FBAR vs Form 8938: two reports, different rules, both can apply (US expat compliance guide)

TL;DR

• FBAR (FinCEN Form 114) — filed to FinCEN (Treasury), not the IRS. Triggered by $10,000 aggregate in foreign financial accounts at any point during the year. Penalty: non-willful up to $16,536 per report (per year, not per account); willful — the greater of $165,353 or 50% of the account balance.
• Form 8938 (FATCA Statement of Foreign Financial Assets) — filed with your 1040 to the IRS. Higher thresholds, scales with filing status and residence. Penalty: $10,000 initial + up to $50,000 continuation.
• Both can apply to the same person — they're not alternatives. Each has its own rules and you may owe both.
• FBAR covers more: any foreign account where you have signature authority (even employer accounts, family-member accounts you can sign on).
• Form 8938 covers different things: includes foreign-issued securities, interests in foreign entities, foreign pension plans — beyond just bank accounts.

Quick comparison table

Who needs FBAR

Any US person (citizen, resident, Green Card holder, US entity) with financial interest in or signature authority over foreign financial accounts whose aggregate value exceeded $10,000 at any point during the calendar year.

"Financial interest" means ownership. "Signature authority" means you can direct disposition of assets even if you don't own them.

This catches:

• The savings account you kept open in your home country with $11,000 in it.
• Your foreign employer's account you have signing rights on for business expenses.
• Your mother's account in Russia where you're listed as a backup signer.
• The crypto exchange account at Binance, Kraken EU, etc. (if it holds fiat currency or securities — under FinCEN Notice 2020-2 an account holding only cryptocurrency is not currently reportable on the FBAR).
• The foreign brokerage account at Interactive Brokers UK, Saxo Bank Denmark.

Aggregate test: not per-account. If you have €4,000 in a German account + €4,000 in a Spanish account + €3,000 in a French account = €11,000 ≈ $11,800. FBAR required.

Who needs Form 8938

Any specified person with foreign financial assets above the threshold. Specified person = individual US person (including dual-status alien), or certain US trusts/entities.

Thresholds depend on filing status + residence:

"Living abroad" = US citizen/resident who is bona fide resident of foreign country for entire year OR physically present 330+ days in foreign country.

Both can apply

It's common to owe both forms for the same accounts:

Example: US citizen living in Spain. Has €250K (~$275K) in Spanish savings + brokerage accounts.

• FBAR threshold $10K? Easily exceeded. Must file FBAR.
• Form 8938 threshold for single US person abroad = $200K end of year. Exceeded. Must file 8938.

Filing one doesn't excuse you from the other. Both must be filed.

Reverse situation: US person in the US with $40K in foreign accounts.

• FBAR threshold $10K? Yes. File FBAR.
• Form 8938 threshold for single US resident = $50K end of year / $75K any day. $40K < $50K. No Form 8938 required.

What FBAR covers that Form 8938 doesn't

• Signature authority without financial interest — Form 8938 only covers assets you own. FBAR covers accounts you can sign on even without ownership.
• Certain insurance policies — life insurance with cash value held abroad: FBAR yes, Form 8938 yes but rules differ.
• Foreign mutual fund accounts — FBAR yes (it's an account); Form 8938 yes (it's a specified asset).

What Form 8938 covers that FBAR doesn't

• Foreign stock or securities held outside a financial account — e.g., shares of a foreign private company held in your name. FBAR no (not an account); Form 8938 yes (specified foreign asset).
• Interest in a foreign partnership or trust — Form 8938 yes. FBAR no.
• Foreign-issued life insurance with cash value, even without an account custodian — Form 8938 yes.
• Foreign retirement accounts — Form 8938 yes (in most cases); FBAR yes (most foreign pensions are accounts).

Penalty stakes

FBAR

• Non-willful: up to $16,536 per report — per year, not per account (Bittner v. United States, 2023). The cap is FinCEN's inflation adjustment for penalties assessed on or after January 17, 2025 (31 CFR 1010.821).
• Willful: greater of $165,353 or 50% of the account balance — assessed per account, per year. Criminal prosecution possible (31 USC §5322).
• Several accounts in one year are one non-willful violation (one report). A willful penalty is assessed per account — up to 50% of each account's balance.

Form 8938

• Initial failure to file: $10,000.
• Continued failure after IRS notice: $10,000 per 30-day period (max additional $50,000).
• Reasonable cause can defeat the penalty if documented.

FBAR penalties are vastly higher than Form 8938 penalties. The IRS has more flexibility on 8938 abatement than on FBAR.

Checklist: who needs what

You need FBAR if:

• US person (citizen, GC holder, US resident, US entity)
• Any combination of foreign financial accounts aggregated above $10K at any moment in the year
• Including accounts you don't own but can sign on

You need Form 8938 if:

• Same person definition
• Specified foreign financial assets above the threshold for your status/residence
• Includes assets beyond accounts (stocks, private equity, partnership interests)

You typically need both if:

• US expat abroad with > $200K specified foreign financial assets
• US resident with > $50K specified foreign financial assets

You only need FBAR if:

• Low foreign asset balance ($10K-$50K range as US resident) — above FBAR threshold but below 8938

What to do if you've never filed either

Use the Streamlined Filing Compliance Procedures: catch up on 6 years of FBAR + 3 years of 8938 with the rest of your return amendments. Zero penalty under SFOP (if you live abroad) or 5% miscellaneous offshore penalty under SDOP (if you live in the US).

See separate article: Streamlined Filing Compliance Procedures.

Sources

• FinCEN — FBAR (Form 114) Guidance
• IRS — Form 8938 (FATCA)
• Form 8938 Instructions
• Comparison of Form 8938 and FBAR Requirements
• BSA E-Filing System for FBAR

*This article is general guidance for US persons with foreign accounts. Threshold determinations and asset categorization depend on your specific facts. For your situation, schedule via the contact form or email info@fintaxes.us.*