FBAR and FATCA: Reporting Foreign Accounts as an American Abroad

If you open a bank account abroad, and nearly everyone who moves abroad does, the US government wants to know about it. Two separate rules cover this: the FBAR, filed with the Treasury's Financial Crimes Enforcement Network, and Form 8938 under FATCA, filed with your tax return. They overlap but are not the same, and filing one does not satisfy the other. Neither one creates new tax. They are disclosures, and the penalties for skipping them can be far larger than any tax involved.

The FBAR (FinCEN Form 114)

The FBAR is the Report of Foreign Bank and Financial Accounts. A "US person" (citizens, green card holders, and US residents, plus US entities) must file it if:

• you have a financial interest in, or signature authority over, one or more financial accounts outside the US, and
• the aggregate value of those accounts exceeded $10,000 at any time during the calendar year.

The word "aggregate" is where people slip. You add up the highest balance of each account during the year. If your checking account peaked at $7,000 and your savings account at $4,000, you have crossed $10,000 and must report both, even if neither account alone ever reached the threshold.

What counts as a foreign financial account

• Checking and savings accounts at foreign banks
• Foreign brokerage and securities accounts
• Foreign mutual funds and many foreign pension or insurance products with cash value
• Joint accounts with a spouse or relative
• Accounts you can sign on but don't own, such as an employer's account or an elderly parent's account

A US bank account is not a foreign account, even if you access it from abroad.

Deadline and how to file

The FBAR is due April 15 for the previous calendar year, with an automatic extension to October 15. You do not have to ask for the extension. It is filed electronically through FinCEN's BSA E-Filing System, not with your tax return, and individuals can file without registering for an account. You report each account's maximum value during the year in US dollars, using the Treasury's year-end exchange rate.

Form 8938 under FATCA

The Foreign Account Tax Compliance Act added a second report, Form 8938, Statement of Specified Foreign Financial Assets. You attach it to your Form 1040. The thresholds are much higher for people who live abroad:

You must file if you exceed either number. Thresholds for people living in the US are lower, so if you move mid-year, check which set applies.

Form 8938 covers some assets the FBAR does not, such as directly held foreign stock or an interest in a foreign partnership. And unlike the FBAR, if you are not otherwise required to file a tax return, you generally don't file Form 8938.

FBAR vs. Form 8938 at a glance

Penalties, in general terms

Both reports carry serious penalties, which is why expat-tax professionals put so much weight on them.

• Form 8938: the IRS lists a penalty of up to $10,000 for failing to file, with additional penalties if you still don't file after an IRS notice, up to a further $50,000. Criminal penalties are possible, and underpaid tax tied to undisclosed assets can draw additional accuracy penalties.
• FBAR: civil penalties are adjusted for inflation each year. They are much higher for willful violations, which can reach a large share of the account balance, than for non-willful mistakes. Criminal penalties apply in serious cases.

The practical point: an honest mistake caught and fixed by you is treated very differently from one the government finds first. If you have missed years, the IRS has procedures for people whose failure was not willful. Talk to a US expat-tax professional before filing anything to catch up, because the right path depends on your facts.

Why foreign banks ask for your W-9

FATCA does not only apply to you. It also requires foreign financial institutions to identify and report accounts held by US persons to the IRS, either directly or through their own governments under agreements with the US. Institutions that don't cooperate face withholding on certain US payments.

That is why, when you open an account in Lisbon or Panama City, the bank asks whether you are a US person and hands you a Form W-9 to certify your Social Security number. Some consequences:

• Expect the question even if you also hold another citizenship. Banks look for US indicators such as a US birthplace, address, or phone number.
• Some banks, especially smaller ones and investment platforms, simply decline American customers. Shop around rather than taking it personally.
• Your foreign accounts are likely already known to the IRS. Filing your FBAR and Form 8938 correctly keeps your reports consistent with what the bank sends.

More on opening accounts is in our banking abroad guide.

The PFIC trap: think twice before buying local funds

Here is a costly mistake that has nothing to do with banking. Once you settle in, a local bank or adviser may suggest you put savings into a local mutual fund, ETF, or investment-linked insurance product. For a US taxpayer, most foreign pooled investment funds are treated as Passive Foreign Investment Companies (PFICs).

PFIC rules were written to stop Americans from deferring tax through offshore funds, and they are deliberately harsh:

• Gains and certain distributions can be taxed at the highest ordinary rate, plus an interest charge, instead of at capital gains rates.
• Each fund generally needs its own Form 8621 every year you hold it, which adds real preparation cost.
• Elections that soften the treatment exist, but they require information many foreign funds don't provide.

Most US expat-tax professionals tell clients to avoid foreign funds and keep long-term investments in US-domiciled funds held at a US brokerage, where possible. That can be harder than it sounds, because some US brokerages restrict accounts for customers with a foreign address. Plan this before you move, and see keeping a US address.

A yearly checklist

1. List every foreign account. Include joint accounts and anything you can sign on.
2. Record the maximum balance of each account during the calendar year.
3. Add them up. Over $10,000 combined at any point means an FBAR.
4. Check Form 8938 thresholds for your filing status and residence.
5. Flag any foreign funds or pensions for your preparer, since they may need extra forms.
6. File the FBAR by October 15 at the latest, and Form 8938 with your return. Our US taxes abroad guide covers return deadlines.

Last reviewed October 17, 2026. General information only, not legal, immigration, or tax advice. Requirements change, so confirm with official sources before you apply. See our disclaimer.