Form 8938 Threshold Calculator

Only if you cross a threshold, and there are two limbs. Living abroad and not filing jointly, you file when specified foreign financial assets exceed $200,000 on the last day of the tax year or $300,000 at any time during it. Filing jointly, the figures are $400,000 and $600,000. In the US the thresholds drop to $50,000 / $75,000 and $100,000 / $150,000. Breaching either limb triggers the requirement — you do not need to breach both.

$200,000 of specified foreign financial assets on the last day of the tax year, or more than $300,000 at any point during the year, for anyone filing other than a joint return. A joint return doubles both figures to $400,000 and $600,000. These are four times the domestic thresholds, which is why qualifying as living abroad is worth establishing carefully rather than assuming.

It is a defined test. You qualify if your tax home is in a foreign country and you were present in a foreign country or countries for at least 330 full days in a consecutive twelve-month period, or if you are a bona fide resident of a foreign country for an uninterrupted period covering an entire tax year. The 330-day route permits only 36 days in the US across the period, and a first partial year after moving frequently fails both routes.

Foreign financial accounts at foreign institutions, plus foreign non-account assets held for investment. For an American in the UK that typically means current and savings accounts, cash and stocks and shares ISAs, general investment accounts, UK funds and investment trusts, workplace pensions and SIPPs, private company shares, and LLP or partnership interests. Directly held foreign stock counts even without an account.

Accounts maintained by a US payor, including a US branch of a foreign bank and a foreign branch of a US institution. Interests in social security or similar government programmes, which is why the UK State Pension is excluded while a private workplace scheme is not. Personally held tangible assets are also outside the definition — a UK home owned directly, artwork, or gold in a safe deposit box. A home held through a company or trust is different, because the interest in that entity is itself reportable.

A private workplace pension or SIPP generally is, and its maximum value during the year counts towards the threshold. That is often the single largest item pushing an American in Britain over the limit, particularly after a few years of auto-enrolment contributions and market growth. The UK State Pension is generally excluded as an interest in a social security or similar government programme.

Report the maximum value of each asset during the year, converted to US dollars using the Treasury Reporting Rate of Exchange for the last day of the tax year — a single year-end rate applied to all values, not the rate on the day each balance peaked. Periodic account statements are sufficient evidence of maximum value. For assets without a readily determinable value, such as a private company interest, a reasonable year-end estimate is acceptable.

Yes, and it happens more often than people expect. Because conversion uses a single year-end rate, a year in which sterling strengthens against the dollar can breach the threshold with no change whatever in your actual holdings. A stable £280,000 portfolio sits below $400,000 at a rate of 1.40 and above it at 1.45. This is a real reason to run the test annually rather than assuming last year's answer still holds.

Different agencies, thresholds and scope. FBAR is FinCEN Form 114, filed with FinCEN through the BSA E-Filing System when foreign accounts exceed $10,000 in aggregate at any point, with no distinction between residents and expats. Form 8938 goes to the IRS attached to your Form 1040 at much higher thresholds and also covers non-account assets. Most Americans in the UK need both, and a UK pension is often reportable on each.

They are independent. Filing one does not satisfy the other, and the vast majority of Americans in the UK who file an FBAR are below the Form 8938 threshold, because $10,000 is a far lower bar than $200,000. Conversely, someone whose assets are mostly directly held foreign stock rather than accounts could need Form 8938 without needing an FBAR. Run both tests separately every year.

$10,000 initially, with further penalties of up to $50,000 for continued failure after IRS notification, plus a 40% accuracy-related penalty on any understatement of tax attributable to an undisclosed asset — double the ordinary 20% rate. Reasonable cause relief is available but must be established on specific facts, and a general lack of awareness of the requirement is rarely sufficient on its own.

Yes, and this is the more serious consequence. Failing to file keeps the assessment statute of limitations open for the entire return — not just for the foreign asset — until three years after the form is eventually filed. A separate six-year statute applies where more than $5,000 of income attributable to foreign financial assets is omitted from gross income. That is why correcting a missing form matters even where no tax was ever due.

It depends on whether income was also unreported. Where all income was properly reported and tax paid and only the information return was missed, the delinquent international information return procedures allow the late forms to be filed with a reasonable cause statement. Where income was unreported too, the Streamlined Foreign Offshore Procedures are usually the right vehicle — three years of returns, six years of FBARs, and a 0% penalty for those meeting the non-residency test.

If you file separately, you count your own assets — and where an account is jointly held with a non-US spouse, the full value is generally reported by the filing spouse rather than half of it, which catches people out. Filing jointly doubles the thresholds but requires an election that brings your non-American spouse's worldwide income permanently into the US tax net until revoked. That is a much larger decision than a reporting threshold should drive on its own.