FBAR gets most of the attention in nomad tax threads. Form 8938 for digital nomads is a separate filing, though. It has its own thresholds, its own penalties, and a much higher bar for anyone who genuinely lives outside the United States.
Confusing the two is common. It is also why some nomads over-file, or accidentally skip a form the IRS expects.
This guide breaks down what Form 8938 actually covers. It also shows how its thresholds compare with the FBAR, and where the rules genuinely diverge.
Figures below reflect IRS guidance as of this writing in July 2026. Tax rules can change annually, so confirm current thresholds directly with the IRS or a qualified tax professional before filing.
What Form 8938 Actually Reports
Form 8938, Statement of Specified Foreign Financial Assets, is filed under the Foreign Account Tax Compliance Act (FATCA). It attaches directly to your annual Form 1040. According to the IRS’s official FATCA reporting summary, it covers more than bank accounts.
Foreign stock, foreign-issued securities, and interests in foreign entities held for investment all count too. This scope is broader than the FBAR, which is limited to financial accounts, so a nomad holding foreign brokerage positions outside a bank account may owe a Form 8938 filing even in a year when no FBAR is triggered.
Form 8938 vs. FBAR: Thresholds Compared
The two forms serve different agencies and use different thresholds, which is where most of the confusion starts. The FBAR (FinCEN Form 114) applies once combined foreign account balances exceed $10,000 at any point in the year, regardless of where you live.
Form 8938 thresholds are higher, and unlike the FBAR, they also shift depending on whether you qualify as living abroad. The table below summarizes the current IRS thresholds for individual filers; married couples filing separately generally use the same thresholds as single filers.
| Filing Situation | Form 8938 Threshold | FBAR Threshold |
|---|---|---|
| Single, living in the US | Over $50,000 (year-end) or $75,000 (any time) | Over $10,000 combined, any time |
| Married filing jointly, living in the US | Over $100,000 (year-end) or $150,000 (any time) | Over $10,000 combined, any time |
| Single, living abroad | Over $200,000 (year-end) or $300,000 (any time) | Over $10,000 combined, any time |
| Married filing jointly, living abroad | Over $400,000 (year-end) or $600,000 (any time) | Over $10,000 combined, any time |
To qualify for the higher “living abroad” threshold, the IRS generally requires your tax home to sit in a foreign country. From there, one of two tests applies: physical presence for at least 330 full days out of a consecutive 12-month period, or bona fide residence in a foreign country for an uninterrupted period covering a full tax year.
The 330-day version mirrors the physical presence test used for the Foreign Earned Income Exclusion, although the two tests are evaluated separately even when the underlying day counts overlap. Our breakdown of the 183-day tax residency rule covers a related but distinct threshold: it affects which country taxes your income in the first place. Read it alongside this one, not in place of it.
Why the FBAR Requirement Does Not Go Away
Filing Form 8938 does not replace the FBAR. The IRS is explicit about this on its FATCA guidance page. The two filings use different definitions of “financial account” and go to different agencies, so certain assets end up on one form but not the other.
A nomad who clears the Form 8938 threshold should still check whether the much lower $10,000 FBAR threshold applies separately. Our FBAR guide for digital nomads walks through that filing in more detail, including the FinCEN e-filing process, which is entirely separate from the IRS’s Form 8938 submission.
What Counts as a Specified Foreign Financial Asset
Specified foreign financial assets include foreign bank and brokerage accounts. They also include foreign stock or securities not held through a US-based custodian. Interests in foreign partnerships, trusts, or entities held for investment count too, as long as they are not for business use.
Common examples nomads ask about include foreign pension accounts, foreign-issued life insurance with a cash value, and shares in foreign mutual funds. However, a few common items are excluded. A financial account held at the foreign branch of a US bank generally does not count.
Neither does an interest in a foreign social security or similar government program, according to the IRS. Some assets are already reported on other international forms, such as Form 5471 for foreign corporations. Those generally do not need to be listed twice on Form 8938, though the value still counts toward the reporting threshold.
Penalties for Skipping Form 8938
The IRS lists a $10,000 failure-to-file penalty for a missed Form 8938. An additional penalty of up to $50,000 can apply for continued non-filing after IRS notice. On top of that, a 40 percent penalty can apply to any understated tax attached to an asset that should have appeared on the form.
The statute of limitations also extends to six years in one case: more than $5,000 in gross income tied to a foreign asset goes unreported, considerably longer than the standard three-year window. For a nomad juggling multiple foreign accounts and a US tax return, these numbers are usually reason enough to file, even when the year’s asset value sits close to the threshold rather than comfortably below it.
Currency Conversion and Valuation
Most nomad accounts sit in a currency other than US dollars, so valuation is often the trickiest part of a Form 8938 filing. In most cases, the IRS instructs filers to convert foreign-currency balances using the Treasury Department’s Bureau of the Fiscal Service exchange rate. A bank statement’s built-in rate is not the standard to use.
For an account balance, a reasonable estimate of the highest fair market value during the year is generally acceptable, and periodic account statements from the foreign bank can support that figure. Keeping a simple spreadsheet with month-end balances in local currency makes this conversion far less painful at tax time, particularly for nomads who move between multiple countries and currencies within a single filing year.
Practical Filing Notes
Form 8938 attaches to your Form 1040. It is due on the same schedule as your regular tax return, including any extension you file. The FBAR runs on its own track, with an April 15 deadline and an automatic extension to October 15.
If you do not have a US filing obligation for the year at all, Form 8938 is not required, regardless of your foreign asset value. The FBAR filing requirement, by contrast, does not depend on whether you are required to file a federal income tax return.
These two rules often get merged into a single mental checkbox, which causes mistakes. Build a short annual habit instead: total your foreign account and investment values each December, then compare them against both tables above.
Frequently Asked Questions
Do I need to file both FBAR and Form 8938?
Possibly. The two forms have different thresholds and go to different agencies. It is common to owe both, one, or neither, depending on your account balances and asset types. Check your totals against both threshold tables separately rather than assuming one filing covers the other.
What is the Form 8938 threshold for a digital nomad living abroad?
A single filer who qualifies as living abroad must file if specified foreign financial assets exceed $200,000 at year-end, or $300,000 at any point during the year. Married couples filing jointly face a $400,000 year-end or $600,000 any-time threshold, according to current IRS guidance.
What happens if I miss the Form 8938 deadline?
The IRS can assess a $10,000 failure-to-file penalty, with continued non-compliance after notice adding up to $50,000 more, plus a 40 percent penalty on any related understated tax. A tax professional can advise on reasonable-cause arguments if you discover a past omission, and the IRS’s streamlined filing compliance procedures may be available for eligible taxpayers.
Related Reads
- FBAR for Digital Nomads: Do You Need to File in 2026? – the companion filing with a much lower $10,000 threshold.
- US Digital Nomad Taxes 2026: How FEIE Really Works – covers the income exclusion that uses a similar physical presence test.
- Digital Nomad Tax Residency 2026: The 183-Day Rule Explained – the related but separate test for which country taxes your income.