FBAR and FATCA: What Every Expat Must Report

Introduction

US citizens living abroad face two separate foreign financial reporting requirements: FBAR (Report of Foreign Bank and Financial Accounts) filed with FinCEN, and FATCA Form 8938 filed with the IRS. Despite some overlap, these serve different purposes and have different thresholds.

Non-compliance carries severe penalties. Non-willful FBAR violations can reach $16,536 per account per year (2025). Willful violations can reach $165,366 or 50% of account balance.

FBAR (FinCEN Form 114)

Who Must File

• You are a US person (citizen, resident alien, or entity)
• You had a financial interest in or signature authority over foreign financial accounts
• The aggregate value of all foreign accounts exceeded $10,000 at any time during the calendar year

What Counts as Foreign Account

• Bank accounts (checking, savings)
• Brokerage accounts
• Mutual funds
• Life insurance with cash value
• Pension accounts
• Accounts at foreign financial institutions

**Wise, Revolut, N26:** These may count as foreign accounts depending on where your specific account is held. Wise accounts held in the UK are reportable; check account location for others.

$10,000 Threshold

The threshold is aggregate across ALL accounts.

• UK bank: $6,000
• German investment: $3,000
• Wise UK: $2,000
• Total: $11,000 → FBAR required

The threshold applies to the highest balance at any point during the year, not year-end balance.

How to File

1. File electronically at FinCEN BSA E-Filing
2. No fee
3. Deadline: April 15 (automatic extension to October 15)
4. Keep records for 5 years

Information Required

• Account number
• Maximum value during year
• Type of account
• Name and address of foreign institution
• Your relationship to account (owner, signatory)

FATCA Form 8938

Who Must File

Thresholds differ for US residents vs. expats:

• Single: $200,000 year-end OR $300,000 at any time
• Married Filing Jointly: $400,000 year-end OR $600,000 at any time

• Single: $50,000 year-end OR $75,000 at any time
• Married Filing Jointly: $100,000 year-end OR $150,000 at any time

What's Reportable

Form 8938 has broader scope than FBAR:

• Foreign financial accounts (like FBAR)
• Stock or securities issued by foreign entity
• Interest in foreign entity (partnership, corporation)
• Foreign-issued life insurance or annuity
• Foreign pension accounts
• Foreign hedge funds and private equity

• Foreign real estate held directly (not through entity)
• Foreign currency held directly
• Precious metals held directly

How to File

1. Attach Form 8938 to your annual Form 1040
2. File by tax deadline (June 15 for expats, or October 15 with extension)
3. Cannot file separately like FBAR

FBAR vs. FATCA Comparison

| Feature | FBAR | FATCA Form 8938 | |---------|------|-----------------| | Filed With | FinCEN | IRS | | Threshold (expats) | $10,000 | $200,000/$400,000 | | Filing Method | Electronic (separate) | With Form 1040 | | Deadline | April 15 (auto ext. Oct 15) | Tax return deadline | | Real Estate | Not reportable | Not reportable (direct) | | Stock in Foreign Corp | Reportable | Reportable | | Penalty (non-willful) | $16,536/account/year | $10,000-$60,000 |

**Key Point:** If you meet FATCA thresholds, you almost certainly meet FBAR thresholds. File both.

Penalties

FBAR Penalties (2025)

• **Non-willful:** Up to $16,536 per violation
• **Willful:** Greater of $165,366 or 50% of account balance
• **Criminal:** Up to $500,000 and/or 10 years imprisonment

FATCA Penalties

• **Failure to file:** $10,000 per year
• **Continued failure:** Additional $10,000/month (up to $60,000)
• **Fraudulent failure:** $50,000

Penalty Mitigation

• Reasonable cause for failure
• No unreported income from accounts
• Voluntary disclosure before IRS contact

Catching Up: Streamlined Procedures

If you haven't been filing, the IRS offers programs to come into compliance:

Streamlined Foreign Offshore Procedures

• Non-willful failure to report
• Living outside US for 330+ days in any of last 3 years
• No IRS examination pending

• File 3 years of delinquent tax returns
• File 6 years of delinquent FBARs
• Pay tax and interest due
• Sign certification of non-willful conduct

**Penalty:** None (for those qualifying as abroad)

Delinquent FBAR Submission Procedures

• File late FBARs with explanation
• No penalty if properly reported income and paid tax
• Must not be under examination

Key Takeaways

• FBAR required if foreign accounts exceed $10,000 total at any point
• FATCA Form 8938 has higher thresholds: $200,000 year-end for expats
• File FBAR separately at FinCEN; file 8938 with tax return
• Penalties for non-compliance are severe: up to $165,366 for willful FBAR violations
• Streamlined procedures available for catching up without penalties

Next Steps

1. Inventory all foreign accounts (including Wise, Revolut, etc.)
2. Determine maximum balance for each during the year
3. Check if you meet FBAR threshold ($10,000 aggregate)
4. Check if you meet FATCA threshold ($200,000/$400,000 for expats)
5. File electronically at FinCEN BSA E-Filing by deadline
6. If behind on filings, consider Streamlined Foreign Offshore Procedures