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Form 8938 Vs FBAR
A US person may need to file Form 8938 (FATCA report) or a FinCEN Form 114 (FBAR report). But which form should you file? Getting it wrong could result in severe penalties. And while the two forms are similar, they do have some noteworthy differences. Here’s what you need to know about filing an FBAR or Form 8938.
Form 8938 | FinCEN Form 114 (FBAR) | |
| Who must file? | Specified individuals and specified domestic entities that have an interest in specified foreign financial assets and meet the reporting threshold Specified individuals include U.S citizens, resident aliens, and certain non-resident aliens | U.S. persons, which include U.S. citizens, resident aliens, trusts, estates, and domestic entities that have an interest in foreign financial accounts and meet the reporting threshold |
| Does the United States include U.S. territories? | No | Yes, resident aliens of U.S territories and U.S. territory entities are subject to FBAR reporting |
| What is reported? | Maximum value of specified foreign financial assets, which include financial accounts with foreign financial institutions and certain other foreign non-account investment assets | Maximum value of financial accounts maintained by a financial institution physically located in a foreign country |
| When due? | Form is attached to your annual return and due on the date of that return, including any applicable extensions | Received by April 15 (6-month automatic extension to Oct 15) |
| Where to file? | File with income tax return pursuant to instructions for filing the return. | File electronically through FinCENs BSA E-Filing System. The FBAR is not filed with a federal tax return. |
| Penalties | Up to $10,000 for failure to disclose and an additional $10,000 for each 30 days of non-filing after IRS notice of a failure to disclose, for a potential maximum penalty of $60,000; criminal penalties may also apply | Civil monetary penalties are adjusted annually for inflation. For civil penalty assessment prior to Aug 1, 2016, if non-willful, up to $10,000; if willful, up to the greater of $100,000 or 50 percent of account balances; criminal penalties may also apply |
| Types of foreign assets | Form 8938 | FinCEN Form 114 (FBAR) |
| Financial (deposit and custodial) accounts held at foreign financial institutions | Yes | Yes |
| Financial account held at a foreign branch of a U.S. financial institution | No | Yes |
| Foreign financial account for which you have signature authority | No, unless you otherwise have an interest in the account | Yes, subject to exceptions |
| Foreign stock or securities held in a financial account at a foreign financial institution | The account itself is subject to reporting, but the contents of the account do not have to be separately reported | The account itself is subject to reporting, but the contents of the account do not have to be separately reported |
| Foreign stock or securities NOT held in a financial account | Yes | No |
| Foreign partnership interests | Yes | No |
| Foreign hedge funds and foreign private equity funds | Yes | No |
| ‘Social Security’- type program benefits provided by a foreign government | No | No |
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Tax on a child's investment and other unearned income (kiddie tax)
There are basically two situations may affect the tax and reporting of the unearned income of certain children.
If your child’s interest, dividends, and other unearned income total more than $2,600 (For 2024 tax year), it may be subject to a specific tax on the unearned income of certain children. You must file Form 8615 to figure the child’s tax on unearned income over $2,600 if the child is under age 18, and in certain situations if the child is older.
If your child’s only income is interest and dividend income (including capital gain distributions) and totals less than $13,000 (For 2024 tax year), you may be able to elect to include that income on your return rather than file a return for your child. If you make this election, your child won’t have to file a tax return.
Here are some of the basic differences between these two forms. File any of these forms based on the following facts if ALL conditions are met.
Form 8615
- The child’s unearned income was more than $2,600
- Includes earned income
- AGE REQUIRMENTS: The child was under age 18 at the end of the tax year or the child was age 18 at the end of the tax year and didn’t have earned income that was more than half of the child’s support, or the child was a full-time student at least age 19 and under age 24 at the end of the tax year and the child didn’t have earned income that was more than half of the child’s support.
- The child is required to file a tax return for the tax year.
- The child does not file a joint return for the tax year.
- At least one of the child’s parents was alive at the end of the tax year.
Form 8814
- Child’s gross income was less than $13,000 for the tax year.
- Income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends).
- AGE REQUIREMENTS: At the end of the tax year your child was under age 19 (or under age 24 if a full-time student).
- The child is required to file a return unless the parent make this election.
- The child does not file a joint return for the tax year.
- You’re the parent qualified to make the election or you file a joint return with your child’s other parent.
- No estimated tax payments were made for your child for the tax year, and no overpayment from the previous tax year (or from any amended return) was applied to the current tax year under your child’s name and Social Security number and no federal income tax was withheld from your child’s income under the backup withholding rules.