FBAR vs. FATCA: What US expats need to know about foreign asset reporting
Money earned in 2025 is only part of your tax picture. The moment you keep savings, investments, or other funds outside the country, the IRS wants to see the full story. Many Americans abroad are surprised by how quickly foreign accounts become part of their yearly filing, which is why FBAR and FATCA play such an important role in staying compliant.
This guide by Taxes for Expats makes this process easier for Americans abroad who want confidence, not confusion. When it is time to match your 2025 income with the right forms and feel clear about every reporting requirement, our team guides you with support that feels calm, direct, and never overwhelming.
FBAR vs. FATCA: Key differences
The Bittner v. United States case showed that FBAR rules sit under one law and FATCA rules sit under another. This clear split makes the difference between FATCA and FBAR easier to see for expats who hold money or assets outside the country.
| Differences | FBAR | FATCA |
|---|---|---|
| Filing authority | Administered and received by FinCEN, a bureau of the US Treasury, not the IRS. | Administered by the IRS and reviewed with the individual income tax return. |
| Forms | FinCEN Form 114. Filed online through the BSA E-Filing System. | Form 8938. Filed with Form 1040 and used to report foreign financial assets directly to the IRS. |
| Reporting thresholds | Must file when all foreign accounts together pass $10,000 at any time in the year. | Thresholds depend on filing status and residence. They start at $50,000 (or $75,000 at any time) for single or married filing separately in the US. They rise to $400,000 (or $600,000 at any time) for married couples abroad. Entities use the $50,000 / $75,000 levels. |
| Types of assets reported | Bank, brokerage, and other foreign accounts held outside the US. | Broader assets. Covers foreign financial accounts plus foreign stock, partnership interests, and some foreign insurance or retirement contracts. |
| Filing deadlines | Due April 15, 2026, with an automatic extension to October 15, 2026. | Due with the 2025 Form 1040. Most filers use April 15, 2026, but extensions apply. Expats get an automatic 2-month delay. |
| Penalties | Non-willful violations can reach $10,000 per violation. Willful violations can reach the greater of $100,000 or 50% of the account balance. Criminal penalties are also possible. | A $10,000 penalty applies when Form 8938 is missing. Up to $50,000 can be added after an IRS notice. Accuracy penalties and criminal charges may apply when income is unreported. |
| Who must file | US persons with a financial interest in or signature authority over qualifying accounts once the reporting requirements cross the $10,000 mark. | Specified individuals and specified domestic entities with foreign financial assets that pass the FATCA thresholds. |
FBAR filing requirements
FBAR (Report of Foreign Bank and Financial Accounts) is a simple yearly report, under the Bank Secrecy Act, that helps the US keep track of certain money held in foreign accounts. It is filed on FinCEN Form 114, and it goes to the Financial Crimes Enforcement Network, a bureau of the Treasury – not the IRS – even though it is part of your US reporting requirements.
A clear way to imagine it is this: think of a US teacher who moves to Spain and opens a checking account for rent and groceries. Later, she adds a small investment account at a local bank. The accounts feel ordinary in her daily life, but from the US view, they are foreign, and once the balances grow, she must file an FBAR to stay compliant.
Who must file
These rules reach many types of US people
- US citizens at home or abroad who hold non-US bank or investment accounts during 2025.
- US resident aliens, including green card holders, with a financial interest in or control over accounts outside the United States.
- US corporations, partnerships, LLCs, trusts, and estates that count as US persons and hold reportable accounts.
- Individuals who only have signing power over a work account owned by a non-US business, except where an FBAR exception applies.
Reporting threshold
The FBAR rule for 2025 is simple. When the total of all qualifying non-US accounts goes over $10,000 at any point in the year, the FBAR must be filed. It does not matter if the balance drops later, or if only one account pushed the total past the limit. Once the line is crossed, all reportable accounts must be included.
Deadlines and extensions
The FBAR for 2025 is due 15 April 2026, right after the tax year ends. Anyone who misses that date gets an automatic extension to 15 October 2026. This longer window applies without asking for extra time, and it is separate from the income tax return.
Penalties for non-compliance
FBAR penalties sit outside the income tax rules, but they can still be heavy. The law lets the government use civil penalties or, in serious cases, criminal charges when accounts are not reported the way the Bank Secrecy Act requires.
- A non-willful violation can lead to a civil monetary penalty under Title 31, with the maximum amount set in an inflation-adjusted table in the federal regulations.
- A willful problem can lead to penalties of up to 50% of the balance in the account at the time of the violation, along with possible criminal fines and jail time.
- Penalties may apply for each year that has an issue, so several missing years can add up quickly.
For people who need a safe way to fix the past, the delinquent FBAR path is the main option. When someone files the missing forms with a clear explanation and shows they acted in good faith, the IRS can decide not to charge penalties. This offers a practical way for honest filers to catch up and move forward.
FATCA filing requirements
FATCA is the Foreign Account Tax Compliance Act, and it asks taxpayers to report certain foreign assets once they reach set amounts. This report is made on IRS Form 8938 and is filed with the income tax return that goes to the Internal Revenue Service.
People often say “trust but verify”, and that idea fits FATCA well. These rules help the US keep track of money held outside the country so nothing important gets missed. It does not look at how much a person earns – it looks at the value of foreign assets that must be shared with the IRS.
Who must file and how the filing thresholds work
FATCA does not apply to every tax return. Its reporting requirements focus on people and businesses that hold enough foreign assets for Form 8938 to matter.
- Specified individuals include US citizens, resident aliens, and some nonresident taxpayers who already need to file a tax return and own or benefit from specified foreign financial assets.
- Specified domestic entities include closely held US corporations, partnerships, and trusts that mainly hold passive investment assets and foreign holdings.
These groups are only the starting point. A filing duty begins when the value of all specified foreign financial assets goes over the Form 8938 limits set for where a person lives and how they file their return.
- For taxpayers living in the US, Form 8938 generally applies when specified foreign financial assets are worth more than $50,000 on the last day of the year, or more than $75,000 at any time, with those numbers doubled for married couples filing jointly.
- For taxpayers living abroad, the thresholds for the 2025 tax year filed in 2026 are $200,000 / $300,000 for single or separate filers and $400,000 / $600,000 for married joint filers. Many specified domestic entities use a $50,000 / $75,000 line.
Which asset types are included
Specified foreign financial assets cover more than bank money. They include foreign accounts, shares in non-US companies, interests in foreign partnerships or trusts, and some foreign life insurance or pension plans that build cash value. These rules help clarify which foreign accounts must be reported under FATCA and how they fit into larger reporting requirements.
Deadlines
Form 8938 is due on the same day as the income tax return for the 2025 tax year filed in 2026. When a taxpayer gets extra time from an automatic extension for living abroad or by filing Form 4868, that same extension also covers Form 8938.
Penalties for non-compliance
Skipping FATCA can lead to costly trouble. The law adds strong penalties to make sure foreign assets are reported on time and in full.
- $10,000 base penalty for not filing Form 8938 when required.
- Extra $10,000 for each 30-day period of continued non-filing after IRS notice, up to $50,000 in added charges.
- 40% accuracy penalty on any underpayment of tax linked to non-reported foreign assets.
- Longer IRS review periods for returns with large foreign omissions, which can stretch an audit window by several years.
These rules show why Form 8938 matters and why clear reporting helps avoid problems down the line.
Do you need to file both FBAR and FATCA?
Many people earn more over time and then open accounts or invest outside the US, which brings extra reporting rules. Some only need one form, but others must file both, and it helps to know where you fit so you do not miss anything.
Cases where both are required
Both forms apply when foreign accounts go over the FBAR limit of more than $10,000 at any time in the year. FATCA also applies when total foreign assets pass the IRS levels for 2025 income filed in 2026, like $200,000 or more at year-end for a single filer abroad. A teacher in Spain with over $10,000 in accounts and about $500,000 in total assets as a joint filer abroad would need both forms.
Cases where only one applies
Some people only need the FBAR when their foreign accounts pass $10,000, but their total assets stay below the Form 8938 levels. A nurse in Canada with around $20,000 in local accounts but far less than $200,000 in total assets would only file the FBAR. Others may only need Form 8938, like someone in the US holding $120,000 of foreign stock but no foreign bank account at all.
Unsure what to file? Get professional guidance now
FBAR and FATCA sound similar, but they kick in for very different reasons, and it’s normal to feel unsure about which one fits your situation. A quick look at your accounts and assets can make the differences clear and save you from costly mistakes.
Our specialists at Taxes for Expats are ready to walk you through it all so you stay confident, covered, and fully compliant.
FAQ
On FinCEN Form 114, you list each foreign account’s owner name, account number, the foreign institution’s name and address, the account type, and the maximum balance during the year.
The maximum value is the highest balance shown for the account at any time in the year, converted to US dollars using the official Treasury exchange rate, so all accounts can be compared on one clear scale.
FBAR is an information report under the Bank Secrecy Act, so it does not by itself change how much US tax you owe, but missed or late reports can still lead to serious civil and even criminal penalties.
FATCA also places duties on many foreign financial institutions to identify and report US account holders, and those that do not comply can face a 30% withholding tax on many types of US-source payments.
Even when foreign trusts, corporations, or other holdings are already shown on forms such as Form 3520 or Form 5471, the interests can still count as specified foreign financial assets, and Form 8938 must note those filings once its thresholds are met.
Form 8938 is not required when the total value of specified foreign financial assets stays below the FATCA thresholds for a person’s filing status and place of residence, so smaller foreign holdings often fall outside this particular reporting duty.
You can file FBAR yourself online, but many expats choose tax professionals like TFX when they have multiple accounts, past non-filing, or complex foreign assets.
