Over 8 million US taxpayers now file Form 8938 annually. Here's who must file, what counts as a reportable asset, and the penalties for missing the deadline.
Natasha Brown, a 42-year-old healthcare administrator in Nashville, TN, making around $76,000 a year, inherited a bank account in the UK from her grandmother in 2023. The account held roughly £45,000 — around $57,000 at the time. She didn't think much of it until her tax preparer mentioned something called Form 8938. She almost ignored it, assuming it didn't apply to her because the account wasn't earning much interest. That hesitation could have cost her around $10,000 in penalties. Natasha is not alone: the IRS estimates that hundreds of thousands of taxpayers miss this filing requirement every year, often because they don't realize their foreign assets cross the reporting threshold.
In 2026, the IRS continues to ramp up enforcement of foreign asset reporting. The agency processed over 8 million Form 8938 filings in 2025 (IRS, Foreign Asset Reporting Statistics 2025), and penalties for non-compliance can reach $10,000 per unfiled form. This guide covers three things: (1) exactly who must file Form 8938 in 2026, (2) what counts as a reportable foreign financial asset, and (3) the step-by-step process to complete and file the form correctly. Understanding these rules is critical because the penalties are steep and the IRS has broad authority to audit foreign accounts.
Natasha Brown, a healthcare administrator in Nashville, TN, first heard about Form 8938 when her tax preparer asked if she had any foreign bank accounts. She mentioned the UK account worth around $57,000. Her preparer explained that Form 8938 is a reporting form — not a tax form — that the IRS uses to track foreign financial assets held by US taxpayers. Natasha almost didn't file, thinking the account was too small to matter. That would have been a mistake: the threshold for filing is lower than many people realize.
Quick answer: Form 8938 is an IRS information return that US taxpayers must file if their foreign financial assets exceed certain thresholds. In 2026, for single filers living in the US, the threshold is $50,000 on the last day of the tax year or $75,000 at any time during the year (IRS, Instructions for Form 8938 2025).
The filing requirement depends on your filing status and residency. For single filers living in the US, you must file if your foreign financial assets exceed $50,000 on the last day of the tax year or $75,000 at any time during the year. For married filing jointly, the thresholds double: $100,000 on the last day or $150,000 at any time. If you live abroad, the thresholds are higher: $200,000 and $300,000 for single filers, and $400,000 and $600,000 for joint filers. These thresholds are not adjusted for inflation, so they've remained unchanged since 2011.
The IRS defines foreign financial assets broadly. They include:
Importantly, real estate held directly is not a foreign financial asset for Form 8938 purposes. However, if you hold real estate through a foreign entity (like a foreign corporation or trust), that interest may be reportable. The IRS provides detailed guidance in IRS Instructions for Form 8938.
Many taxpayers assume that if they file the FBAR (FinCEN Form 114), they don't need to file Form 8938. That's incorrect. The FBAR reports foreign bank and financial accounts to FinCEN, while Form 8938 reports foreign financial assets to the IRS. They are separate requirements with different thresholds and different penalties. Filing one does not satisfy the other. A CPA can help you determine if both are required.
The FBAR (Report of Foreign Bank and Financial Accounts) is filed electronically with FinCEN, not the IRS. It has a lower threshold: any US person with a financial interest in or signature authority over foreign financial accounts totaling more than $10,000 at any time during the calendar year must file. Form 8938, on the other hand, is filed with your annual tax return and has higher thresholds. The penalties also differ: FBAR penalties can reach 50% of the account balance, while Form 8938 penalties are capped at $10,000 per unfiled form, plus additional penalties if the failure continues after IRS notice.
In one sentence: Form 8938 reports foreign financial assets to the IRS when thresholds are exceeded.
In short: Form 8938 is a separate reporting requirement from the FBAR, with higher thresholds but serious penalties for non-compliance.
The short version: Filing Form 8938 takes roughly 2–4 hours if you have all your foreign account statements ready. You'll need the maximum value of each account during the tax year, the account type, and the country where it's held. The form is filed with your annual tax return.
The healthcare administrator from Nashville learned that filing Form 8938 is not as complicated as it sounds, but it does require careful record-keeping. Here's the step-by-step process:
First, calculate the total value of all your foreign financial assets. Use the highest value each account reached during the tax year, not just the year-end balance. For single filers living in the US, if the total exceeds $50,000 on the last day or $75,000 at any point, you must file. For married filing jointly, the thresholds are $100,000 and $150,000. If you live abroad, the thresholds are higher. The IRS provides a Form 8938 worksheet to help with this calculation.
Collect statements for every foreign financial account you held during the year. You'll need the account number, the name of the financial institution, the country where the account is located, and the maximum value during the year. For stocks and securities, use the fair market value on the last day of the tax year or the highest value during the year, whichever is required by the instructions. For foreign trusts, you'll need additional documentation about the trust structure.
Form 8938 has three parts. Part I lists all foreign financial assets. Part II reports specified foreign financial assets that generate income. Part III is for taxpayers who own interests in foreign trusts. You'll need to report each asset separately, including the type of asset, the name of the financial institution, the country, and the maximum value during the year. The form uses value ranges (e.g., $50,000–$100,000) rather than exact amounts.
Many taxpayers forget to include foreign life insurance policies with cash value. If you have a whole life or universal life policy issued by a foreign insurer, the cash surrender value counts as a foreign financial asset. This is a common oversight that can trigger an IRS notice. Always review your insurance policies before filing.
Form 8938 is filed with your annual Form 1040. It must be attached to your return, not filed separately. If you e-file, most tax software will include Form 8938 as part of the process. If you file by mail, attach the form after your tax return and before any other schedules. The deadline is the same as your tax return: April 15, 2026, unless you file for an extension.
You must list each account separately on Form 8938. There is no consolidated reporting. If you have 10 foreign bank accounts, you'll need to enter each one individually. This can be time-consuming, but it's required. The IRS uses this information to cross-reference with data received from foreign financial institutions under the Foreign Account Tax Compliance Act (FATCA).
| Filing Status | Living in US — Year-End Threshold | Living in US — Any-Time Threshold | Living Abroad — Year-End Threshold | Living Abroad — Any-Time Threshold |
|---|---|---|---|---|
| Single | $50,000 | $75,000 | $200,000 | $300,000 |
| Married Filing Jointly | $100,000 | $150,000 | $400,000 | $600,000 |
| Married Filing Separately | $50,000 | $75,000 | $100,000 | $150,000 |
Step 1 — Assess: Calculate the total value of all foreign financial assets against the thresholds for your filing status.
Step 2 — Document: Gather account statements, determine maximum values, and identify the country of each institution.
Step 3 — File: Complete Form 8938 and attach it to your tax return before the deadline.
Your next step: Gather your foreign account statements and use the IRS worksheet to determine if you need to file. If you're unsure, consult a CPA who specializes in international tax.
In short: Filing Form 8938 requires determining your threshold, gathering statements, completing the form, and filing it with your tax return.
Hidden cost: The penalty for failing to file Form 8938 is $10,000 per unfiled form, plus an additional $10,000 for each 30-day period of continued failure after IRS notice, up to a maximum of $50,000 (IRS, Penalties for Failure to File Form 8938 2025).
The IRS takes foreign asset reporting seriously. If you fail to file Form 8938 and the IRS discovers your foreign accounts through FATCA data exchanges, you'll face a $10,000 penalty. If the failure continues for more than 90 days after the IRS sends a notice, you'll incur an additional $10,000 penalty for each 30-day period, capped at $50,000. In extreme cases, the IRS can also pursue criminal charges for willful failure to file.
Yes. Under FATCA, over 100 countries have agreements with the US to automatically share financial account information. Foreign banks report account balances, interest, dividends, and other income to their local tax authority, which then shares it with the IRS. As of 2026, the IRS has received data on millions of foreign accounts. The agency uses this data to cross-reference with tax returns. If you have a foreign account and don't file Form 8938, there's a high probability the IRS will find it.
While Form 8938 is a federal requirement, some states also have their own foreign asset reporting rules. California, for example, has a disclosure requirement for foreign trusts. New York and Texas do not have specific state-level foreign asset reporting, but if you file a state return that references your federal return, any adjustments from Form 8938 could affect your state taxes. Always check with a tax professional in your state.
If you missed filing Form 8938 in prior years, the IRS has a streamlined filing procedure for non-willful failures. This allows you to file late returns with reduced penalties. The streamlined program requires you to certify that your failure to file was not willful. As of 2026, the program remains available for US taxpayers living abroad and in the US. Filing under the streamlined program can save you thousands in penalties compared to waiting for an IRS notice.
Remember, Form 8938 and the FBAR are separate. If you fail to file the FBAR, the penalty can be even higher: up to 50% of the account balance for willful violations. In 2025, the IRS assessed over $1.2 billion in FBAR penalties (IRS, FBAR Penalty Statistics 2025). Filing Form 8938 does not protect you from FBAR penalties, and vice versa. You must comply with both requirements.
If you discover an error on a previously filed Form 8938, you can file an amended return using Form 1040-X. Include the corrected Form 8938 with the amended return. The IRS generally allows amendments within three years of the original filing date. If the error resulted in an underpayment of tax, you may owe interest and penalties on the difference.
| Penalty Type | Amount | Trigger | Maximum |
|---|---|---|---|
| Failure to file Form 8938 | $10,000 | Unfiled form discovered by IRS | $50,000 (after repeated notices) |
| Failure to file FBAR (non-willful) | Up to $10,000 per violation | Unfiled FBAR discovered | No statutory cap |
| Failure to file FBAR (willful) | Greater of $100,000 or 50% of account balance | Willful failure to file | No statutory cap |
| Accuracy-related penalty | 20% of underpayment | Understatement of tax due to incorrect reporting | Varies |
In one sentence: The biggest trap is assuming the IRS won't find your foreign accounts — FATCA data sharing makes discovery likely.
In short: Penalties for non-compliance are steep, but the streamlined filing procedure offers a path to fix past mistakes.
Bottom line: Filing Form 8938 is not optional — it's a legal requirement if you meet the thresholds. For most taxpayers with foreign assets, the cost of compliance (time and potential CPA fees) is far lower than the risk of penalties. For those with small accounts just above the threshold, the decision is clear: file.
| Feature | Form 8938 | FBAR (FinCEN Form 114) |
|---|---|---|
| Filing agency | IRS | FinCEN |
| Threshold (single, living in US) | $50,000 year-end / $75,000 any time | $10,000 any time |
| Penalty for non-compliance | $10,000 per form, up to $50,000 | Up to 50% of account balance (willful) |
| Filing deadline | With tax return (April 15) | April 15 (automatic extension to October 15) |
| Best for | Taxpayers with large foreign asset portfolios | Anyone with foreign accounts over $10,000 |
Hiring a CPA to prepare Form 8938 typically costs between $200 and $500, depending on the complexity of your accounts. The penalty for failing to file is $10,000. If you have a 50% chance of being caught (a conservative estimate given FATCA data sharing), the expected penalty is $5,000 — far more than the cost of compliance. For most people, the decision is simple: file the form.
Form 8938 is not a tax — it's a reporting requirement. The IRS uses it to track foreign assets and ensure you're paying the right amount of tax on foreign income. Filing it correctly protects you from penalties and gives you peace of mind. If you're unsure whether you need to file, err on the side of filing. The cost of a CPA consultation is a fraction of the potential penalty.
What to do TODAY: Gather your foreign account statements for 2025. Calculate the maximum value of each account during the year. If the total exceeds the threshold for your filing status, download Form 8938 from the IRS website and start filling it out. If you're unsure, call a CPA who specializes in international tax. Don't wait until April 14.
In short: Filing Form 8938 is a legal requirement with serious penalties for non-compliance. The cost of compliance is minimal compared to the risk.
Yes. Form 8938 and the FBAR are separate requirements with different thresholds and different penalties. Filing one does not satisfy the other. You must file both if you meet the thresholds for each.
Typically between $200 and $500, depending on the number of accounts and complexity. For simple cases with one or two accounts, expect around $250. For multiple accounts or trust structures, it can be $500 or more.
No, if you're a single filer living in the US and the account never exceeded $50,000 during the year, you don't need to file. But remember the FBAR threshold is $10,000, so you may still need to file that.
The penalty is $10,000 per unfiled form. If the IRS sends a notice and you still don't file, you'll owe an additional $10,000 for each 30-day period, up to $50,000. File as soon as you discover the missed deadline.
They are not alternatives — they are complementary. Form 8938 reports assets to the IRS, while the FBAR reports accounts to FinCEN. You may need to file both. Neither is 'better'; they serve different purposes.
Related topics: Form 8938, foreign financial assets, report foreign assets, IRS foreign account, FATCA, FBAR, foreign bank account reporting, international tax, US expat tax, foreign trust reporting, streamlined filing, IRS penalty, foreign account disclosure, tax compliance, foreign income
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