Form 8938 thresholds: 4 dollar pairs before filing

• Before the return is signed, confirm the client’s filing status to select the correct dollar threshold from the IRS comparison page.
• For an unmarried individual or a married person filing separately, the total value of assets must be more than $50,000 on the last day of the tax year or more than $75,000 at any time during the year, according to Internal Revenue Service.
• An unmarried individual or married person filing separately must have total assets more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year, according to Internal Revenue Service.
• A married couple filing jointly must have total assets more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year, according to Internal Revenue Service.
• Read all four pairs in the filled table before you sign.

Before you sign the return, you must determine if the client’s foreign assets meet the dollar threshold for Form 8938. This form is attached to the federal personal income tax return (Form 1040), as stated by TurboTax. This attachment requirement distinguishes it from the FBAR. The Internal Revenue Service specifies that the FBAR (FinCEN Form 114) is not filed with the IRS Internal Revenue Service. Therefore, the filing location differs for the two forms. Do not use the FBAR filing rules to decide where Form 8938 goes. The dollar test for Form 8938 depends on the client’s filing status. The specific dollar amounts are detailed in the next section. Check the client’s status first. Then compare the asset value to the threshold. If the value exceeds the threshold, attach Form 8938 to the return. If it does not, do not attach it. This decision must be made before the return is signed. Use Preparer duties before signing a return: 4 checks before that signature. Keep the distinction clear in your workpapers. A prior version can be checked in Workpaper recovery: 4 checks for a prior version. This prevents mixing the two forms in the client file. Start the file with Accounting Client Intake Checklist for a Clear Handoff. Use those pairs to make the final determination. The statute penalty for not attaching the form is also covered later. The separate $10,000 FBAR line is distinct from the Form 8938 thresholds. Do not confuse the two. The filled reference table later in this guide shows the exact amounts. Use that table to verify your determination. The note for the client’s file is provided for your records. The FAQ answers common questions about the thresholds. Follow the steps in order. First, identify the filing status. Second, find the matching threshold pair. Third, compare the asset value. Fourth, decide whether to attach Form 8938. Fifth, document the decision. This process ensures accuracy. It prevents errors in the client’s filing. It keeps the firm compliant. The dollar test is the first step in this process. It determines whether the form is required. Get it right before you proceed. Read it carefully. Apply the correct pair to the client’s situation. Do not guess. Cite the sources in your workpapers. This supports your decision. It protects the firm. It helps the client. The dollar test is simple but critical. Do not skip it. Do not rush it. Take the time to get it right. The consequences of error are significant. Avoid it by following the rules. The rules are clear. The thresholds are specific. Use the guide. Make the right decision. Sign the return with confidence. The client’s assets are protected. The firm’s reputation is maintained. The process is complete. Move on to the next step.

The specific dollar amounts for Form 8938 depend on the client's filing status. The Internal Revenue Service provides distinct threshold pairs for each of these scenarios on its page titled "Comparison of Form 8938 and FBAR requirements." You must identify which pair applies to your client before determining if the form is required.

For a client who is an unmarried individual or a married individual filing separately, the threshold is triggered if the total value of specified foreign assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year, according to Internal Revenue Service. If the client is a married individual filing jointly, the threshold is higher: the total value of assets must be more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year, according to Internal Revenue Service.

For an unmarried individual or a married individual filing separately, the total value of assets must be more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year, according to Internal Revenue Service. For a married individual filing jointly, the threshold is the highest of the four pairs: the total value of assets must be more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year, according to Internal Revenue Service.

The "at any time during the year" condition means you must check the asset values throughout the entire tax year, not just the year-end balance. If the client's assets exceed either the year-end amount or the any-time amount for their specific status, the form is required.

The penalty structure for failing to furnish information on foreign financial assets is defined in 26 U.S. Code § 6038D. If an individual fails to furnish the information described in subsection (c) with respect to any taxable year at the time and in the manner described in subsection (a), such person shall pay a penalty of $10,000, according to Legal Information Institute. This initial penalty applies to the failure to file the required information. If the failure described in the first paragraph continues for more than 90 days after the day on which the Secretary mails notice of such failure to the individual, the individual shall pay a penalty in addition to the penalties under the first paragraph, according to Legal Information Institute. This continuing penalty is $10,000 for each 30-day period or fraction thereof during which the failure continues after the expiration of the 90-day period, according to Legal Information Institute. The total penalty imposed under this paragraph with respect to any failure shall not exceed $50,000, according to Legal Information Institute.

The statute also addresses situations where the failure is not due to willful neglect. No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect, according to Legal Information Institute. The phrase "shown to be due to reasonable cause" indicates that the taxpayer must demonstrate this condition; it is not an automatic exception.

A distinct filing requirement exists for FinCEN Form 114, commonly known as the FBAR. Filing Form 8938 does not replace the FBAR. The FBAR has its own threshold based on the aggregate value of financial accounts. A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year, according to FinCEN. This $10,000 threshold is separate from the Form 8938 thresholds discussed in other sections of this guide.

The determination of whether the FBAR threshold is met relies on the maximum account value. If the maximum account value of a single account or aggregate of the maximum account values of multiple accounts exceeds $10,000, an FBAR must be filed, according to FinCEN. Conversely, an FBAR is not required to be filed if the person did not have $10,000 of maximum value or aggregate maximum value in foreign financial accounts at any time during the calendar year, according to FinCEN. The Internal Revenue Service also notes that the aggregate value of financial accounts exceeding $10,000 at any time during the calendar year is a key criterion in the comparison of Form 8938 and FBAR requirements, according to Internal Revenue Service.

The following tables list the specific dollar thresholds for Form 8938 and the separate FinCEN Form 114 requirement as stated by the Internal Revenue Service. Four rows are the quoted Form 8938 filing-status amounts and one row is the separate $10,000 FBAR line.

Take an illustrative aggregate of $10,000 in foreign financial accounts for one person. The FBAR line is an aggregate that exceeds $10,000 at any time during the calendar year, so this round total does not exceed that line. Keep Form 8938 on the filing-status pairs in the table. This example names no firm.

This note serves as a quick reference for your file, ensuring the correct dollar test is applied before the return is signed.

Remember that the Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts), according to Internal Revenue Service. Keep the two forms distinct in your documentation.

Write the client’s filing status, then circle the matching threshold pair from the filled table.

Which dollar pair applies to an unmarried client?

For an unmarried individual or a married individual filing separately, the threshold is a total asset value of more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year, according to Internal Revenue Service. These specific dollar amounts determine when the form must be attached to the return for this filing status.

Which pair applies to a joint return?

A married individual filing jointly must attach the form if the total value of assets was more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year, according to Internal Revenue Service.

Does Form 8938 replace the FBAR?

No, the Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts), according to Internal Revenue Service. The two forms serve distinct reporting purposes and must be evaluated separately.

What penalty does the statute name for not attaching the form?

The statute states that if an individual fails to furnish the required information at the time and in the manner described, such person shall pay a penalty of $10,000, according to Legal Information Institute. This base penalty is the specific amount named in the code for the failure to attach the form.

Does reasonable cause appear on the statute page?

Yes, the statute notes that no penalty shall be imposed on any failure which is shown to be due to reasonable cause and not due to willful neglect, according to Legal Information Institute. This provision exists as a condition for avoiding penalties, but it is not automatic and requires a showing of reasonable cause.