FATCA Form 8938 Explained for US Expats

Many US expats believe that filing FBAR alone is enough. Unfortunately, that assumption can lead to serious compliance issues.

FBAR and FATCA are separate reporting requirements, and many expats are required to file both.

What Is FATCA?

FATCA stands for the Foreign Account Tax Compliance Act.

Under FATCA, certain US taxpayers must file Form 8938 with their tax return to report specified foreign financial assets held outside the United States.

Who Must File Form 8938?

You may need to file Form 8938 if:

• You are a US citizen or green card holder

• You hold foreign financial assets above IRS thresholds

Thresholds depend on:

• Filing status

• Whether you live in the US or abroad

What Assets Must Be Reported?

Reportable assets may include:

• Foreign bank accounts

• Foreign investment accounts

• Foreign stocks held outside US institutions

• Interests in foreign entities

Not all foreign assets are reportable, which is why careful review matters.

FATCA vs FBAR: Key Differences

Although FATCA and FBAR overlap, they are enforced under different rules.

Key distinctions:

• FATCA is filed with your tax return

• FBAR is filed separately with FinCEN

• Reporting thresholds differ

• Penalties are assessed differently

FATCA Penalties

Failure to file Form 8938 can result in:

• $10,000 initial penalty

• Additional penalties for continued non-compliance

• Possible statute of limitations extensions

Common FATCA Filing Mistakes

Expats often make errors by:

• Assuming FBAR replaces FATCA

• Miscalculating asset values

• Omitting jointly held accounts

• Filing late without understanding correction options

Staying Compliant Without Overreporting

FATCA compliance should be accurate — not excessive.

If you're unsure whether your assets require reporting, or how FATCA fits into your broader US expat tax obligations, Exemplary can review your accounts and help you stay compliant without unnecessary exposure.