Understanding the Form 8938

Aug 21, 2017

In addition to helping you quickly and anonymously determine if you have an FBAR filing obligation, the FBAR Wiz app also can tell you the likelihood that you have to file a Form 8938.  In general, the Form 8938 is used to report your specified foreign financial assets if the total value of all the specified foreign financial assets in which you have an interest is more than the appropriate reporting threshold, listed below for reference. Overall, your applicable reporting threshold depends upon whether you are married, file a joint federal income tax return, and live inside (or outside) the United States. 1. Unmarried Taxpayers Residing Within the United States If you are not married, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.  2. Married Taxpayers Filing a Joint Return and Residing Within the United States If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year. 3. Married Taxpayers Filing Separate Returns and Residing Within the United States If you are married and file a separate income tax return from your spouse, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. 4. Unmarried Taxpayers Residing Outside of the United States If you are not married, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year. 5. Married Taxpayers Filing a Joint Return and Residing Outside of the United States If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year. 6. Married Taxpayers Filing Separate Returns and Residing Outside of the United States If you are married and file a separate income tax return from your spouse, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year. 7. Domestic (Business) Entity Specified domestic entities satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.   Determining if You "Reside Within" or "Reside Outside of" the United States for Purposes of the Form 8938 You satisfy the presence abroad test if you are one of the following:

1. A U.S. citizen who has been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.
2. A U.S. citizen or resident who is present in a foreign country or countries at least 330 full days during any period of 12 consecutive months that ends in the tax year being reported.