Do bank accounts, wealth products and insurance in China go on Form 8938? Thresholds, FBAR differences and penalties

Form 8938 is the Statement of Specified Foreign Financial Assets required by FATCA (the Foreign Account Tax Compliance Act), filed with your 1040. "Specified individuals" file it: U.S. citizens, green card holders and other tax residents. Since the 2016 tax year, certain passive U.S. companies, partnerships and trusts ("specified domestic entities") file too. If you don't have to file an income tax return for the year, you don't file Form 8938.

Many clients first hear of Form 8938 when tax software or a preparer asks how much they have in accounts in China. Like the FBAR, it's an every-year check: if your assets pass the threshold, it goes in with the return.

• Specified individuals: U.S. citizens; noncitizens who are tax residents for all or part of the year (green card holders and people who meet the substantial presence test); nonresident aliens who elect to file jointly with a spouse and are treated as residents; and certain residents of American Samoa and Puerto Rico.
• Nonresidents don't file: a nonresident alien filing Form 1040-NR generally isn't a specified individual.
• Specified domestic entities: a U.S. corporation or partnership at least 80% owned by a specified individual with at least half of its income or assets passive (interest, dividends and the like), and certain U.S. trusts with a specified person as a beneficiary. Their threshold is $50,000 at year-end or $75,000 at any time.
• No return, no Form 8938: if your income is below the filing threshold and you don't have to file, you don't file Form 8938 even if your foreign assets pass its threshold (the FBAR is a separate question).
• Income doesn't matter: an account that earned nothing all year still counts if your assets pass the threshold.

The thresholds depend on your filing status and whether you live abroad, and each has a year-end number and an any-time number. Pass either one and you file. Single filers living in the U.S.: $50,000 / $75,000. Single filers living abroad: $200,000 / $300,000. Joint filers double both.

Description: Find your filing status and where you live, convert all your foreign financial assets to dollars and add them up. If you pass either number, you file.

Filing status	Living in U.S.: year-end over	Living in U.S.: any time over	Living abroad: year-end over	Living abroad: any time over
Single	$50,000	$75,000	$200,000	$300,000
Married filing jointly	$100,000	$150,000	$400,000	$600,000
Married filing separately	$50,000	$75,000	$200,000	$300,000
Specified domestic entity	$50,000	$75,000	—	—
No income tax return required	No Form 8938	No Form 8938	No Form 8938	No Form 8938

• Two ways to be "living abroad": you're a U.S. citizen who is a bona fide resident of a foreign country for an uninterrupted period that includes the whole tax year, or you're a U.S. citizen or resident who was outside the U.S. for at least 330 full days in any 12 consecutive months ending in the tax year.
• Everything is added together: the test uses the total of all your specified foreign financial assets, not each account on its own.
• Joint ownership: on a joint return, jointly owned assets count once at full value. If you file separately and both spouses are specified individuals, each counts half.
• Assets already on Forms 5471, 8621, 3520 and similar: they still count toward the threshold (see below).
• No inflation adjustment: these figures have been the same since 2011, and they're unchanged for 2026.

Two broad groups count: accounts at foreign financial institutions, such as bank deposits, brokerage accounts and cash-value policies in China; and foreign assets held for investment outside an account, such as shares of a foreign company you hold directly, foreign partnership interests and interests in foreign trusts. Real estate you hold directly, cash, gold and jewelry, foreign government social security-type benefits and accounts at U.S. financial institutions don't count.

If I already filed Form 5471, 8621 or 3520, do I repeat the assets on Form 8938?

• No need to list them again: an asset already reported on Form 3520, 3520-A, 5471, 8621 or 8865 isn't itemized again on Form 8938. You note in Part IV which forms you filed and how many.
• They still count toward the threshold: specified individuals include those assets when testing the threshold (specified domestic entities don't).
• Only if you actually filed them: if you should have filed Form 5471 and didn't, you can't rely on this rule.

They're two agencies with two sets of rules. The FBAR goes to FinCEN, kicks in when your foreign accounts total more than $10,000, and covers only financial accounts. Form 8938 goes to the IRS, has much higher thresholds, but reaches further, including assets outside accounts such as foreign shares you hold directly. The same account can belong on both, and filing one doesn't excuse the other.

For FBAR filing details, see yclcpa.com/fbar.

Form 8938 reports each asset's maximum value during the year, generally at fair market value, and you can rely on periodic statements. Convert foreign currency at the U.S. Treasury (Bureau of the Fiscal Service) rate for the last day of the tax year. If Treasury didn't publish a rate for that currency, use another publicly available rate and say where it came from.

• Accounts: you can use monthly or quarterly statement balances to find the maximum value, unless you know they don't reasonably reflect it.
• Insurance and annuities: use the cash (surrender) value.
• Foreign company shares: use fair market value; if you don't know it, a reasonable estimate method is acceptable.
• Foreign pensions and estates: use the fair market value of your beneficial interest at year-end. If you don't know it and can't reasonably get it, use the distributions you received during the year, or zero if there were none.
• Foreign trusts: the distributions you received during the year plus the value of mandatory distributions owed at year-end, or the method in the instructions if you don't have the information.
• Negative values are zero: if an asset's maximum value is below zero, report zero.
• One rate for everything: convert every asset at the Treasury rate for the last day of the tax year, even an asset you sold mid-year.

Example (hypothetical numbers, to show the method): Mr. Zhang is single, lives in North Carolina, and held three assets in China and Hong Kong in 2026. Assume the Treasury rate for December 31, 2026 is $1 = RMB 7.1 and HK$7.8 (use Treasury's actual published rate).

The year-end total of $83,893 already passes $50,000, so he files Form 8938 for 2026 and reports each asset's maximum value. All three are foreign financial accounts totaling more than $10,000, so he files an FBAR too, and the wealth product needs a PFIC check. If he were married filing jointly with only these assets, $83,893 at year-end wouldn't pass $100,000. The any-time test looks at the combined balances on the same day; if you're unsure, filing is the cautious choice.

Deposits, brokerage accounts, wealth products and cash-value insurance in China generally count toward Form 8938, and so do shares of a company you hold directly. A home you hold directly doesn't. Social insurance, the housing provident fund and annuity plans need item-by-item review; don't assume they're exempt.

Not filing a complete and correct Form 8938 on time costs $10,000. If you still haven't filed 90 days after an IRS notice, $10,000 more applies for each 30 days, up to an additional $50,000, for a maximum of $60,000. Underpayments tied to undisclosed foreign assets carry a 40% accuracy penalty. The statute of limitations doesn't start on a year without Form 8938, and if you omit more than $5,000 of income from these assets, the statute runs 6 years instead of 3.

• Starting penalty: $10,000 per year, whether or not any tax was underpaid.
• Continuation: if you haven't filed 90 days after the IRS mails a notice, $10,000 more for each 30 days (or part of 30 days), up to an additional $50,000.
• 40% accuracy penalty: an underpayment attributable to an undisclosed foreign financial asset draws 40% (IRC §6662(j)) instead of the usual 20%. Fraud draws 75%.
• The statute doesn't start: under IRC §6501(c)(8), if you don't file Form 8938 or leave an asset off, the assessment period for that year doesn't end until 3 years after you file it. With reasonable cause, the extension covers only related items.
• 6-year statute: if you omit more than $5,000 of income attributable to specified foreign financial assets, the statute is 6 years (IRC §6501(e)(1)(A)(ii)), regardless of how large the omission is relative to your income.
• Reasonable cause: no penalty applies if you show reasonable cause and not willful neglect. Foreign laws that penalize disclosure don't count as reasonable cause.
• The FBAR is separate: each form carries its own penalties, so missing both on the same account creates exposure on both.

Start by asking whether income was missed. If all income was reported and only Form 8938 is missing, and the IRS hasn't contacted you, file it with a Form 1040-X under the Delinquent International Information Return Submission Procedures (DIIRSP), with a reasonable cause statement. If interest, wealth product income or other income was missed and it wasn't willful, look at the streamlined procedures (SFOP / SDOP). If it was willful, talk to an attorney first.

• Only Form 8938 is missing: attach it to a 1040-X under DIIRSP, even if no numbers change on the return, with a reasonable cause statement (see yclcpa.com/diirsp). Relief isn't guaranteed.
• Income was missed: if interest, wealth product income or dividends from China weren't reported and it wasn't willful, streamlined covers 3 years of returns (with Form 8938 and every other information return) and 6 years of FBARs (see yclcpa.com/sfop). The SDOP 5% penalty base includes assets that should have been on Form 8938.
• Handle the FBAR at the same time: if Form 8938 was missed, the FBAR usually was too. Fix both together so the numbers match.
• Sooner is better: the statute never starts on a year without the form; it starts once you file.

Go asset by asset: the institution's name and address, the account number, the date opened or acquired, the maximum and year-end values, the year's income (interest, dividends, gains), and any accounts opened, closed, bought or sold during the year. Chinese statements and phone screenshots are fine; we do the conversion and organizing.

Description: The top half lists what to gather for each asset; the bottom half shows the key dates.

① What to gather for each asset

Document	Used for
Institution name and address (Chinese and English), account or policy number	Form 8938 Part V / VI, FBAR
Dates opened, acquired, closed or sold	The opened or closed boxes on Form 8938
Maximum balance or value during the year (statements)	Both Form 8938 and the FBAR report the maximum
December 31 balance or value	The Form 8938 year-end threshold
Interest, dividends, wealth product income and sale gains for the year	Income on your 1040; the income amount and where it's reported on Form 8938
Cash value statement for insurance	Valuing the policy
Ownership percentage and valuation support for company shares	Valuing foreign stock; possibly Form 5471

② Timeline

When	What to do
January–February 2027	Download December 2026 statements and the full-year history; get policy cash value statements
Around January 2027	Look up Treasury's rate for December 31, 2026 and convert everything at that rate
April 15, 2027	1040 and Form 8938 due (extendable to October 15); FBAR due (automatic extension to October 15)
All year	Keep records of new accounts, closed accounts and large transfers for next year's filing

Check the thresholds in Figure 1, then whether all your income was reported, and find your situation below.

• Situation A: you just got a green card or became a tax resident. From the year you become a resident, your accounts and assets in China count toward Form 8938 and the FBAR. In a dual-status year, look carefully at the resident portion.
• Situation B: your assets hover around the threshold. Recheck Figure 1 every year using the December 31 Treasury rate, and look at the maximum during the year too. Exchange rate swings alone can put you over one year and under the next.
• Situation C: all income was reported, but Form 8938 wasn't filed. File it with a 1040-X under DIIRSP with a reasonable cause statement (yclcpa.com/diirsp).
• Situation D: interest and wealth product income weren't reported either. If non-willful, look at streamlined and fix Form 8938 and the FBAR together (yclcpa.com/sfop).
• Situation E: you're a U.S. citizen or green card holder living abroad. If you meet the living-abroad test, the threshold rises to $200,000 / $300,000 ($400,000 / $600,000 joint). The FBAR threshold is still $10,000.