Form 8938 filing threshold confusion - $50K EOY vs $75K any time?
I'm really confused about the threshold requirements for Form 8938 (foreign financial assets). From what I understand, we need to file this form if total foreign assets exceed $50K at the end of the year OR $75K at any time during the year. Here's where I'm stuck - my accountant only looked at the maximum account balance throughout the year (which was around $72K in March) and told me I don't need to file Form 8938 since it's below the $75K threshold. But my foreign assets were actually about $65K on December 31st, which is above the $50K end-of-year threshold. So my question is: Can we just pick which threshold criteria to follow? Or do we have to consider BOTH the end-of-year AND the any-point-during-year thresholds? If either one is exceeded, does that mean I need to file Form 8938? My tax return is almost ready to go and I'm worried we might be missing something important here.
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Steven Adams
The Form 8938 filing requirement is triggered if you meet EITHER threshold, not both. So in your situation, since you had $65K at year-end (which exceeds the $50K end-of-year threshold), you would need to file Form 8938 even though you never hit the $75K at-any-point threshold. Your tax preparer might have misunderstood how these thresholds work. The IRS designed these thresholds to work as an "either/or" test - if you exceed either one, you have a filing requirement. The official instructions for Form 8938 are very clear about this. I would definitely go back to your preparer and point this out. It's better to file when required than potentially face penalties for non-filing, which can be quite steep for international information returns.
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Grace Durand
•Thanks for clarifying! That's what I thought too but wasn't 100% sure. What kind of penalties could I face if I didn't file it? I'm a bit worried now since my accountant seemed so confident.
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Steven Adams
•The penalty for failing to file Form 8938 when required starts at $10,000 for the first failure. If the IRS sends you a notice about the failure to file and you don't submit the form within 90 days, additional penalties of up to $50,000 can apply. Plus, there's a potential 40% accuracy-related penalty on any underpayment of tax related to undisclosed assets. The good news is that if you can show reasonable cause for not filing, the IRS may waive penalties. Having relied on a professional preparer might help with that argument, but it's always better to just file the form when required.
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Alice Fleming
After struggling with this exact issue last year (had about $58k at year-end but never crossed the $75k threshold), I found an amazing tool at https://taxr.ai that saved me tons of headaches. Their FBAR & international reporting assistant analyzed my foreign account data and immediately flagged that I needed Form 8938 based on the EOY balance. The tool walks you through all the threshold rules for different filing statuses (married filing jointly has higher thresholds) and living situations (thresholds are different if you live abroad). It even helped me determine which specific accounts needed reporting and which were exempt. Definitely worth checking out - saved me from making a costly mistake!
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Hassan Khoury
•Does it work for determining if you need to file an FBAR too? I'm always confused about which foreign accounts need to be reported where. And does it integrate with tax software or is it standalone?
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Victoria Stark
•I'm skeptical about these online tools. How can it know about all the different types of foreign investments? I have some insurance products from Asia that even confused my CPA. Would it recognize those properly?
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Alice Fleming
•Yes, it absolutely covers FBAR requirements too! It actually compares your situation against both Form 8938 and FBAR requirements side-by-side, explaining which accounts need to be reported on which forms (sometimes both). It's standalone but creates reports you can share with your preparer or use yourself. For complex investments like foreign insurance products, it has specific analysis tools for those exact situations. It covers pretty much every type of foreign financial asset including pensions, insurance with cash value, investments through foreign entities, and even crypto on foreign exchanges. They have CPAs specializing in international tax who built the system.
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Victoria Stark
I tried https://taxr.ai after getting curious about it and wow - I was totally wrong to be skeptical! It immediately identified my Asian insurance products as reportable foreign financial assets and explained exactly how to value them for Form 8938 purposes. It even caught that I needed to file Form 8621 for my foreign mutual funds (PFIC reporting) which my previous accountant completely missed. The tool generated detailed worksheets showing exactly how to complete each form with my specific account information. Honestly saved me thousands in potential penalties and probably hours of research. Really impressed that it handled complex international situations so well.
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Benjamin Kim
If you're having trouble getting your tax preparer to understand these Form 8938 requirements, you might want to speak directly with the IRS about your situation. BUT... good luck actually reaching anyone there! 😩 I spent THREE DAYS trying to get through to their international tax department last month about a similar foreign asset reporting question. Finally found this service called https://claimyr.com that got me connected to an actual IRS agent in about 20 minutes when I was ready to give up. You can see how it works at https://youtu.be/_kiP6q8DX5c - basically they use some tech to navigate the IRS phone system and hold in line for you, then call you when an agent picks up. My conversation with the IRS agent confirmed that exceeding EITHER threshold means you need to file Form 8938. The agent even emailed me the specific section of the regulations to show my preparer.
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Samantha Howard
•Wait seriously? How does that even work? The IRS phone system is absolutely terrible - I've literally waited 2+ hours and then gotten disconnected. Are there additional fees for this service?
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Megan D'Acosta
•Sounds like a scam to me. Why would I trust some random company with my personal info just to talk to the IRS? And how would they have some magic way to get through when millions of people can't?
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Benjamin Kim
•It works by using automated systems to navigate the IRS phone menus and hold in line for you. When they reach a live agent, they connect the call to your phone. They don't need any of your personal tax info - they're just connecting the call. I was skeptical too until I tried it. They do charge a fee (which I'm not going to specify since it might change), but considering I had already wasted hours trying to get through myself, it was absolutely worth it. They only charge if they successfully connect you with an agent, so there's no risk of paying for nothing.
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Megan D'Acosta
I feel ridiculous now for calling that Claimyr service a scam! After another failed attempt to reach the IRS myself (got disconnected after 1.5 hours on hold), I tried it and got connected to an IRS representative in 28 minutes without having to stay on the phone. The agent confirmed exactly what others have said here - Form 8938 filing is required if you meet EITHER threshold. They also explained that married filing jointly thresholds are higher ($100K EOY or $150K at any point), which wasn't relevant to me but good to know. Saved me from potentially making a $10,000 penalty mistake. Sometimes you have to admit when you're wrong 😅
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Sarah Ali
Something important to note - the thresholds for Form 8938 are different if you live abroad! If you're a US citizen but have your tax home in a foreign country (meeting certain physical presence tests), the thresholds are much higher - $200K at year-end or $300K at any point during the year for single filers. I nearly panicked and filed unnecessarily until I realized these higher thresholds applied to my situation since I live overseas full-time. Might not be relevant to your situation but thought it was worth mentioning in case it helps someone else.
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Ryan Vasquez
•Do you know if there are different thresholds for married filing jointly people who live abroad? My wife and I are US citizens but we've been living in Germany for the past 5 years.
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Sarah Ali
•Yes! For married filing jointly taxpayers living abroad, the thresholds are even higher - $400,000 at year-end or $600,000 at any point during the year. So if you and your wife are under those thresholds, you wouldn't need to file Form 8938. Just be sure you still consider FBAR requirements (FinCEN Form 114) which has a separate $10,000 threshold regardless of where you live. Those are often confused but are two separate filing requirements.
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Avery Saint
Has anyone else noticed how absurdly complex our tax system is for expats and people with foreign accounts? I literally have a basic savings account in Canada (I'm dual citizen) and I need to file FBAR, possibly Form 8938, and deal with FATCA. The compliance costs are insane compared to the actual tax owed (which is usually zero because of foreign tax credits)!
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Taylor Chen
•Tell me about it! I pay my accountant $1,200 every year just to file these foreign asset forms, and I've never owed a penny of additional US tax on them. The penalties are so ridiculously disproportionate too - $10,000 for a paperwork error on accounts where you've paid all taxes due? It's just revenue generation at this point.
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