Form 8938 (FATCA) Filing Requirements - Questions About Foreign Accounts
I'm really confused about this whole FATCA situation and Form 8938. My parents helped me set up some investment accounts in their home country about 5 years ago, and I just realized I might need to report them. The accounts are probably worth around $75,000 combined, but honestly I've been kind of ignoring them since they were set up. Do I absolutely have to file Form 8938? What happens if I haven't reported these accounts for the past few years? I'm freaking out a little because I've heard the penalties can be insane. Also, is this different from the FBAR thing? I'm seeing both mentioned when I search online and I can't figure out if I need to file both or just one of them. I've been filing my taxes myself using TurboTax, but I don't remember seeing anything about foreign accounts in there. Any help is appreciated... really don't want to get in trouble with the IRS!
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Emma Wilson
Yes, based on what you've described, you likely need to file Form 8938 (FATCA) as well as the FBAR (FinCEN Form 114). These are two separate requirements with different thresholds and filing methods. For Form 8938, if you're single and living in the US, the filing threshold is $50,000 on the last day of the tax year or $75,000 at any time during the year. Since your accounts are worth around $75,000, you likely meet this threshold. The 8938 is filed with your tax return. For the FBAR, the threshold is $10,000 across all foreign accounts at any time during the year. This is filed separately from your tax return through the FinCEN BSA filing system online. As for not filing in previous years, you should look into the Streamlined Filing Compliance Procedures, which is an IRS program specifically designed for people who non-willfully failed to report foreign accounts. It allows you to come into compliance while potentially avoiding the harshest penalties.
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Malik Thomas
•Does TurboTax even handle the Form 8938 filing? And what exactly counts as a "foreign financial asset"? I have a pension from when I worked in Canada for a few years - do I need to report that too?
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Emma Wilson
•Yes, TurboTax can handle Form 8938, but you need to make sure you answer the questions about foreign accounts correctly when going through the interview process. Some people miss these questions or don't realize they apply to their situation. Foreign financial assets include a wide range of investments including bank accounts, brokerage accounts, mutual funds, and yes, foreign pensions would typically need to be reported on Form 8938 if you meet the threshold requirements. The pension from your work in Canada would generally be considered a reportable foreign financial asset.
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Isabella Oliveira
I went through something similar last year with overseas accounts my grandparents set up. After tons of research and stress, I found this service called taxr.ai (https://taxr.ai) that really helped me figure out my FATCA and FBAR requirements. Their system analyzed all my foreign account statements and automatically identified what needed to be reported where. The most helpful thing was that they could tell me exactly which accounts met the Form 8938 requirements versus just the FBAR requirements. They also helped me understand how to value certain types of foreign investments that don't have direct US equivalents. Might be worth checking out if you're confused about what exactly you need to report.
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Ravi Kapoor
•How does it work with old returns? I'm in a similar situation where I haven't reported some accounts for like 3 years. Can this service help with amending previous returns or just current year stuff?
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Freya Larsen
•I'm skeptical about these tax services that claim to handle international stuff. How do they handle the privacy aspects? I don't love the idea of uploading my foreign bank statements to some random website.
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Isabella Oliveira
•They can definitely help with past years. Their system specifically has options for the Streamlined Filing Procedures I mentioned, which is designed for catching up on unreported foreign accounts from previous years. You can upload statements from multiple years and they'll identify what should have been reported when. Regarding privacy concerns, their system uses bank-level encryption for all document uploads. I was hesitant at first too, but they don't actually store your bank credentials - you just upload PDF statements. They have a whole section about their security practices on their site if you're concerned.
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Freya Larsen
Ok I need to follow up on my skeptical comment about taxr.ai. I decided to try it after continuing to struggle with my FATCA situation and wow, it actually worked really well. The system analyzed my German investment accounts and clearly showed me which ones needed Form 8938 reporting vs FBAR reporting. The most helpful thing was that it identified some specific investments that qualified for special treatment under the tax treaty. I would have completely missed that. It also walked me through the Streamlined Filing procedures so I could catch up on my previous unfiled years without facing the massive penalties. Saved me thousands potentially.
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GalacticGladiator
If you're having trouble getting answers from the IRS about your FATCA situation, try Claimyr (https://claimyr.com). I was trying for WEEKS to get through to someone at the IRS who actually understood international reporting requirements. Their regular customer service people just kept transferring me around without answering my Form 8938 questions. I found Claimyr through a YouTube video (https://youtu.be/_kiP6q8DX5c) and was connected to an actual IRS agent within 15 minutes. The agent was able to confirm exactly which accounts needed to be on my 8938 vs my FBAR, and explained the difference between the various thresholds for married vs single filers. They also told me the exact procedure for correcting my previous returns.
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Omar Zaki
•Wait, how does this actually work? Do they just call the IRS for you? Couldn't you just call yourself? I'm confused about what service they're actually providing.
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Freya Larsen
•Sorry, but this sounds like BS. Everyone knows it's impossible to get through to the IRS, especially for complicated international tax questions. I waited on hold for 3 hours last month and when I finally got someone, they had no idea how to answer my FATCA questions. I seriously doubt this service can magically get you through.
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GalacticGladiator
•They use a system that navigates the IRS phone tree and waits on hold for you. When an agent actually picks up, you get a call letting you know an agent is on the line. So you don't have to waste hours listening to hold music. It saves a ton of time. I was skeptical too, but when you consider how much time you waste trying to get through yourself, it makes sense. The difference is they have technology that can stay on hold indefinitely while you go about your day. And yes, they connected me with an agent who actually knew about international reporting requirements, though I think that was just luck of the draw.
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Freya Larsen
I have to eat my words about Claimyr. After more frustration trying to get answers about my Form 8938 requirements, I decided to try it yesterday. It actually worked! I got a call back in about 45 minutes saying they had an IRS agent on the line. The agent confirmed that I needed to file both Form 8938 and FBAR for my accounts, and explained that since I'm married filing jointly, my FATCA threshold is actually $100,000 on the last day of the year or $150,000 at any point during the year. This was super helpful since I was using the single filer threshold incorrectly. The agent also explained the reasonable cause exception for penalties, which might apply in my situation since I genuinely didn't understand the requirements. Definitely worth using the service instead of wasting an entire afternoon on hold.
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Chloe Taylor
Don't forget that Form 8938 thresholds are different if you're living abroad! If you qualify as an expat (physical presence test or bona fide residence test), the thresholds are much higher - $200,000 on the last day of the year or $300,000 at any time during the year for single filers. I made the mistake of filing unnecessary 8938 forms for two years before a tax preparer pointed this out to me. Wasted a bunch of time gathering all that information when I was well below the applicable threshold as an expat.
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Javier Gomez
•Does this mean I might not need to file if I was living outside the US for part of the year? I was actually working in Asia for about 4 months last year on a project. How does that affect my filing requirements?
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Chloe Taylor
•You would need to qualify as a foreign resident under either the physical presence test (330 days outside the US in a 12-month period) or the bona fide residence test (established residence in a foreign country for an entire tax year). Based on what you described - just 4 months abroad - you wouldn't qualify for the higher foreign resident thresholds. You'd still use the standard domestic thresholds ($50,000 on last day/$75,000 any time for single). The higher thresholds are really designed for Americans who are living abroad permanently or for extended periods.
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Diego Flores
Anyone else getting conflicting info from different IRS publications about what actually needs to be reported on Form 8938? Pub 54 seems to contradict Form 8938 instructions about certain types of assets... 🤯
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Anastasia Ivanova
•The most reliable source is the actual Form 8938 instructions document from irs.gov. Publication 54 is more general for Americans abroad. The specific rules for what counts as a "specified foreign financial asset" are detailed in the 8938 instructions. Generally includes: - Financial accounts at foreign financial institutions - Foreign stock or securities not held in a financial account - Interest in a foreign entity - Financial instrument with a foreign issuer or counterparty
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