What Are the Threshold Reporting Requirements for Form 8938

Form 8938 Threshold Filing and Reporting Requirements

Form 8938 Threshold Reporting Requirements

Oftentimes, taxpayers get overwhelmed (understandably so) when they learn that their ownership in foreign assets results in them having one or more international reporting requirement(s) to the IRS. Unfortunately, all the taxpayer has to do is a cursory Google search for the term FBAR, and land on the wrong fear-mongering page before they are coaxed into believing that they will be going to prison forever, and paying millions of dollars in fines for first-time noncompliance offenses. Many taxpayers become so focused on the FBAR, that they do not realize that there is another equally as important form that must be filed — Form 8938 or FATCA form 8938.

It is very important to note that these two forms are not mutually exclusive.  In any given year, a taxpayer may have to file one or both forms — or neither. But, just because a taxpayer has to file one form does not mean that they do not have to file the other form, or that they automatically have to file the other.

What are the Form 8938 Threshold Reporting Requirements

With the FBAR, a U.S. person has to file the form in any year that they have more than $10,000 in annual aggregate total in their foreign accounts. Conversely, when it comes to filing Form 8938 there are multiple different filing requirements and thresholds depending on whether the person qualifies as a U.S. resident or foreign resident  — and whether or not they file single or separate versus married filing joint.

Different Form 8938 Threshold Filing Requirements

Here are the different threshold filing requirements for Form 8938:

Threshold for Unmarried U.S. Resident

• • • For an unmarried US resident, taxpayers file Form 8938 in any year that the total value on the last day of the year exceeded $50,000, or if they have less than $50,000 on the last day of the year — but have more than $75,000 on any other day of the year.

Threshold for Married Filing Joint U.S. Resident

• • • For married US residents filing jointly, taxpayers file Form 8938 in any year that the total value on the last day of the year exceeded $100,000, or if they have less than $100,000 on the last day of the year — but have more than $150,000 on any other day of the year.

Threshold for Married Filing Separate US Resident

• • • For married US residents filing separately, taxpayers file Form 8938 in any year that the total value on the last day of the year exceeded $50,000, or if they have less than $50,000 on the last day of the year — but have more than $75,000 on any other day of the year.

Threshold for Single Foreign Resident

• • • For an unmarried foreign resident, taxpayers file Form 8938 in any year that the total value on the last day of the year exceeded $200,000, or if they have less than $200,000 on the last day of the year — but have more than $300,000 on any other day of the year.

Threshold for Married Filing Joint Foreign Resident

• • • For married foreign residents filing jointly, taxpayers file Form 8938 in any year that the total value on the last day of the year exceeded $400,000, or if they have less than $400,000 on the last day of the year — but have more than $600,000 on any other day of the year.

Threshold for Married Filing Separate Foreign Resident

• • • For married foreign residents filing separately, they file Form 8938 in any year that the total value on the last day of the year exceeded $200,000, or if they have less than $200,000 on the last day of the year — but have more than $300,000 on any other day of the year.

Dual-Status Taxpayers

• • • When a person makes an election to be treated as a dual-status taxpayer in a tax year, they may have to file the 8938 to reflect the portion of the year they were treated as a US resident. Exceptions, exclusions, or limitations may apply.

    • This is different than the exception for filing the FBAR and being treated as a resident under 6013(g).

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experiencedinternationaltax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.