FBAR vs. Form 8938: Two Foreign-Account Reports You File Separately

$10,000. That is the single number that trips up more people than any other in cross-border tax. It is the aggregate balance that triggers an FBAR. It is not the number that triggers Form 8938, it has nothing to do with how much foreign income you earned, and it is not adjusted for inflation, so it has meant the same thing since the FBAR was created. Most of the confusion I see comes from taxpayers assuming one form covers both jobs. It does not. These are two separate reports, filed with two separate agencies, under two separate bodies of law.

Here is a numbered sequence to work through so you file the right thing and stop guessing.

Step 1: Understand that these are two different laws

The FBAR and Form 8938 come from different statutes and go to different places. That is the whole reason you can owe one, both, or neither.

• The FBAR is FinCEN Form 114, authorized under the Bank Secrecy Act (31 U.S.C. §5314) and its rules at 31 CFR §1010.350. It is filed electronically through the FinCEN BSA E-Filing System, not with the IRS.
• Form 8938, Statement of Specified Foreign Financial Assets, comes from FATCA, codified at §6038D. It is attached to your Form 1040 and filed with the IRS.

They serve overlapping but distinct purposes. The FBAR is an anti-money-laundering tool. Form 8938 is an income-tax compliance tool tied directly to your return. This is why one goes to Treasury's financial-crimes bureau and the other rides along with your 1040.

Step 2: Run the FBAR threshold first

You must file an FBAR if the aggregate value of all your foreign financial accounts exceeds $10,000 at any point during the calendar year. That is the trigger, and it is aggregate, not per-account.

Read "at any point" literally. If you had $6,000 in a checking account in London and $5,000 in a savings account in the same bank, your aggregate is $11,000, and you have crossed the line even though neither account alone did. If you moved $10,001 through a single account for one afternoon and then wired it back out, you have technically hit the threshold.

Who has to file:

• A U.S. person (citizen, resident, or certain entities) with a financial interest in, or signature authority over, foreign financial accounts.
• Signature authority counts even with no ownership. If you can sign on your employer's foreign account or a relative's account, you may have an FBAR obligation with zero dollars of your own money at stake.

The FBAR is due April 15 with an automatic extension to October 15 (no form required for the extension). It is filed for the calendar year regardless of your tax year.

Step 3: Run the Form 8938 thresholds separately

Form 8938's thresholds are higher, they vary by filing status and residency, and they are measured two ways: a year-end value and a highest-value-during-the-year value. Meeting either one triggers the form.

As of the 2024 tax year, under §6038D and Reg. §1.6038D-2, the thresholds are:

Filing status and residence	More than (year-end)	Or more than (any time)
Single or MFS, living in the U.S.	$50,000	$75,000
MFJ, living in the U.S.	$100,000	$150,000
Single or MFS, living abroad	$200,000	$300,000
MFJ, living abroad	$400,000	$600,000

Two things to notice. First, the "living abroad" thresholds are far higher, which recognizes that people who actually live overseas hold ordinary local accounts that would otherwise generate constant filings. Second, "specified foreign financial assets" is broader than "accounts." It includes foreign accounts, but also foreign stock or securities held outside an account, interests in foreign entities, and certain foreign financial instruments. An FBAR is about accounts; Form 8938 reaches assets an FBAR never touches.

Step 4: Map the overlap and the gaps

Some assets go on both forms, some go on only one, and the reporting is not symmetrical. Filing one does not satisfy the other, even for the identical account.

• A foreign bank account you own outright: usually both, once you clear each threshold.
• Signature authority over an account you do not own: FBAR yes, Form 8938 no. Form 8938 keys off ownership of an asset, not signature power.
• Foreign stock held directly (not inside an account): Form 8938 yes, FBAR no.
• A foreign pension: often both, though valuation and the "account" characterization get technical, so this is a place to get specific advice.
• Assets inside a U.S. account, even if the underlying holdings are foreign: generally neither, because the account itself is domestic.

The IRS publishes a comparison of the two regimes on IRS.gov, and it is worth reading before you conclude that one covers you.

Step 5: Add the numbers up correctly for a real fact pattern

Work an example. A software engineer, single, living in the U.S., moved from Toronto three years ago. She kept a Canadian checking account (peak balance CAD 18,000, roughly USD 13,000), a Canadian TFSA holding mutual funds (peak roughly USD 40,000), and RSUs in a Canadian employer held in a brokerage account there (peak roughly USD 22,000).

Run each test:

1. FBAR: her foreign accounts aggregate well past $10,000 at their peaks, so she files FinCEN Form 114 and lists all three accounts.
2. Form 8938: as a single U.S. resident, her thresholds are $50,000 year-end or $75,000 at any time. Her combined specified assets peaked around USD 75,000. She is right on the edge, which means she has to value carefully, using the Treasury year-end exchange rate for the year-end test and reasonable peak values for the any-time test.
3. The complication: her TFSA held foreign mutual funds, which are almost certainly passive foreign investment companies under §1291. That drags in Form 8621 and PFIC reporting, an entirely separate headache the two account forms do not address. The TFSA that Canada treats as tax-free is not tax-free to the IRS.

She ended up filing FinCEN Form 114, Form 8938, and Form 8621. Three forms for what she thought of as "my old Canadian accounts." None of them made her owe much tax; all of them carried real penalties for nonfiling.

Step 6: Know what happens if you skip either one

The penalties come from different statutes and stack independently. This is why "I filed the FBAR, so I'm covered" is a dangerous assumption.

• FBAR: a non-willful violation penalty is capped per the statute at 31 U.S.C. §5321. In Bittner v. United States (2023), the Supreme Court held the non-willful penalty applies per report, not per account, which matters enormously if you have many accounts. Willful penalties are far larger and can reach a percentage of the account balance.
• Form 8938: §6038D(d) sets a $10,000 failure-to-file penalty, rising up to an additional $50,000 if the failure continues after IRS notice. There is also an extended statute of limitations under §6501(e)(1)(A)(ii): omitting more than $5,000 of income attributable to a specified foreign asset can keep the return open for six years.

If you are already behind, the fix is usually a voluntary compliance path rather than quietly filing this year and hoping. The Streamlined Filing Compliance Procedures exist for non-willful taxpayers and can eliminate most penalties if you qualify. Whether you qualify turns on facts, and the willfulness question is where an experienced representative earns the fee. For more on getting current, see /blog/streamlined-filing-compliance-procedures.

Step 7: File both, on their own schedules

Do not treat these as one task with one deadline. File the FBAR through the BSA E-Filing System and attach Form 8938 to your 1040.

• FBAR: FinCEN Form 114, e-filed, due April 15 with automatic extension to October 15.
• Form 8938: attached to Form 1040, due with your return including extensions.

Keep your valuation workpapers. Both regimes require you to convert foreign-currency balances to U.S. dollars, and both expect you to use a defensible rate. The Treasury Reporting Rates of Exchange are the standard reference for year-end conversion. Save the rate you used and the balance you started from, because the one document an examiner always asks for is the math behind the number you reported.

Sources

• 31 U.S.C. §5314 (FBAR authorization)
• 31 U.S.C. §5321 (FBAR penalties)
• 31 CFR §1010.350 (FBAR filing rules)
• FinCEN Form 114 (Report of Foreign Bank and Financial Accounts)
• IRC §6038D (Form 8938 / specified foreign financial assets)
• Reg. §1.6038D-2 (Form 8938 reporting thresholds)
• Form 8938, Statement of Specified Foreign Financial Assets
• IRC §6501(e)(1)(A)(ii) (six-year statute for omitted foreign-asset income)
• IRC §1291 and Form 8621 (PFIC reporting)
• Bittner v. United States, 598 U.S. 85 (2023)
• IRS.gov, Comparison of Form 8938 and FBAR Requirements
• Treasury Reporting Rates of Exchange