FBAR vs. FATCA: What's the Difference and Do You Need Both?

FBAR and FATCA are the two most confusing acronyms in expat tax compliance. Both involve reporting foreign financial accounts. Both carry steep penalties for non-compliance. And most Americans abroad need to file both.

But they are not the same thing.

Let me break down exactly how they differ and what each one requires from you.

Quick Answer: What's the Difference?

FBAR (Foreign Bank Account Report) is a report you file with the U.S. Treasury's FinCEN to disclose foreign bank accounts.

FATCA (Foreign Account Tax Compliance Act) requires reporting specified foreign financial assets to the IRS on Form 8938 as part of your tax return.

They overlap significantly — but they go to different agencies, have different thresholds, cover different assets, and have different deadlines.

The Complete Comparison

What Each One Covers

This is where it gets tricky. The two reports don't cover the same assets:

FBAR Covers:

• Foreign bank accounts (checking, savings)
• Foreign securities/brokerage accounts
• Foreign mutual funds
• Foreign insurance policies with cash value
• Accounts where you have signature authority

FATCA (Form 8938) Covers:

• Everything the FBAR covers, plus:
• Stock or securities issued by a non-U.S. entity (even in a U.S. account)
• Foreign partnership interests
• Foreign trust interests
• Foreign-issued life insurance and annuities
• Foreign hedge funds and private equity

Neither Covers:

• Foreign real estate held directly (not through an entity)
• Personal property abroad
• Foreign currency held physically (cash in a safe)

Real-World Scenarios

Let me walk through a few common situations:

Scenario 1: A Simple Expat Bank Account

Maria lives in Spain and has a checking account at BBVA with a maximum balance of $15,000 during the year.

• FBAR: Yes — exceeds the $10,000 threshold
• FATCA: No — well below the $200,000 threshold

Scenario 2: Multiple Accounts Adding Up

David lives in Germany. He has a Deutsche Bank checking account ($25,000), a German brokerage account ($180,000), and a German pension ($50,000). Total: $255,000.

• FBAR: Yes — aggregate exceeds $10,000
• FATCA: Yes — total exceeds $200,000 year-end threshold

Scenario 3: Foreign Stocks in a U.S. Brokerage

Lisa lives in the U.S. and holds $60,000 in stocks of a London-listed company through her Fidelity account.

• FBAR: No — the account is at a U.S. institution
• FATCA: Possibly — foreign-issued securities can trigger Form 8938 even in a U.S. account

Scenario 4: Signature Authority on Employer's Account

Tom is a manager at a company in Japan and has signature authority over the company's Japanese business bank account worth $500,000.

• FBAR: Yes — signature authority triggers FBAR reporting
• FATCA: No — FATCA only covers assets in which you have a financial interest

The Overlap Zone

For most Americans abroad with significant foreign accounts, both reports are required. Here's how the overlap works:

The key takeaway: if you need to file FATCA, you almost certainly need to file the FBAR too. But the reverse isn't true — many people file the FBAR without needing Form 8938.

Common Mistakes

Filing one and thinking you're covered for both. I see this constantly. Someone files their FBAR diligently every year but has never attached Form 8938 to their tax return — or vice versa.

Double-counting the thresholds. The FBAR's $10,000 threshold is aggregate — all accounts combined. FATCA's threshold applies to total specified foreign financial assets. Same concept, very different numbers.

Forgetting the FBAR is filed separately. Your CPA files your tax return with Form 8938 included, and you assume you're done. But the FBAR must be filed separately through the BSA E-Filing System. No one files it for you unless you specifically ask.

Not reporting accounts with zero balance. If you had a foreign account that crossed the $10,000 aggregate threshold during the year — even if it's empty on December 31 — you still need to report it on the FBAR.

What Happens If You Haven't Filed?

If you've been missing one or both filings, the Streamlined Filing Compliance Procedures are your best path to getting current. The program requires:

1. Filing 3 years of delinquent or amended tax returns (with Form 8938 if needed)
2. Filing 6 years of FBARs
3. Certifying that your non-compliance was non-willful

Under this program, FBAR penalties are generally waived and Form 8938 penalties aren't assessed. It's the cleanest way to catch up.

For more details, read our guide on what to do if you haven't filed in years.

Frequently Asked Questions

Which one is more important to file?

Both are important, but FBAR penalties tend to be more aggressive in practice. The $10,000 per account, per year penalty for non-willful FBAR violations adds up fast. File both, but if you had to prioritize, don't skip the FBAR.

Can my tax preparer file both for me?

Your tax preparer files Form 8938 as part of your return. The FBAR requires separate authorization — make sure you explicitly ask if they're handling it. Some preparers include FBAR filing in their services; others don't.

I closed my foreign accounts. Do I still need to file?

If your accounts exceeded the thresholds at any point during the year before you closed them, yes — you still need to file for that year.

Do crypto accounts on foreign exchanges count?

FinCEN has proposed regulations that would require reporting virtual currency accounts at foreign exchanges on the FBAR, but no final rule has been issued yet. For FATCA, the IRS has indicated foreign exchange accounts may also be reportable. Best practice: report foreign exchange accounts on both to be safe — there's no penalty for over-reporting.

The Bottom Line

FBAR and FATCA are two separate requirements that happen to cover similar ground. Think of it this way: the FBAR is a simple account disclosure with a low threshold. FATCA is a broader asset report with a higher threshold that's part of your tax return.

Most Americans abroad with meaningful foreign finances need both. The filing itself isn't complicated — the hard part is knowing they exist in the first place.

Not sure where you stand? Let's review your accounts and make sure you're covered on both fronts.