If you’re a US citizen or green card holder living in Australia, it’s likely you hold financial assets outside the United States. Even if you’ve already filed an FBAR, you may also need to file Form 8938 (Statement of Specified Foreign Financial Assets) as part of your annual US tax return.
Here’s what you need to know.
What Is a Specified Foreign Financial Asset?
Form 8938 is designed to capture foreign financial assets that may not be reported elsewhere on your tax return. These include:
- Bank accounts (including joint accounts held overseas)
- Investment accounts held outside the US
- Foreign shares, bonds, ETFs, and managed funds
- Australian superannuation (in most cases)
- Vested foreign pensions and deferred compensation
- Interests in foreign trusts or private companies
- Contracts or instruments issued by a foreign person or entity
Importantly, Form 8938 does not include physical assets such as property, your family home, vehicles, or jewellery.
Do I Need to File Form 8938?
Whether you’re required to file depends on your filing status and where you reside. For individuals living outside the United States and filing as Single or Married Filing Separately, you must file Form 8938 if either of the following thresholds is met:
- The total value of your specified foreign financial assets was more than USD 200,000 on 31 December, or
- The value exceeded USD 300,000 at any time during the year
For those filing jointly with a spouse, the thresholds are higher:
- USD 400,000 on 31 December or
- USD 600,000 at any point during the year
Even if you renounced your US citizenship during the tax year, you may still be required to file Form 8938 for the full calendar year. Unlike some other forms, there’s no exemption for partial-year residency or dual-status returns when it comes to this form.
FBAR vs. Form 8938: What’s the Difference?
Although both forms report foreign financial accounts, they are not interchangeable:
- FBAR (FinCEN Form 114) is filed separately with the Treasury Department, not the IRS.
- Form 8938 is attached to your annual US tax return and includes a broader category of assets — such as superannuation, foreign shares, and interests in foreign entities.
Many US expats in Australia are required to file both.
Why This Matters
Failure to file Form 8938 when required can lead to significant consequences:
- A minimum penalty of USD 10,000
- Additional penalties of up to USD 50,000 for continued failure after IRS notice
- Possible criminal charges if non-compliance is found to be wilful
- Extended audit period for your entire tax return
This form is not optional — and unfortunately, not always well known among expats. If you’re unsure, it’s worth getting advice before the IRS comes knocking.
Need Help with Form 8938?
If you think Form 8938 might apply to you, or you’re just not sure, we can help you figure it out and take care of the paperwork.
Book An Appointment Here
