When you’re an American expat with foreign bank accounts or investments, understanding the FATCA reporting threshold is crucial to staying compliant with U.S. tax law and avoiding expensive penalties. Form 8938, Statement of Specified Foreign Financial Assets, is the IRS form that captures your foreign holdings. In this guide you’ll learn what counts, how to calculate your totals, and when you need to file.
Understand reporting thresholds
The FATCA reporting threshold determines whether you must file Form 8938. You meet your filing obligation if your specified foreign financial assets exceed a threshold at year-end or at any point during the year. Exceed either test and you need to report.
Threshold summary
| Filing status | Test | In U.S. threshold | Abroad threshold |
|---|---|---|---|
| Single or separate filers | Year-end | $50,000 | $200,000 |
| Single or separate filers | Any-time | $75,000 | $300,000 |
| Married filing jointly | Year-end | $100,000 | $400,000 |
| Married filing jointly | Any-time | $150,000 | $600,000 |
Qualifying as living abroad
You’re considered living abroad for FATCA if your tax home is in a foreign country and you spend at least 330 full days in any consecutive 12-month period outside the U.S. Meeting the abroad test raises your thresholds, acknowledging that expats often maintain larger balances to cover living expenses.
If you want more on general obligations and detailed definitions, check our FATCA reporting requirements.
Identify specified assets
FATCA covers two main categories of foreign holdings. Your institution may ask you to fill out a FATCA Form W-9 so they can verify your U.S. status and report your interest income. That request doesn’t replace your duty to file Form 8938 if you meet the fatca reporting threshold. Knowing what counts—and what doesn’t—keeps your reporting both accurate and streamlined.
Assets you must report
- Foreign financial accounts such as bank and brokerage accounts
- Non-account assets held for investment: stocks, securities, partnership interests
- Certain insurance or annuity contracts with cash values
Assets you can exclude
- Direct ownership of foreign real estate held in your own name
- Personal assets like collectibles or household goods
- Assets already reported on other forms may be left off Form 8938 to avoid duplicate disclosure
Partial overlap with other forms
Even if you report a foreign account on FBAR (FinCEN Form 114) or Form 5471, its value still counts toward your FATCA reporting threshold. However you can exclude it from your 8938 attachment to avoid listing it twice. For FBAR details, see our FBAR filing instructions.
Calculate your asset value
Estimating the correct value for each asset ensures you don’t under- or overreport.
Estimate fair market value
- Use the highest fair market value during your tax year
- Rely on account statements, brokerage reports, or independent appraisals
- For mutual funds and stocks, use year-end share prices
Convert foreign currencies
Convert your balances to U.S. dollars using published IRS exchange rates or reasonable annual averages. Keep your calculation method consistent in case the IRS requests proof.
File Form 8938
When you exceed your reporting threshold, follow these steps to submit Form 8938.
Attach to your return
Include Form 8938 with your annual Form 1040 or 1040NR, not as a separate filing. Sign and date the form along with your tax return.
Deadline and extensions
Form 8938 shares the same due date as your tax return: April 15, with an automatic extension to October 15 if you file Form 4868 by the original deadline. If you also need to report foreign bank accounts separately, our FBAR filing instructions cover deadlines and e-filing tips.
Avoid costly penalties
Missing the FATCA filing deadline or understating your foreign assets can trigger heavy fines.
Failure to file
The IRS imposes a $10,000 penalty if you don’t file Form 8938 when required. Continued failure after IRS notification can add up to $50,000 more.
Understatement penalty
If you underreport assets and that leads to a tax understatement, you face an additional penalty equal to 40 percent of the understated tax amount.
Reasonable cause relief
You can avoid penalties by demonstrating reasonable cause, such as relying on expert advice or facing unforeseen circumstances. Document your process and any professional guidance to support your case.
Key takeaways to remember
- Monitor your specified foreign financial assets against both year-end and any-time thresholds
- Track what counts and what you can exclude to simplify Form 8938
- Use consistent valuation and currency conversion methods for IRS compliance
- Attach Form 8938 to your tax return by April 15, or October 15 with an extension
- Consider FBAR requirements for bank accounts and follow our FBAR filing instructions
Now that the FATCA reporting threshold makes sense, review your account balances, estimate their values, and file Form 8938 on time to keep your expat life in good standing. If you have a tip for fellow expats or a question about your situation, share it in the comments below.