Which FATCA Forms Do I Need to File?

The Foreign Account Tax Compliance Act (FATCA) is a federal law enacted in 2010 designed to increase tax compliance by U.S. persons with accounts outside the United States. Its primary objective is to combat tax evasion by enhancing transparency for the Internal Revenue Service (IRS). The law achieves this by imposing reporting requirements on both individual U.S. taxpayers and foreign financial institutions (FFIs), which must report information about financial accounts held by U.S. taxpayers directly to the IRS.

Form for U.S. Taxpayers Reporting Foreign Assets

U.S. taxpayers with an interest in certain foreign financial assets are required to report them to the IRS using Form 8938, Statement of Specified Foreign Financial Assets. This form is part of the annual tax filing process for those who meet the specific reporting thresholds. The obligation to file is determined by the total value of your assets, your filing status, and whether you reside in the United States or abroad.

For taxpayers living in the U.S., filing is required if the total value of specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any point during the year. These amounts double for married couples filing a joint return, to $100,000 and $150,000, respectively. The thresholds are higher for taxpayers who are bona fide residents of a foreign country, starting at $200,000 for a single filer and increasing to $400,000 for married couples filing jointly.

The term “specified foreign financial assets” includes a wide range of holdings, such as:

• Financial accounts maintained by a foreign financial institution, like savings, deposit, checking, and brokerage accounts.
• Stock or securities issued by a foreign corporation.
• Any other interest in a foreign entity, including foreign partnership interests and foreign mutual funds.
• Any financial instrument or contract held for investment with a non-U.S. issuer or counterparty, such as foreign-issued life insurance or annuity contracts with a cash value.

When completing Form 8938, you must provide detailed information for each asset, including the name and address of the financial institution, the account number, and its maximum value during the tax year. Values must be reported in U.S. dollars, requiring conversion from the foreign currency using a consistent exchange rate. The form is attached to your annual income tax return, such as Form 1040. Failure to file Form 8938 can result in a penalty of $10,000, which can increase for continued non-compliance after IRS notification.

Forms for Certifying Tax Status to Institutions

Financial institutions, both in the U.S. and abroad, must determine the tax status of their account holders to comply with FATCA. This certification process involves specific forms that individuals and entities provide to the institution to declare their U.S. or non-U.S. tax status. The correct form to use depends on whether you are considered a U.S. person for tax purposes.

U.S. persons, including citizens and resident aliens, provide Form W-9, Request for Taxpayer Identification Number and Certification. By completing this form, you attest to your U.S. status and provide your Taxpayer Identification Number (TIN), which is your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). This allows the financial institution to document your status and avoid certain withholding requirements.

Non-U.S. persons use the W-8 series of forms to certify their foreign status. The most common for individuals is Form W-8BEN, which declares they are not a U.S. person. The form requires identifying information, country of tax residence, and a foreign tax identifying number. It also allows the individual to claim income tax treaty benefits, which can reduce or eliminate U.S. tax withholding on certain U.S. source income.

Foreign entities like corporations, partnerships, and trusts use Form W-8BEN-E to document their status under FATCA. On this form, the entity must identify its classification under FATCA regulations, such as a foreign financial institution or a non-financial foreign entity. This information helps the withholding agent determine its reporting and withholding responsibilities for payments made to the foreign entity.

Distinguishing Form 8938 from the FBAR

A common point of confusion for U.S. taxpayers is the distinction between Form 8938 and FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). These two forms arise from different laws, serve different purposes, and are submitted to different government agencies. A taxpayer may be obligated to file both, as filing one form does not satisfy the requirement to file the other.

The primary difference is the governing authority. Form 8938 is an IRS form mandated by FATCA provisions within the Internal Revenue Code. In contrast, the FBAR is a requirement under the Bank Secrecy Act and is filed with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

The FBAR reporting threshold is lower, requiring a filing if the total value of foreign financial accounts exceeds $10,000 at any time during the year. The types of assets reported also differ. The FBAR is specific to foreign financial accounts, while Form 8938 covers a broader category of specified foreign financial assets, including interests in foreign entities not held in an account.

Filing procedures and deadlines also differ. Form 8938 is attached to your annual income tax return and shares its due date, including extensions. The FBAR is filed electronically through FinCEN’s BSA E-Filing System and is due April 15, with an automatic extension to October 15. Taxpayers must assess their obligations for both forms independently.

Forms Used by Financial Institutions and Withholding Agents

The FATCA framework also relies on a system of reporting by institutions. Foreign Financial Institutions (FFIs) and U.S. withholding agents use specific forms to report information to the IRS, which is why they request tax status information from account holders.

The main form used by FFIs to report on their U.S. account holders is Form 8966, FATCA Report. Institutions use this form to transmit information about each reportable U.S. account, including the account holder’s name, address, U.S. TIN, account number, and year-end account balance.

U.S. withholding agents, like banks or brokerage firms, file Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. This form is used when making payments of U.S. source income, such as interest or dividends, to foreign persons. It reports the amount and type of income paid and any tax withheld, with copies sent to the foreign recipient and the IRS.

These institutional forms are not prepared or filed by the individual taxpayer whose assets are being reported; they are part of the compliance infrastructure that operates behind the scenes. The information you provide on a W-9 or W-8BEN is what allows these institutions to fulfill their own filing obligations with forms like the 8966 and 1042-S.