Form 8938 is a form that becomes a component of your yearly tax return when the year end or maximum value of your foreign assets and accounts exceed specific thresholds. U.S. citizens, residents, and green card holders file form 1040 each year, and affixed to that 1040 is the variety of schedules and forms required to accurately report all of your taxable income, deductible expenses, and miscellaneous information that the U.S. government has decided the IRS needs annually. Form 8938 is one of these miscellaneous information forms, and like many of these types of forms, comes with a 10,000 USD failure to file penalty. As form 8938 is a part of your annual tax return, if you are not required to file a tax return because you are below the applicable income thresholds, you are also not required to file form 8938.
Form 8938 is often referred to as the FATCA form and it’s official title is Statement of Specified Foreign Financial Assets. The definition of specified foreign assets is significantly more broad than the definition of foreign bank and financial accounts. Form 8938 requires disclosure of all of your bank accounts, time deposits, investment accounts, life insurance policies, and retirement accounts but also includes disclosure of your interests in foreign corporations, disregarded entities, partnerships, and trusts. - see this article for an overview of the types of accounts requiring account or asset reporting (future article coming soon).
Form 8938 has several different thresholds based on your filing status and your residency status. There are also separate thresholds for your maximum balances and your year end balances and if you are over either of these thresholds, you must file form 8938.
If you file married filing jointly and you live in the U.S., the applicable 8938 thresholds are: aggregate maximum balance of all of your accounts of over 150,000 USD, or aggregate end of year balances of over 100,000 USD.
If you file single, married filing separately, head of household, or qualifying widower and live in the U.S. the applicable 8938 thresholds are: aggregate maximum balance of all of your accounts of over 75,000 USD, or aggregate end of year balances of over 50,000 USD.
If you file married filing jointly and you live outside of the U.S. the applicable 8938 thresholds are: aggregate maximum balance of all of your accounts of over 600,000 USD, or aggregate end of you balances of over 400,000 USD.
If you file single, married filing separately, head of household, or qualifying widower and live outside of the U.S. the applicable 8938 thresholds are: aggregate maximum balance of all of your accounts of over 200,000 USD, or aggregate end of year balances of over 300,000 USD.
In addition to including the values of all of your bank and financial accounts, these thresholds also DO INCLUDE the value of any interest you have in a foreign corporation, foreign partnership, foreign disregarded entity (i.e. foreign LLC), and foreign trust. These thresholds would not include the value of any directly held foreign assets like cars, properties (including rental properties), artwork, and commodities (i.e. gold and silver).