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Foreign Account Tax Compliance Act book, calculator.

FATCA Foreign Account Tax Compliance Act

Initiated in 2011, this new tax law required all U.S. persons (expats & U.S. residents) to disclose foreign financial assets (as defined by FATCA) on their U.S. tax return using the new Form 8938. FATCA was strengthened internationally in 2014 as over 145,000 non-U.S. financial institutions signed onto FATCA and the new International Data Exchange Service (IDES), which obligated these non-U.S. institutions to report the existence of U.S. persons who hold/held an account in their institution as far back as 1097 (Bank Secrecy Act).

What is an FFA (Foreign Financial Asset)?

  • Non-U.S. bank or brokerage firm assets (cash, stocks, bonds) not traded on a U.S. exchange
  • Ownership value in a non-U.S. business (corporation or partnership)
  • Pension or annuity from a private employer or business

What is Not a FFA?

  • Real Property
  • Your primary home
  • Vacation property
  • Rental income property
  • Social Security Benefits or Government Pension

Thresholds for Reporting FFAs

Single Filers

  • $200,000 year-end value of all FFAs combined
  • $300,000 value during the year of all FFAs combined

Married Joint Filers

  • $400,000 year-end value of all FFAs combined
  • $600,000 value during the year of all FFAs combined

Form 8938 is included with U.S. tax return filing.

Failure to file penalty, up to $50,000, is imposed for not including Form 8938 with your U.S. tax return if you meet the filing thresholds above.