Form 8938 - Foreign Financial Assets
As part of the main federal income tax return, form 1040, if you have foreign financial accounts and assets held outside the U.S. you will need to report those on form 8938 (the statement of specified foreign financial assets) each calendar year if you are over the threshold.
Threshold to report foreign assets and bank accounts
For taxpayers living outside of the United States:
Single - if the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.
Married filing jointly - if the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.
Married filing separately - if the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.
Specified foreign financial assets
These Include:
Foreign Bank and Financial Accounts
foreign financial assets held for investment (including stock of a foreign corporation, interest in a foreign trust or foreign estate, foreign options, foreign bonds and debentures)
Reporting foreign financial assets on form 8938
You normally report specified foreign financial assets if any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the asset are or would be required to be reported, included, or otherwise reflected on your income tax return.
Form 8938 and the Foreign Bank Account Report (FBAR)
The form 8938 is similar to the FBAR, but they are reported separately and the thresholds do differ - the FBAR is much lower.
When To File
While you are living abroad as a U.S. expat, the filing deadline for the U.S. tax return is June 15 each year (extended to July 15 for 2020).
You file form 8938 with your main federal tax return with the IRS.
Next Steps
If you have any questions, e.g. which financial institutions in foreign countries need to be reported or how filing a report for form 8938 is different to when you file an FBAR, feel free to contact one of our U.S. expat accountants here
