What is the Form 8938 threshold if I live abroad?
For the 2025 tax year, a filer who lives abroad and is not filing a joint return reports if specified foreign financial assets exceed US$200,000 on the last day of the tax year, or US$300,000 at any time during it. Filing a joint return, the figures are US$400,000 and US$600,000. Two things trip people up. The higher bands apply only if you meet the test for living abroad, which is a day count rather than a matter of where you feel you live. And each band is a pair of figures, not one, so both have to be tested and either being exceeded is enough.
How do I know if I count as living abroad for this?
The test that decides it for most people is a day count, and it is worth reading precisely: physical presence in a foreign country or countries for at least 330 days during a period of twelve consecutive months ending in the tax year. Three features matter. The twelve-month period need not be the tax year, so it can reach back into the one before. Countries are counted together, so a year split between two of them still works. And days in the United States are not days in a foreign country, whatever the reason for them. If the answer is close, reconstruct it from travel records before relying on it.
Does the Form 8938 threshold change if I file separately?
It does, and not in your favour. For the 2025 tax year a married filer in the United States who files separately tests at US$50,000 on the last day of the year or US$75,000 at any time during it — the same pair as an unmarried filer, and half of the US$100,000 and US$150,000 that a joint return attracts. So a couple whose combined holdings sit comfortably inside the joint band can each be over the line once they file separately. This catches couples who separate their returns for an unrelated reason, and couples where one spouse is outside the US filing system altogether.
Why are there two numbers for each Form 8938 threshold?
Because the threshold is tested on two measures rather than one: the value on the last day of the tax year, and the highest value reached at any time during it. Either being exceeded is enough. The year-end figure is the one people compute, because it is the one their statements show, and the high-water figure is the one that catches them. Any event that lifts the aggregate temporarily — a property sold abroad with the proceeds sitting in an account, a deposit maturing, a transfer in transit across a month end — can put you over the second measure in a year that looks well inside the first.
My assets were over the threshold for one week only — does that count?
Yes. The second of the two measures asks for the highest value at any time during the tax year, so a peak that has passed by the time the year closes still decides the question. A week is enough, and so is a day. In practice this makes reconstructing the year the real work: you need the high point of the aggregate rather than the closing balances, and that means statements across the whole year instead of year-end summaries. It also means a single transaction can make a filer of someone who has never been one, and then stop, so the answer can differ from one year to the next.
I am over the account reporting threshold but under this one — what do I file?
Both questions have to be answered separately, because they are different tests. The separate report of foreign accounts, filed outside the return, and this statement carry different thresholds measured on different things, so being over one tells you nothing about the other. It is entirely normal to owe one and not the other, in either direction, and to switch between them from year to year. The practical approach is to build one inventory of holdings and then run it through each test on its own terms, recording the result. Answering one test and assuming the other follows is a common cause of a missed filing here.
Who has to file an FBAR?
A US person whose foreign financial accounts, added together, exceed the reporting threshold at any point in the year — measured on the aggregate high balance, not on year-end value, and not on income. It captures accounts you merely have signature authority over, so business and family accounts are frequently missed. It is filed with FinCEN separately from the tax return, and its penalties are separate too. See FBAR — FinCEN 114.
How do families with assets in two countries handle inheritance?
With paperwork built for both systems rather than one. In practice that means wills that work where each asset actually sits, an executor with authority a foreign bank or land registry will accept, clearance certificates before the estate distributes so the executor is not left personally exposed, and an estate tax exposure calculation done while the person is alive and can still act on it. Doing it afterwards costs more and forecloses most of the options. See cross-border wills and trusts.
