Instructions for Filing Form 8938 Form 8938 can be daunting, but this article will give you everything you need to know about 8938 filing requirements. This guide will include topics such as Form 8938 filing requirements, Form 8938 instructions and Form 8938 vs FBAR. What are the basics of IRS Form 8938? As a tax advisor that owns real estate property investments in the UK and the United States, I know that Form 8938 filing requirements can seem complex. The IRS Form 8938 filing instructions can be found here. It is important to have the right advice when completing an 8938 Form. The IRS requires US taxpayers to report specified foreign financial assets each year on Form 8938. Officially called your Statement of Specified Foreign Financial Assets, Form 8938 is one of the forms that ex-pats use to tell the IRS about financial assets they hold abroad. When living and working abroad, it is common for Americans to gain different types of financial assets. These may include a foreign pension plan or shares of a foreign company. As a US taxpayer, these assets need to be declared annually and filing Form 8938 is a way of doing this. The IRS has increased offshore enforcement of foreign accounts compliance, including assets. When a US person has offshore assets, accounts, investments and income they may have different tax reporting requirements. There are several international information reporting forms, and the 8938 Form is one of the most common. If you are required to file Form 8938, you must report your financial accounts maintained by a foreign financial institution. Specified Foreign Financial Assets include assets located outside of the US, such as stocks, securities, investments, life insurance, partnerships and corporations and pensions. Not every ex-pat needs to fill out Form 8938. It depends on the types of assets you have and how much they are worth. The IRS impose significant fines for non-compliance. There is a difference between Form 8938 vs FBAR (FinCEN Form 114) which I will highlight later with additional Form 8938 instructions. I advise you to get the best advice possible when it comes to 8938 filing requirements. Are you paying more tax than you need to? I know from personal experience that IRS would take more money from me if I allowed them to. However, I am fortunate enough to have a bunch of tax advisors that support me in making the right financial and tax decision when dealing with my business and investment income streams. If you’re a US taxpayer who lives outside of the US and holds a total combined value of foreign assets worth over $300,000 at any time during the year you need to report it on Form 8938. If you’re filing a joint return, the thresholds are £600,000 at any time during the year. If you live in the US and have any qualifying assets (including any bank, investment and retirement accounts) maintained outside of the US, I recommend that you take note of when the tax year starts and ends. In the US, it is 1/1 to 12/31, but that’s not the case everywhere. If you fail to file Form 8938 when required to, the IRS can impose a fine of $10,000 and a penalty of up to $50,000 for continued failure. The IRS also states that underpayment of tax attributes to non-disclosed foreign financial assets will be subject to an additional underpayment penalty of 40%. It is therefore vital to fully understand Form 8938 filing requirements and to be fully aware of Form 8938 Form instructions. Form 8939 vs FBAR Unlike Form 8938, the FBAR (FinCEN Form 114) is not filed with the IRS. It must be filed directly with the Office of Financial Crimes Enforcement Network (FinCEN), separate from the IRS. Form 8938 filing requirements do not replace or affect a US taxpayer’s obligation to file FinCEN Form 114. You must check the requirements and relevant reporting thresholds of each form and determine if you need to file Form 8938, FinCEN Form 114, or both. Form 114 is required under the rules of the Foreign Account Tax Compliance Act (FATCA). FATCA prevents taxpayers from hiding their assets and income overseas to avoid US taxation. Form 8938 must be filed along with your income tax return (Form 1040) and is due simultaneously. Visit here to find out everything you need to know about FBAR. What you should do next It could be easy to read this article and do nothing about Form 8938 filing requirements. If the IRS notifies a taxpayer that they are delinquent, they will have 90 days to comply. In very rare circumstances, criminal penalties may also apply. I advise you to do yourself a favour and book in time with one of my expert tax advisors here.