What Every Expat Should Know About FATCA IRS Regulations

You’re living abroad and managing bank accounts or investments in another country, so understanding FATCA IRS regulations is key to staying compliant and avoiding costly fines. These rules, introduced under the Foreign Account Tax Compliance Act, determine when and how you report your foreign financial assets to the IRS. In this guide, you’ll learn what counts as a reportable asset, the filing thresholds, and the step-by-step process for both Form 8938 and the FBAR.

You’ll also find clear comparisons between FATCA and FBAR requirements, real-world expat scenarios, and practical tips for tracking deadlines and updates. Let’s dive in and make FATCA compliance simple and stress-free.

Understand FATCA IRS regulations

What is FATCA?

The Foreign Account Tax Compliance Act (FATCA) is a U.S. law enacted in 2010 to combat offshore tax evasion. It requires certain U.S. taxpayers living abroad to report their specified foreign financial assets if the aggregate value exceeds set thresholds. At the same time, foreign financial institutions must share information about U.S. account holders with the IRS to ensure transparency.

Who must file Form 8938?

You must file Form 8938, Statement of Specified Foreign Financial Assets, if you’re a U.S. citizen or resident alien and your foreign asset holdings cross FATCA thresholds. That includes bank accounts, brokerage accounts, foreign-issued life insurance or annuities, and certain foreign corporations or trusts.

What assets to report

Report any asset where you have an ownership interest, signature authority, or any other financial interest, such as:

• Foreign bank and brokerage accounts
• Shares in foreign corporations or partnerships
• Interests in foreign trusts or estates
• Foreign-issued insurance policies or annuities with cash value

Know reporting thresholds

Your filing requirement depends on where you live and your marital status. You’ll need to file Form 8938 if at year-end or on any single day the total exceeds the following:

For more details on specific amounts and exceptions, see FATCA reporting threshold.

Prepare form 8938

Gather your account details

Collect statements for each reportable account, noting account numbers, institution names and addresses, peak values during the year, and your ownership percentage. Having this organized upfront makes completing Form 8938 faster.

Fill out key sections

On Form 8938, you’ll provide:

• Part I: Personal information and filing status
• Part II: Summary of foreign asset categories
• Parts III–V: Detailed schedules for each asset class

Review the FATCA reporting requirements carefully to ensure you include all necessary schedules. If an asset is held through an intermediary, you may need to complete a FATCA Form W-9 or similar document.

Attach to your tax return

Form 8938 must be attached to your annual Form 1040 or Form 1040-NR by the tax deadline. If you request an extension for your return, that also extends your time to file Form 8938.

File your FBAR

When you need an FBAR

The FBAR (FinCEN Form 114) is a separate filing requirement. Even if you file Form 8938, you still need an FBAR if you have signature authority or financial interest in foreign accounts totaling more than $10,000 at any point in the calendar year.

How to submit FinCEN 114

You must file electronically through the BSA E-Filing System by April 15 each year (with an automatic extension to October 15). For step-by-step guidance, see how to file FBAR form and the official FBAR filing instructions. If you prefer, review the FBAR e-filing process before you begin.

Track your deadline

Mark your calendar for your FBAR due date and consider setting reminders a few weeks in advance. You can also find details on the fbar filing deadline.

Avoid common penalties

Penalties for FATCA non-filing

Missing Form 8938 can trigger steep fines. Here’s a summary:

Penalties for FBAR violations

FBAR penalties can be even more severe if you won’tfully report your accounts. Examples include:

• Civil penalty up to $10,000 per non-willful violation
• Civil penalty up to the greater of $100,000 or 50% of account balance per willful violation
• Possible criminal charges for willful misconduct

Manage ongoing compliance

Keep track of deadlines

Use a digital calendar or tax app to note both January 31 (information returns) and April 15/October 15 (tax and FBAR filings). Review these each year so you’re never caught off guard.

Review asset changes yearly

Every year you should audit your holdings. Did you open new accounts? Close old ones? A quick review helps you determine if thresholds change.

Update forms when needed

If your financial situation evolves—say you inherit a foreign trust or invest in an overseas partnership—you may need to file amended returns or additional schedules. Staying proactive reduces last-minute headaches.

Key takeaways:

• FATCA IRS regulations require Form 8938 when your foreign assets exceed specific thresholds
• FBAR (FinCEN 114) is a separate obligation for accounts over $10,000
• Gather accurate account details before filling forms
• Missing filings can lead to penalties up to 40% of unpaid tax or major FBAR fines
• Use calendars and annual reviews to stay on top of your expat tax obligations

By following these steps and linking your FATCA and FBAR requirements, you’ll protect your finances, avoid penalties, and keep your international life running smoothly.