Statement of Specified Foreign Financial Assets (Form 8938) U.S. Taxpayers Holding Foreign Financial Assets May Also Need to File Form 8938 in addition to FBAR. This is commonly known as compliance as per FATCA. Taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets, which is filed with an income tax return.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation and is $107,600 for 2020.

If you paid or accrued foreign taxes to a foreign country on foreign source income and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes. Taken as a deduction, foreign income taxes reduce your U.S. taxable income. Taken as a credit, foreign income taxes reduce your U.S. tax liability.

Form 5471 is used by certain U.S. citizens and residents who are officers, directors, or shareholders in certain foreign corporations. The form and schedules are used to satisfy the reporting requirements of sections 6038 and 6046, and the related regulations. Who Must File Generally, all U.S.

Report of Foreign Bank and Financial Accounts (FinCEN Form 114/ FBAR) If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing electronically a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR).

A U.S. person qualifying under one or more of the Categories of Filers (see below) must complete and file Form 8865. If you qualify under more than one category for a particular foreign partnership, you must submit all the items required for each category under which you qualify.

Categories of Filers