FBAR or Form 8938: which do I file as an American abroad?

The FBAR — the report of foreign bank and financial accounts — is owed by US persons whose foreign financial accounts together were worth more than $10,000 at any time in the calendar year. It is filed on its own, online through FinCEN's BSA E-Filing System, not with the tax return. It is due on 15 April, with an automatic extension to 15 October.

Form 8938 reports specified foreign financial assets, and it goes with the income tax return, due on the return's own date including any extension. Its thresholds are far higher for someone living abroad: more than $200,000 on the last day of the year or more than $300,000 at any time during it if unmarried, and $400,000 or $600,000 if married filing jointly. For someone living in the US the same figures are $50,000 and $75,000, or $100,000 and $150,000 jointly.

The IRS counts a US citizen as living abroad for these thresholds if, among other tests, their tax home is in a foreign country and they were present abroad for at least 330 days in a 12-month period.

The IRS says it plainly: the Form 8938 requirement does not replace or affect the obligation to file the FBAR. Someone with $250,000 in a foreign bank account files both; someone with $20,000 files the FBAR only.

The two also cover different things. Foreign stock or securities not held in a financial account, interests in foreign partnerships, and foreign hedge funds and private equity funds go on Form 8938 but not the FBAR. Accounts at foreign branches of US financial institutions, and accounts where you only have signature authority, go on the FBAR but not Form 8938.

The IRS's comparison lists a penalty of up to $10,000 for failing to file Form 8938, plus $10,000 for each 30 days it stays unfiled after an IRS notice. For the FBAR it lists up to $10,000 for a non-willful failure, and for a willful one the greater of $100,000 or half the account balances.

Every service in the comparison covers the federal return, which is where Form 8938 goes when it is needed. They differ on the FBAR: 2 of the 10 include it in the price, others charge for it, and Expatfile sends instructions for filing it yourself, which FinCEN's system lets you do at no charge.

The cheapest route with the FBAR filed for you is $175, at MyExpatTaxes. Check each package's stated limits if you hold investments abroad: the table prices a standard return, and extra forms are priced as add-ons.