As an American working in Hong Kong, you can exclude up to $126,500 of your 2024 earnings under the foreign earned income exclusion. Good news, but if your combined foreign accounts ever held more than $10,000 at once, you must file a Report of Foreign Bank and Financial Accounts (FBAR) and, in many cases, a FATCA disclosure. Expat tax return preparation often hinges on nailing these foreign account compliance rules.

Streamline your expat tax return preparation in Hong Kong by understanding reporting duties, gathering your account details, and choosing the right exclusions. You’ll avoid last-minute stress and potential penalties.

Understand reporting obligations

Before you hunt down statements, know which forms the IRS and FinCEN expect from you. At a minimum, you likely face two sets of rules:

  • FBAR (FinCEN Form 114): required if your foreign financial accounts exceeded $10,000 in combined value at any point in the year.
  • FATCA (Form 8938): required if your specified foreign assets top the thresholds set for expats. (See fatca reporting thresholds and our summary of fatca reporting obligations).
  • IRS foreign account disclosure: both FBAR and FATCA tie into broader irs foreign account disclosure rules you must follow.

Good news, these obligations overlap—so once you’ve organized your accounts you’ll cover both requirements in one go.

Gather account records

You’ll need a clear inventory of every overseas financial account you held during the tax year. That includes:

  • Bank and savings accounts (checking, time deposits, joint accounts)
  • Investment accounts (brokerage, mutual funds, ETFs)
  • Retirement plans (employer-sponsored or private)
  • Digital assets (virtual currency wallets held with foreign exchanges)

For each account, collect:

  • Account number and institution name
  • Maximum balance of the year
  • Monthly or quarterly statements (digital copies work)

A simple spreadsheet helps. Start early so you’re not scrambling before April deadlines. If you’re unsure which assets count, review our guide to foreign asset reporting requirements.

File FBAR and FATCA reports

When your data is in order, it’s time to file. You’ll tackle two distinct forms.

File FinCEN form 114

  1. Create a BSA E-Filing account at the Treasury’s website.
  2. Select “FinCEN Form 114” and choose the correct calendar year.
  3. Enter institution details, account numbers, and maximum balances.
  4. Review for accuracy, then submit electronically by April 15 (with an automatic 6-month extension).

Filing FBAR online covers most of your overseas bank account reporting duties. Check the full list of foreign bank account reporting rules if you have complex holdings.

Attach form 8938 to your return

  1. Download Form 8938 from the IRS site.
  2. List your specified foreign assets and values at year-end.
  3. Complete Part I or II based on filing status and asset thresholds.
  4. Submit Form 8938 with your Form 1040 by the due date (or extension).

If you hit the reporting trigger, this FATCA disclosure satisfies key foreign account disclosure requirements.

Claim exclusions and credits

Once your forms are in, trim your tax bill by using expat-specific breaks.

Use the foreign earned income exclusion

You can exclude up to $126,500 of foreign salary for 2024 if you meet either the bona fide residence or physical presence test. (See Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.)

Tap the foreign tax credit

If you paid income tax to Hong Kong, you may offset U.S. tax dollar-for-dollar. This credit can eliminate double taxation on the same earnings, and any unused credit carries forward up to 10 years.

Pairing these two strategies often leaves you owing little or no U.S. tax while working in Hong Kong.

Partner with a tax pro

American Pacific Tax specializes in foreign account compliance. We stay ahead of the Foreign Account Tax Compliance Act by monitoring updates at the foreign account tax compliance act page so you don’t have to. Our team can:

  • Review your account inventory for reportable items
  • File FBAR and FATCA forms accurately and on time
  • Help you claim the right exclusions and credits

You focus on your life in Hong Kong, we’ll handle the paperwork.

Ready to simplify your expat tax return preparation? Contact American Pacific Tax for a free initial consultation. You’ve got this.

Frequently asked questions

Do I need to file FBAR if I only had Hong Kong accounts?
Yes. If the combined value of all your foreign accounts exceeded $10,000 at any point, you must file FinCEN Form 114, even if one account held all the value.

How do FBAR and FATCA reports differ?
FBAR (Form 114) goes to FinCEN and covers all foreign accounts over $10,000 combined. FATCA (Form 8938) goes to the IRS with your 1040, and it applies when your specified foreign assets exceed expat thresholds. They overlap but each has unique filing rules.

What if I miss the FBAR deadline?
Late FBARs can incur penalties starting at $10,000 per violation, often rising up to 50 percent of the account balance. If you’re late, file as soon as possible and consider the IRS’s Streamlined Filing Compliance Procedures for reduced penalties.