Form 8938 is an informational IRS tax form that was created as part of the Foreign Account Tax Compliance Act (FATCA), which was passed into law in 2010. The purpose of the form is to alert the IRS that an individual has received certain types of foreign assets.
US persons who own foreign financial assets valued above certain thresholds must file this form to report those assets. Common examples of foreign financial assets include:
- Foreign bank accounts
- Foreign brokerage accounts
- Foreign financial instruments
- Foreign-issued life insurance
- Foreign annuity contracts with cash value
- Shares in foreign hedge funds and private equity funds
This form is required under the rules of the Foreign Account Tax Compliance Act (FATCA). FATCA is designed to prevent taxpayers from hiding their assets and income overseas to avoid taxation.
Who Has to File this Form?
The threshold for filing Form 8938 depends on your residency and filing status.
- For US persons living in the US, the thresholds for filing are:
- Single or Married Filing Separately: You must file Form 8938 if the total value of your foreign assets is greater than $50,000 on the last day of the tax year or more than $75,000 at any point during the year.
- Married Filing Jointly: You must file Form 8938 if the total value of the foreign assets you and your spouse own is greater than $100,000 on the last day of the tax year or more than $150,000 at any point during the year.
- For US persons living outside of the US, the thresholds for filing are:
- Single or Married Filing Separately: You must file Form 8938 if the total value of your foreign assets is greater than $200,000 on the last day of the tax year or more than $300,000 at any point during the year.
- Married Filing Jointly: You must file if the total value of the foreign assets you and your spouse own is greater than $400,000 on the last day of the tax year or more than $600,000 at any point during the year.