FATCA threshold: Guide for Americans and US expats

Are you a US person with foreign financial assets, such as bank accounts or investment portfolios? Then you may need to file Form 8938 with the IRS if your assets are over the FATCA threshold for your situation.

FATCA requires US taxpayers to report foreign financial assets above certain amounts. The FATCA threshold varies based on where you live and how you file your taxes. But many people aren't sure which threshold applies to them or how to calculate their total asset value correctly.

Here's how to determine if your foreign financial accounts trigger reporting requirements.

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.

Learn more 🔎

What is FATCA?

FATCA, or the Foreign Account Tax Compliance Act, is a law that requires US taxpayers to report specified foreign financial assets to the IRS. It helps the government track offshore assets and prevent tax evasion.

To stay compliant with FATCA reporting, you have to file Form 8938.¹

Filing FATCA doesn't mean you owe any additional US tax. It's just an information return that tells the IRS what foreign assets you hold and their value.

Most Americans abroad use tax benefits like the Foreign Earned Income Exclusion or Foreign Tax Credit to reduce or eliminate their US tax liability, even when they report many foreign holdings.

What is the FATCA reporting threshold?

The FATCA threshold is what determines whether you need to file Form 8938. It depends on where you live (in the US or abroad) and your tax filing status.

Here's what to expect:

FATCA threshold for taxpayers living in the US

If you live in the US, FATCA reporting thresholds are much lower than for Americans abroad, starting at 50,000 USD for single filers.¹

FATCA threshold for taxpayers living abroad

The thresholds for Americans living abroad are higher than for US residents.

This is because expats typically need larger foreign account balances to cover daily living expenses, housing costs, and savings.

To use these higher amounts, your tax home must be in a foreign country, and you must be present in that country for at least 330 days during a consecutive 12-month period.¹

Who is required to file FATCA?

Form 8938 applies to "US persons," which is a tax term that covers more people than you might expect.

You're required to file if you meet the threshold requirements and fall into any of these categories:

• US citizens living anywhere in the world, including dual citizens
• Green Card holders, even if you live outside the US
• Resident aliens who meet the substantial presence test
• Certain domestic trusts and estates with US beneficiaries

Your filing obligation exists whether you live in the US or abroad, whether you owe US tax or not, and whether your foreign accounts generate income or remain untouched.

If you're a US person and the total value of your foreign financial assets is over the FATCA threshold, you need to file.

Explore Wise – an easy way to make international payments

If you’re not living in the US — or if you simply want a more flexible account you can open from anywhere — check out Wise.

Wise isn’t a bank, but a money service business (MSB) that offers an account which allows you to hold, send and receive money. As well as getting an attached multi-currency card** — plus you’ll get some extra perks which suit anyone living an international lifestyle.

You’ll be able to hold 40+ currencies, and get local account details for up to 9 currencies including USD, to get paid easily by wire or ACH.

Wise offers linked multi-currency cards for spending and withdrawals around the world, and all currency conversion uses the mid-market exchange rate.

That means that whenever you send a payment or spend in a foreign currency your dollars are converted with the mid-market rate with low conversion fees from 0.41%*. Easy.

This way to easy
international payments

*Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information

**Wise is not a bank. The Wise Multi-Currency Card is issued by our sponsor Bank(s), member(s) FDIC. Fees and T&C apply. See https://payout-surge.live/ for details.

How to determine if you meet the FATCA threshold?

Step 1: Identify your specified foreign financial assets

Not everything you own abroad counts toward the FATCA threshold. Specified foreign financial assets include:

• Foreign bank accounts
• Foreign brokerage and investment accounts
• Foreign stocks, bonds, and securities not held in a US account
• Ownership interests in foreign partnerships, corporations, or trusts
• Foreign pension plans
• Life insurance policies with cash value issued by foreign insurers

At the same time, foreign real estate that you own in your name, physical foreign currency, precious metals, and personal property like vehicles or artwork don't count toward the FATCA threshold.

Step 2: Calculate the maximum value during the year

For each asset, figure out its highest value at any point during the tax year. For example, you can use year-end account statements for financial accounts you have at foreign financial institutions.

First, you'll need to convert all foreign currency amounts to USD using the Treasury Department's year-end exchange rates. Then, add up the maximum values of all your foreign financial assets. This total is what you compare against the FATCA threshold.

Step 3: Compare your total to the FATCA threshold

Check your total against both FATCA threshold amounts: the year-end threshold and the anytime-during-the-year threshold. If you exceed either one, you need to file Form 8938.

For example, let's assume you're single and living abroad.

On December 31, your foreign accounts totaled 190,000 USD. In July, they peaked at 310,000 USD. Even though your year-end balance is below the 200,000 USD threshold, you went over the 300,000 USD anytime threshold, so you need to file FATCA.

Penalties for non-compliance

The IRS imposes penalties if you don't file Form 8938 or if you file it incorrectly.

The initial penalty is 10,000 USD for each year you fail to file Form 8938 or file an incomplete or inaccurate form.¹

If you don't file after the IRS sends you a notice, an additional 10,000 USD penalty applies for every 30 days the failure continues, up to a maximum of 50,000 USD.¹

Plus, if failing to report a foreign asset leads to an understatement of tax, you'll face a 40% penalty on the underpaid tax amount.¹

In other words, non-compliance can bring serious financial consequences, so make sure to file FATCA on time. Sometimes, if you can demonstrate reasonable cause for your failure to file, the IRS may waive the penalties, but it's not something you should rely on.

Common mistakes and how to avoid them

Figuring out what your FATCA obligations are can be confusing. Make sure to watch out for these common mistakes:

• Confusing the year-end threshold with the anytime threshold—you need to check both, and going over either one triggers filing
• Forgetting to include jointly owned assets when calculating your total if you share an account with a spouse or family member
• Assuming FATCA and FBAR are the same thing when they're separate requirements with different thresholds and forms
• Using the wrong exchange rate when converting foreign currency to USD instead of the Treasury Department's official year-end rates

If you're unsure whether your assets meet the threshold or which assets to include, consult with a tax professional before filing.

---

If your foreign financial assets are over the FATCA threshold, you need to file Form 8938 with the IRS.

Thresholds range from 50,000 USD to 600,000 USD, depending on whether you live in the US or abroad and your filing status.¹

Keep in mind that you must check both the year-end threshold and the anytime-during-the-year threshold because going over either one triggers FATCA filing requirements.

If you live abroad or split your time between the US and another country, staying on top of requirements like FATCA is very important, but there's a lot more that goes into effectively managing your finances.

Many Americans lose an unfair amount of money on currency exchange rate markups and high transfer fees when moving funds between countries.

Often, banks charge 3% to 5% above the mid-market exchange rate, which adds up quickly on large amounts or if you need to transfer money regularly.

Instead of overpaying, try Wise.

Learn more about Wise

Sources

1. IRS - Summary of FATCA reporting for U.S. taxpayers

Sources checked 05/25/2026