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If you hold, or have signature authority over, any foreign financial account, you may be required to report it to the U.S. Department of the Treasury every year.
Under the Bank Secrecy Act, each U.S. person must file a Foreign Bank Accounts Report — FinCEN Form 114 — if the combined total of their foreign financial accounts reaches $10,000 at any point in the calendar year. Checking and savings accounts, mutual funds, brokerage accounts and unit trusts all count.
Form 114 is a requirement for every U.S. citizen and resident with foreign accounts. Failing to file it can bring substantial financial penalties and, in some cases, criminal prosecution.
Form 8938 is separate, and is filed with your U.S. tax return rather than with FinCEN. For it, "foreign assets" reaches past bank accounts: private equity and foreign hedge funds, foreign stock, partnership interests and any other income-producing asset, with all gains and losses reported.
The Form 8938 thresholds
- Living in the U.S., filing single — $50,000 in foreign assets on the last day of the year, or $75,000 at any point during it.
- Living in the U.S., filing jointly — $100,000 at the end of the year, or $150,000 at any point during it.
- Living abroad, filing single — $200,000 on the last day of the year, or $300,000 at any point during it.
- Living abroad, filing jointly — $400,000 at the end of the year, or $600,000 at any point during it.
Meeting a Form 8938 threshold does not remove the Form 114 obligation. The two are filed separately, to different agencies, and most people who owe one owe both.