Form 8938 Statement of Specified Foreign Financial Assets 2020

What is the Form 8938 Statement Of Specified Foreign Financial Assets

The Form 8938, officially known as the Statement of Specified Foreign Financial Assets, is a tax form required by the Internal Revenue Service (IRS) for certain U.S. taxpayers. This form is designed to report specified foreign financial assets, which may include foreign bank accounts, stocks, and other financial instruments. Taxpayers must file this form if their total value of specified foreign financial assets exceeds certain thresholds, which vary based on filing status and residency.

How to use the Form 8938 Statement Of Specified Foreign Financial Assets

Using Form 8938 involves accurately reporting your specified foreign financial assets to the IRS. Begin by gathering information about your foreign financial accounts and assets. You will need to provide details such as account numbers, the maximum value of each asset during the year, and the name and address of the financial institution. Ensure that you meet the reporting thresholds before filing. The form can be filed electronically if you are e-filing your tax return, or it can be submitted as a paper form along with your annual tax return.

Steps to complete the Form 8938 Statement Of Specified Foreign Financial Assets

Completing Form 8938 involves several steps:

• Determine if you are required to file based on your asset thresholds.
• Gather necessary information about your foreign financial assets, including account details and maximum values.
• Fill out the form accurately, ensuring all required fields are completed.
• Review the form for accuracy and completeness before submission.
• File the form electronically or by mail as part of your tax return.

Filing Deadlines / Important Dates

Form 8938 must be filed along with your annual tax return. The typical deadline for individual tax returns is April 15, with extensions available until October 15. If you are required to file Form 8938, it is essential to adhere to these deadlines to avoid penalties. Keep in mind that if you are living abroad, different deadlines may apply, so it is important to check the IRS guidelines for your specific situation.

Penalties for Non-Compliance

Failing to file Form 8938 when required can result in significant penalties. The IRS imposes a penalty of $10,000 for failure to file, and additional penalties may apply for continued non-compliance after receiving a notice from the IRS. In some cases, taxpayers may also face criminal charges for willful failure to report foreign financial assets. Therefore, it is crucial to ensure compliance with all reporting requirements to avoid these consequences.

Eligibility Criteria

To determine your eligibility for filing Form 8938, consider the following criteria:

• You must be a specified individual, which includes U.S. citizens, resident aliens, and certain non-resident aliens.
• Your total value of specified foreign financial assets must exceed the reporting thresholds set by the IRS.
• You must have an interest in specified foreign financial assets, which can include bank accounts, stocks, and other financial instruments.