Often, yes. The FBAR and Form 8938 ask overlapping questions for two different parts of the government, and filing one never satisfies the other. The two requirements run side by side, and each has to be met on its own terms. Here is how they differ, point by point.
Who receives each form
The FBAR, FinCEN Form 114, goes to the Financial Crimes Enforcement Network, a Treasury bureau, through the BSA E-Filing System. It is never attached to your tax return. Form 8938 goes to the IRS as part of your income tax return and is due when the return is due, including extensions. If you are not required to file a tax return, you do not file Form 8938 at all, but the FBAR requirement can still apply.
The thresholds are very different
The FBAR starts at a combined $10,000 across all your foreign financial accounts at any time in the year. Form 8938 starts much higher, and moves with your filing status and where you live: for someone living in the United States, more than $50,000 at year end or $75,000 at any time if unmarried, and more than $100,000 at year end or $150,000 at any time for a married couple filing jointly. Living abroad raises the Form 8938 thresholds again. So the FBAR catches far more people, and Form 8938 catches the subset with larger foreign holdings.
They do not cover quite the same assets
Most ordinary foreign bank and investment accounts, foreign mutual funds and cash-value foreign insurance policies appear on both. The differences sit at the edges:
- An account at a foreign branch of a US bank goes on the FBAR, but not on Form 8938.
- Foreign shares you own directly, not through an account, go on Form 8938, but not on the FBAR.
- Interests in foreign partnerships, foreign hedge funds and foreign private equity funds go on Form 8938, but not on the FBAR.
- An account you can only sign on, with no financial interest of your own, generally goes on the FBAR, but not on Form 8938.
- Foreign real estate you own directly, and foreign currency you hold directly, go on neither.
The penalty regimes are separate
FBAR penalties come from the Bank Secrecy Act. They are civil penalties that depend on whether the failure was willful, they are adjusted for inflation each year, and in serious cases criminal penalties can apply. Form 8938 penalties come from the tax code: up to $10,000 for failing to file, with more after an IRS notice, and a 40% penalty on any underpayment tied to an undisclosed foreign asset. Our FBAR penalties guide covers the first, and our Form 8938 guide covers the second.
A worked example
A married couple in Naperville files a joint return. Between them they have a savings account and two fixed deposits in India, with a combined value that peaked at $48,000 during the year and stood at $41,000 on December 31. Their combined foreign accounts passed $10,000, so they owe an FBAR, listing all three accounts. Their foreign assets never reached $100,000 at year end or $150,000 at any time, so they do not owe Form 8938. If the same couple also held an old employer pension in the UK that pushed their total past $150,000 during the year, they would owe both forms, and the pension would go on Form 8938.
Getting both right, every year
The two forms are tested every year, on different dates and against different numbers, which is exactly how people end up compliant on one and not the other. Our FBAR and FATCA compliance service runs both tests each year, files what is due, and fixes earlier years when something was missed. If you are unsure which applies to you, a No-Obligation Tax Resolution Case Evaluation with our enrolled agents answers it from your actual accounts.