FBAR vs. Form 8938 — Which One Applies to Me?

Another important difference is the type of assets reported.

Foreign bank accounts, fixed deposits and foreign brokerage accounts may need to be reported on both forms. Certain foreign investments held outside financial accounts, such as foreign stocks held directly, may be reportable on Form 8938 but not FBAR.

Directly owned foreign real estate is generally not reportable on either form. However, an interest in a foreign entity that owns real estate may create a separate Form 8938 reporting requirement.

It is best to prepare a list of all foreign accounts and assets, calculate their maximum values and check the reporting rules for each form.

For someone who qualifies as living abroad under the Form 8938 rules, the thresholds are generally:

• Unmarried or married filing separately: More than $200,000 on the last day of the tax year or more than $300,000 at any time during the year.
• Married filing jointly: More than $400,000 on the last day of the tax year or more than $600,000 at any time during the year.

These are Form 8938 thresholds, not FBAR thresholds. The FBAR threshold remains more than $10,000 in aggregate foreign financial accounts at any point during the calendar year.

Also, simply having a foreign address does not automatically qualify someone for the higher Form 8938 thresholds. The applicable foreign tax home and presence tests must be met.

The main difference is that FBAR and Form 8938 are separate reporting requirements with different thresholds and reporting rules.

FBAR is filed with FinCEN, not the IRS. It generally applies when the combined maximum value of your foreign financial accounts exceeds $10,000 at any point during the calendar year.

Form 8938 is attached to your U.S. federal income tax return. It covers specified foreign financial assets and has higher reporting thresholds, particularly for qualifying taxpayers who live outside the United States.

You may need to file both forms if you meet the requirements for each one. Filing one does not automatically satisfy the other.