- 1 FBAR vs Form 8938
- 2 Differences Between the Form 8938 & FBAR
- 3 Only File 8938 is you have to File a Tax Return
- 4 Is Filed with the IRS
- 5 It is not on Automatic Extension
- 6 Higher Threshold than the FBAR
- 7 US vs Foreign Resident Filing Requirements
- 8 The 8938 Form Includes Different Accounts/Assets than the FBAR
- 9 Golding & Golding: About Our Tax Law Firm
FBAR vs Form 8938
Comparing Form 8938 & FBAR Requirements: In the next few months, the IRS will open the 2020 taxes. For U.S. Person taxpayers who have foreign accounts or assets, what are the most common international information reporting forms they may have to file is Form 8938. It is similar to another form referred to as the FBAR (Foreign Bank and Financial Account Reporting) aka FinCEN Form 114 — which has been around for more than 50 years. The form 8938 is the new kid on the block and has been in existence for about 10 years. One common misconception is that if in any year you file one of the forms then you don’t have to file the other in the same year and/or include overlapping assets — but that is incorrect.
Differences Between the Form 8938 & FBAR
Let’s review 7 important tips about when comparing Form 8938 & FBAR Requirements:
Only File 8938 is you have to File a Tax Return
When a person has to file the FBAR, they have to file that form in any year they meet the threshold requirement for filing — even if they are not required to file a tax return. With the form 8938, it is only required when the taxpayer must also file a tax return. Therefore, if the taxpayer does not have to file a tax return in that year, then the form 8938 will not be due — even if the person otherwise meets the threshold for filing the form.
Is Filed with the IRS
The FBAR is filed directly with FinCEN, which is the Financial Crimes Enforcement Network. On the other hand, the Form 8938 is an IRS form — and filed directly with the IRS.
It is not on Automatic Extension
The FBAR is on automatic extension until October for most filers. Meanwhile, in order to obtain an extension for form 8938, the taxpayer must file the IRS Form 4868 form to request an extension of the tax return — and the 8938 goes an extension as well.
*A Form 7004 extension is not required.
Higher Threshold than the FBAR
The FBAR has a +$10,000 dollar annual aggregate total threshold requirement for filing, whether or not the taxpayer is married and filing jointly or filing separate/single. On the other hand, the form 8938 has different threshold requirements — and each of those threshold requirements are significantly higher than the FBAR +$10,000 filing requirement.
US vs Foreign Resident Filing Requirements
Not only does the form 8938 have a higher threshold than the FBAR, but there is a significant reporting difference for a person who is considered a US resident and a person who is considered a foreign resident.
The 8938 Form Includes Different Accounts/Assets than the FBAR
While there are many overlapping accounts and assets on both the FBAR and Form 8938, there are distinctions between which assets must be included on which form. For example, while stock accounts would be reported on both the FBAR and Form 8983, stock certificates would only be reported on form 8938.
In conclusion, this form 8938 is a very common international reporting form. Many taxpayers with foreign accounts and assets may also have to file an FBAR in the same year. While many of the requirements of these forms overlap — there are key distinctions between the different forms, so it is important to be speak with a Board-Certified Tax Specialist to help you evaluate the accounts/assets before submitting.
Golding & Golding: About Our Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS disclosure & compliance.
Contact our firm today for assistance.