Employment (HIRE) Act. It was enacted to enhance tax compliance among U.S. individuals who hold foreign accounts and assets.
As a result of FATCA, Form 8938 was introduced as an additional foreign account reporting requirement, separate from the FBAR, for U.S. persons who are obligated to disclose specific foreign assets to the IRS. Refer to the Difference between FinCEN 114 and Form 8938 and the IRS comparison of FATCA and FBAR requirements for more information.
The thresholds for reporting differ for individuals residing in the U.S. and those living abroad. You must file Form 8938 if your assets exceed the following values:
Single and married filing separately taxpayers living abroad: $200,000 on the last day of the tax year or $300,000 at any time during the year.
Married filing jointly taxpayers living abroad: $400,000 on the last day of the tax year and $600,000 at any time during the year.
Single and married filing separately taxpayers living in the U.S.: $50,000 on the last day of the tax year or $75,000 at any time during the year.
Married filing jointly taxpayers living in the U.S.: $100,000 on the last day of the tax year or $150,000 at any time during the year.
In addition to individual reporting requirements, foreign financial institutions are required to report on the assets of their American clients in order to avoid a 30% withholding on certain payments from the U.S. Once registered, financial institutions were assigned a Global Intermediary Identification Number (GIIN). You can find a list of banks with a GIIN on the IRS website.
Countries with the FATCA Intergovernmental Agreements (IGA)
The U.S. currently has active FATCA agreements, known as Intergovernmental Agreements (IGAs), with 107 countries:
Algeria, Angola, Anguilla, Antigua and Barbuda, Argentina, Armenia, Australia, Austria, Azerbaijan, the Bahamas, Bahrain, Barbados, Belarus, Belgium, Bermuda, Brazil, the British Virgin Islands, Bulgaria, Cabo Verde, Cambodia, Canada, the Cayman Islands, Chile, Colombia, Costa Rica, Croatia, Curaçao, Cyprus, the Czech Republic, Denmark, Dominica, the Dominican Republic, Estonia, Finland, France, Georgia, Germany, Gibraltar, Greece, Greenland, Grenada, Guernsey, Guyana, Holy See, Honduras, Hong Kong, Hungary, Iceland, India, Ireland, the Isle of Man, Israel, Italy, Jamaica, Japan, Jersey, Kazakhstan, Kosovo, Kuwait, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao, Malaysia, Malta, Mauritius, Mexico, Moldova, Montenegro, Montserrat, the Netherlands, New Zealand, Norway, Panama, Philippines, Poland, Portugal, Qatar, Romania, San Marino, Saudi Arabia, Serbia, Seychelles, Singapore, the Slovak Republic, Slovenia, South Africa, South Korea, Spain, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Sweden, Switzerland, Taiwan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, the Turks and Caicos Islands, Ukraine, the United Arab Emirates, the United Kingdom, Uzbekistan, and Vietnam.
Seven countries have finalized agreements and are scheduled to have active IGAs (Intergovernmental Agreements) soon:
China, Haiti, Indonesia, Iraq, Nicaragua, Paraguay, and Peru.
Types of accounts reported on FATCA (Form 8938)
If the value of your (listed below) foreign financial assets is greater than the reporting threshold that applies to you, you must file Form 8938 (FATCA) and report the following foreign financial accounts:
Non-U.S. bank (deposit and custodial) accounts.
Non-U.S. accounts where you have signature authority and financial interest.
Non-U.S. accounts and non-account investment assets held through a foreign or domestic grantor trust where you are the grantor.
Equity or debt interests in foreign financial institutions (other than interests that are regularly traded on an established securities market).
Non-U.S. retirement/pension accounts.
Interest in a non-U.S. pension or deferred compensation plan.
Foreign-issued life insurance or annuity contract with cash value.
Cryptocurrency (Bitcoin, etc.) held in a foreign institution.
If you own foreign real estate through an entity (a real estate corporation), include the value of that entity.
Other foreign financial assets (held directly, not through a U.S. custodian):
Foreign stock or securities (bonds) held in a financial account at a foreign financial institution.
Foreign stock or securities not held in a financial account.
Stock or securities issued by a non-U.S. entity (i.e., direct ownership of shares in a foreign corporation) if you’re not required to file Form 5471 (e.g., ownership below the 10% threshold, or otherwise exempt).
Interests in foreign partnerships, corporations (if not reported on 5471/8865), trusts/estates.
Foreign mutual funds (additional filing requirements may apply for PFIC 8621), ETFs, and pooled funds.
Foreign hedge funds and private equity funds.
Foreign derivatives, swaps, or other financial instruments/contracts with a non-U.S. counterparty.
❗ Important notes:
Report only the brokerage account in which the stocks are held, not the actual stock holdings.
When you sell stocks, the sales must be reported on your federal tax return.
If you own more than 10% of a private foreign company, it must be reported on Form 8938 (FATCA).
If you do not hold any foreign bank accounts, there is no requirement to prove the absence of such accounts.
If you closed a bank account during the tax year, you must report the account and its final balance on FBAR (FinCEN 114) and FATCA (Form 8938) reports.
Foreign financial accounts not reportable on FATCA:
Foreign accounts held at a foreign branch of a U.S. financial institution.
Financial accounts held at a U.S. branch of a foreign financial institution.
Foreign accounts where you have signature authority and no financial interest (i.e., you can access them only as an agent), such as an employer's account or someone else's accounts over which you have power of attorney.
The contents of foreign stocks or securities held in a financial account at a foreign financial institution.
Note: The account itself is subject to reporting, but not the contents.
Indirect interests in foreign financial assets through an entity.
Domestic mutual funds investing in foreign stocks and securities.
Social security–type program benefits provided by a foreign government.
Assets held directly: foreign currency, cash, precious metals, gold, art, antiques, jewelry, cars, and other collectibles.
Cryptocurrency held in a U.S. branch of a foreign institution or held directly (on a hard drive).
Foreign real estate owned directly, like a home.
How to prepare and file FATCA (Form 8938)
Form 8938 is an integral part of Form 1040 and cannot be self-prepared, as we are signing off on the project. When creating a Tax Questionnaire, click Yes next to the statement: I have financial accounts outside the U.S., and list your foreign financial account details on the Non-US Financial Accounts tab.
Extension of time to file Form 8938
Form 8938 should be filed together with your income tax return (Form 1040) and is generally due by April 15th. However, if you are an expat, you automatically receive an extension of two months until June 15th. If needed, you can also request an additional extension to file until October 15th or even December 15th.
Note: FATCA reporting has a 6-year statute of limitations. There is no justifiable reason for you to close any of your foreign financial accounts because of FATCA. Doing so may raise suspicion with the IRS, signaling that you, as a U.S. expat taxpayer, are attempting to evade detection. If you have failed to file Form 8938 when it was required, it is recommended to file amended returns, FATCA, and FBAR reports through the Streamlined Foreign Offshore Procedures. For pricing information, refer to Streamlined Procedures services pricing on our website.