Nobody thinks of themselves as someone with "foreign financial accounts." They think of the checking account left over from three years in London, the joint account with a parent in Mumbai, the pension from a Toronto employer, the brokerage login from a semester abroad. The reporting rules see all of those. And the people I see tripped up by these forms are rarely hiding anything. They just never heard of the forms.
FBAR: the $10,000 tripwire
The FBAR (officially FinCEN Form 114) applies to U.S. persons whose foreign financial accounts totaled more than $10,000 combined at any moment in the calendar year. Combined is the operative word: three accounts holding $4,000 each for a single week puts you over the line for the year. The rule counts accounts you own, accounts you co-own, and accounts you merely hold signature authority over: a regular surprise for people who can sign on an overseas employer's account.
Two mechanics catch people. The FBAR doesn't attach to your tax return. It's filed separately, online, with FinCEN. And it's due April 15 with an automatic extension to October 15 that you don't have to request; plenty of on-time filers never knew they were "extended."
Form 8938: same idea, higher bar
Form 8938 does attach to your income tax return, and its thresholds sit high enough that many FBAR filers never touch it. It applies once your specified foreign financial assets exceed:
- $50,000 on the last day of the year, or $75,000 at any point during it, for unmarried filers (and married filing separately) living in the U.S.
- $100,000 / $150,000 for married filing jointly in the U.S.
- $200,000 / $300,000 single, and $400,000 / $600,000 joint, if you live abroad.
The two forms overlap without matching. Form 8938 reaches assets that aren't accounts at all (foreign stock held directly, an interest in a foreign partnership) while the FBAR reaches accounts you can sign on but don't own. Plenty of people owe both, and filing one never excuses the other. One asymmetry worth knowing: if you aren't required to file a tax return, the Form 8938 requirement falls away. The FBAR doesn't care.
The penalties are the whole story
Neither form adds a dollar of tax. They're information returns, and the entire risk lives in not filing. A non-willful FBAR miss carries a penalty starting at $10,000 per report in the statute, indexed for inflation (a bit over $16,500 for penalties assessed in 2025). The Supreme Court settled in 2023 that non-willful means per report, not per account. Willful violations are a different universe: the greater of roughly $165,000 (also indexed) or half the account balance, with criminal exposure possible. Form 8938 has its own ladder: $10,000, up to $50,000 more for ignoring IRS follow-ups, plus a 40% accuracy-related penalty on understatements tied to undisclosed assets.
Behind on either form? Don't quietly start filing "from now on" and hope. The IRS runs formal catch-up paths for non-willful cases (streamlined procedures that can sharply reduce or eliminate penalties), and picking the right path is a decision to make with a CPA before anything gets filed.
If your accounts abroad ever crossed $10,000 combined, even briefly, treat the FBAR as yours until the math says otherwise. The form takes an evening. The penalty conversation takes far longer, and I'd rather have the first one with you.
This article is general information, not tax, legal, or accounting advice, and reading it does not create a CPA-client relationship. Tax rules change and depend on your specific facts. Please consult a qualified professional about your situation before acting.