FBAR vs. FATCA: Filing Requirements for Americans Abroad
7 min read
April 02, 2023
April 02, 2023
At a glance
Learn more about FBAR and FATCA filing requirements for U.S. expats from the tax experts at H&R Block.
What’s the difference between FATCA and the FBAR? If you’re unsure, you’re in the right place—the Foreign Bank Account Report (FBAR) and FATCA Form 8938 are two common and important forms you may have to file if you have money in foreign financial accounts. It’s crucial to understand what each one’s for and their filing requirements — filing one or both incorrectly or not filing when you’re supposed to can lead to some serious penalties.
Understanding each form is key to avoiding a problem with the IRS or the Financial Crimes Enforcement Network (FinCEN), so below we’ll dive into the FBAR and FATCA Form 8938 filing requirements for Americans abroad. If you’re still unsure which tax documents you need to file or if you haven’t filed taxes in a few years, it’s always best to trust these forms to an experienced advisor.
Need to file FinCEN Form 114 or FACTA Form 8938? Whether you want to file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.
FBAR vs. FATCA: Do you file FinCEN Form 114, Form 8938, or both? What’s the difference?
A common question Americans with assets in foreign bank accounts ask us is if they need to file an FBAR (the actual form you’d file is FinCEN Form 114) or FATCA Form 8938. The answer is: You could have to file one, none, or both. While they both exist to report financial assets to the government, they differ in a number of ways. For starters, they get sent to different places — you send your FBAR to the Financial Crimes Enforcement Network and send Form 8938 to the IRS.
We’ll dive more into the individual FBAR and FATCA filing requirements below, but here’s the quick who-what-where-when comparing the two:
|FATCA Form 8938||FBAR (FinCEN Form 114)|
|Who files||U.S. citizens and certain U.S. corporations, trusts, and partnerships who also fall in the following thresholds:Citizens living in the U.S.:Unmarried individual (or married filing separately) with assets valued at more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.Married individual filing jointly with assets valued at more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.|
Citizens living outside the US:Unmarried individual (or married filing separately) with assets valued at more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.Married individual filing jointly with assets valued at more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.
Other specified domestic entities:Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the tax year.
|U.S. citizens, resident aliens, trusts, estates, and domestic entities whose assets in reportable foreign financial accounts exceed a total of $10,000 at any time during the calendar year.|
|Where it gets filed||With your yearly IRS tax return||With FinCEN, the Financial Crimes and Enforcement Network of the U.S. Treasury Department|
|Filing deadline||By the filer’s U.S. income tax return due date.||By the filer’s U.S. income tax return due date (automatic extension to Oct 15 in prior years)|
|Penalties for failing to file||You’re fined up to $10,000 for failure to disclose and then another $10,000 every 30 days after the IRS notifies you of a failure to file. While the maximum fine is a penalty of $50,000 the IRS may also apply criminal penalties.||$10,000 for each failure to file; if the IRS determines that the failure was willful, that fine goes up to the greater of $100,000 or 50% of account balances. Criminal penalties may also apply.|
FATCA filing requirements
The Foreign Account Tax Compliance Act (FATCA) is a part of the government’s efforts to combat offshore tax evasion. American expats of all income levels with foreign accounts and assets should know about it. FATCA requirements impact U.S taxpayers and overseas financial institutions:
- U.S. taxpayers with foreign accounts and assets may need to file Form 8938: Statement of Specified Foreign Financial Assets with their annual U.S. Income Tax Return
- FATCA reporting requirements for financial institutions overseas mandates them to disclose information about U.S. citizens who hold accounts overseas
Form 8938 is similar to the FBAR in many ways. However, it has higher reporting thresholds and requires you to disclose certain “non-account” assets such as:
- Business and trust ownership
- Certain contractual investments with foreign parties
FATCA reporting deadline
As Form 8938 is filed with your U.S. income tax return, due dates applicable to Form 1040 apply. Automatic extensions for expats living abroad or additional extensions to October 15 can provide more time to collect needed information from foreign financial institutions and determine your filing requirements.
You can always see up-to-date FATCA declaration deadlines on our expat tax deadlines page.
Who files? FATCA Form 8938 filing thresholds
Who is subject to FATCA reporting? The filing thresholds differ depending on where you lived during the tax year.
If you live within the U.S. the entire tax year, you must file Form 8938 if the value of your reportable foreign assets exceeds either of these levels:
- More than $50,000 (or $100,000 if married filing jointly) at the end of the year, or
- More than $75,000 (or $150,000 if married filing jointly) at any time in the year
Expats living abroad have an increased reporting threshold. You don’t need to complete this form unless your foreign assets exceed either:
- $200,000 (or $400,000 if married filing jointly) at the end of the year, or
- $300,000 (or $600,000 if married filing jointly) at any time during the year
FATCA financial institution reporting
Many foreign financial institutions must report their U.S. citizen and resident clients’ accounts and if you’re an expat who hasn’t been filing FATCA information, that could affect you as you might face penalties and interest.
Ready to file FACTA Form 8938? Whether you file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.
FBAR filing requirements
The Report of Foreign Bank and Financial Accounts, or “FBAR” serves many of the same purposes Form 8938 does, with a few differences. A main one is that the FBAR goes to the Financial Crimes and Enforcement Network of the U.S. Treasury Department instead of the IRS. The FBAR came into existence in the Bank Secrecy Act of 1970 (BSA). Its purpose was, and still is, to prevent U.S. citizens from hiding assets overseas with the intent to commit tax evasion and money laundering.
By law, you must file FinCEN Form 114 if both of the following are true:
- You’re a U.S. citizen, resident taxpayer or domestic business entity
- You own, control, or have signature authority over foreign bank and financial accounts with a combined value over $10,000
If you were thinking of writing it off or ignoring your reporting obligation, beware: The penalties for willfully not filing can be $100,000 or more.
FBAR filing deadline 2023
The FBAR is filed separately from your tax return and does not go to the IRS. The FBAR deadline is the same as your income tax deadline, with an automatic extension to October 15 available.
You can always see up-to-date FBAR reporting deadlines on our expat tax deadlines page.
Who files? FinCEN Form 114 filing thresholds
You may be required to file an FBAR if you’re A U.S. citizen or green card holder using personal or business foreign accounts for everyday activities
The reporting requirement covers many types of foreign accounts maintained outside of the United States, including:
- Bank accounts
- Securities accounts
- Certain foreign retirement arrangements
The FBAR filing requirement isn’t new, but expats often overlook it. Recent international enforcement efforts have raised awareness of the requirement. Don’t worry, though — your FBAR is only an informational document. No additional tax will be added. However, penalties can be levied if you don’t file or file late.
Need to file FinCEN Form 114 (FBAR)? H&R Block makes it simple to file your U.S. taxes and FBAR together.
Not sure if you should file FBAR vs. FATCA Form 8938? The experts at H&R Block are here to help.
Confused whether you should file an FBAR, FATCA declaration, or both? Don’t go it alone — your H&R Block tax advisor will know exactly what to do with your specific situation. Ready to file?
Get started with H&R Block’s Expat Tax Services today.
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