FATCA filing requirements: What are they?

If you hold financial assets outside the US, such as foreign bank accounts or investments in overseas stocks, you need to know about FATCA filing requirements.

The Foreign Account Tax Compliance Act (FATCA) requires most US taxpayers to report their foreign financial assets to the IRS each year.

It was created to target tax evasion through offshore accounts, and the rules apply regardless of whether you live in the US or in another country.

Missing these requirements can lead to high penalties, so it's important to understand what you need to file and when. This guide breaks down everything you need to know.

We'll also introduce the Wise account, which allows you to send, spend, and receive your money across the globe in over 40 currencies – all at the fair mid-market rate.

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Table of contents
What is FATCA, and who needs to comply with it? FATCA reporting requirements Who is exempt from FATCA reporting? What is the Form 8938? FATCA filing process Will I owe US tax under FATCA? FATCA vs FBAR Tips for US citizens living abroad

What is FATCA, and who needs to comply with it?

Congress passed FATCA in 2010 to stop US taxpayers from hiding money in foreign accounts to avoid taxes.¹

The law works two ways: it requires taxpayers to report their foreign assets, and it forces foreign banks to share information about US account holders with the IRS.

Having foreign or offshore accounts is perfectly legal, but failing to disclose them is not. This is because the US taxes its citizens and residents on worldwide income, regardless of where they live or where their money is held.

FATCA applies to all US persons, which casts a wider net than you might expect:

• US citizens, including dual citizens living abroad
• US residents, including green card holders
• Certain visa holders who meet the substantial presence test (spending enough time in the US)
• Domestic entities, such as corporations, partnerships, and trusts organized in the US
• Some estates and trusts under US court jurisdiction

Most of the time, if you're a tax resident in the US, you must file FATCA if you hold specified foreign financial assets and meet certain thresholds.

💡 If you fail to report under FATCA, you'll face steep penalties, starting at 10,000 USD and going up to 50,000 USD, plus a 40% penalty on any tax underpayment related to assets you didn't disclose.¹

FATCA reporting requirements

Taxpayers living abroad

If you're a US citizen or resident living outside the US, FATCA gives you higher reporting thresholds than for those living in the US.

The IRS recognizes that expats often need foreign bank accounts and investments to manage their daily lives, so the amounts that trigger filing requirements are more generous.

You qualify as living abroad if your tax home is in a foreign country and you've been present outside the US for at least 330 days during any consecutive 12-month period.²

Here are the FATCA filing requirements for expats:

Filing status²	Value on last day of tax year	Value at any point during year
Single (or married filing separately)	More than 200,000 USD	More than 300,000 USD
Married filing jointly	More than 400,000 USD	More than 600,000 USD

For example, if you're single and your foreign assets total 250,000 USD on December 31, you must file, even if they never reached 300,000 USD during the year. Conversely, if your assets hit 310,000 USD in July but dropped to 180,000 USD by year-end, you still need to file.

If your financial accounts or assets are in a foreign currency, you need to convert them to USD using an IRS-approved currency exchange rate. All FATCA reporting is done in USD.

💡 Learn more about US taxes for Americans living abroad.

Taxpayers living in the US

If you live in the US but hold foreign financial assets, your reporting thresholds are much lower than those for expats.

The IRS expects domestic taxpayers to primarily use US financial institutions, so foreign holdings above relatively modest amounts trigger reporting requirements.

Here are the FATCA filing requirements for taxpayers living in the US:

Filing status²	Value on last day of tax year	Value at any point during year
Single (or married filing separately)	More than 50,000 USD	More than 75,000 USD
Married filing jointly	More than 100,000 USD	More than 150,000 USD

For example, if you inherited a property abroad or manage some foreign investments, you'll likely need to report them under FATCA.

Learn more about paying US taxes on your foreign income.

Foreign institutions

Foreign financial institutions, such as banks and investment firms, must also comply with FATCA by reporting information about their US account holders directly to the IRS.

This institutional reporting requirement means that even if you don't report under FATCA on time, the IRS may still learn about your foreign accounts through your bank or financial institution. Many countries have signed agreements with the US to make this information exchange easier.

Who is exempt from FATCA reporting?

Not everyone with foreign assets needs to report under FATCA. You're exempt if:

• Your assets fall below the threshold: If your specified foreign financial assets don't exceed the amounts for your filing status and location, you don't need to file
• You don't file a US tax return: If you're not required to file an income tax return for the year, you don't need to file under FATCA
• Your assets are already reported on other forms: If you've already disclosed foreign assets on forms like 5471, 8621, 8865, 3520, or 8891, you can reference those forms on your FATCA form instead of listing the details again²
• You hold accounts with US institutions: Financial accounts maintained by a US bank, even if it's a foreign branch, don't count as specified foreign financial assets

Ultimately, if you're unsure if you must report your foreign financial accounts or not, it's a good idea to consult with a knowledgeable tax professional.

FATCA penalties are steep, so it's better to be safe than sorry.

What is the Form 8938?

Form 8938 is the tax form you'll use to report your foreign holdings to the IRS. It'll ask for detailed information about each asset, such as what it is, where it's held, its maximum value during the year, and any income it generated.

You'll attach it to your annual income tax return.

FATCA filing process

1. Gather your documents

To fill out Form 8938, you'll need information like account statements showing year-end balances and maximum values during the year, documentation for foreign investments or business interests, and records of income generated by these assets.

2. Calculate your asset values

You'll need to calculate your asset values in USD according to the prompts in Form 8938.

You'll then need to convert all foreign currency amounts to USD using the Treasury Department's exchange rates for December 31.²

3. Complete Form 8938

Fill out the form with details about each reportable asset.

The information you'll need to provide depends on the asset, but typically you'll need to report the maximum value during the year and any income the asset produced.

4. Attach to your tax return

You'll file Form 8938 with your annual tax return. You don't submit it separately.

5. File by the tax deadline

Your Form 8938 is due when your tax return is due, typically April 15. If you live abroad, you automatically get until June 15 to file, with the option to extend further to October 15.³

Will I owe US tax under FATCA?

No, FATCA is a reporting requirement. It's not a tax.

However, you need to report the income from your foreign assets on your regular tax return, just as you would with domestic investments. You may or may not owe US taxes on it, depending on your tax strategy.

If you fail to report under FATCA, you'll face steep penalties, starting at 10,000 USD and going up to 50,000 USD, plus a 40% penalty on unreported income.¹

FATCA vs FBAR

FATCA and FBAR are two separate reporting requirements. However, the difference between them can be confusing since they both involve foreign financial accounts.

FBAR (Foreign Bank and Financial Accounts Report) requires you to report foreign bank accounts if their combined value is over 10,000 USD at any point during the year. You file it separately with the Financial Crimes Enforcement Network (FinCEN), not with your tax return.⁴

FATCA has higher thresholds and covers a broader range of assets beyond bank accounts, such as foreign stocks and partnership interests. It's also something you file with your tax return to the IRS.

Ultimately, many US taxpayers need to file both FATCA and FBAR. It's also important to know that filing one does not exempt you from the other.

Tips for US citizens living abroad

If you're an American citizen living overseas, dealing with US tax obligations and reporting requirements is often confusing. Here are a few tips to help you stay compliant:

• Keep detailed records of your foreign account balances throughout the year, since the maximum value at any point can trigger filing requirements
• Remember that FATCA reporting is separate from FBAR, and you may need to file both
• Don't attempt "quiet disclosure" by filing delinquent forms without following proper procedures, because if the IRS catches on, you'll lose access to penalty relief programs

If you're behind on FATCA filings, you can look into the IRS Streamlined Filing Compliance Procedures, which let you catch up without facing the standard penalties.

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Filing FATCA reports on time protects you from hefty penalties. Plus, it's just a reporting requirement, not a tax, so the only thing you need to do is fill out Form 8938 and attach it to your tax return.

If you're an American living abroad, FATCA compliance is just one piece of managing your international financial life. Another common challenge is the logistics of opening foreign bank accounts and moving money between different countries.

Opening foreign bank accounts is complicated, and international transfers often come with high fees and currency exchange rate markups that eat into every transaction.

But there's a better way to do all of this: Wise.

With the Wise account, you can top up your USD with a domestic transfer that you will be able to convert at the mid-market rate with an upfront conversion fee.

Learn more about Wise

Sources

1. Investopedia - Foreign Account Tax Compliance Act (FATCA)
2. IRS - Summary of FATCA reporting for US taxpayers
3. IRS - US citizens and resident aliens abroad
4. IRS - Report of Foreign Bank and Financial Accounts (FBAR)

Sources checked 12/08/2025