Q: Do I need to file Form 8938 for $50K-$75K in foreign assets after returning to the U.S.?
I lived and worked in Korea for several years and returned to the U.S. in late September 2023. Before 2024, I had between $50K and $75K in my foreign bank account. I am concerned about whether I needed to file Form 8938, given the physical presence test from September 2022 to September 2023, which seemed to set my reporting threshold at $200K.
Additionally, I began working in the U.S. from October to December 2024. I am now worried about potentially facing a $10K fine for not filing Form 8938. I have not filed any other tax forms related to foreign assets or income since returning to the U.S., nor have I consulted anyone about my obligations.
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A:
Your situation involves multiple tax factors that need careful consideration regarding Form 8938 filing requirements.
For the 2023 tax year, your filing threshold depends on your residency status when you returned from Korea in September. The standard threshold for U.S. residents is $50,000 on the last day of the tax year or $75,000 at any time during the year for single filers, while the threshold for those living abroad is $200,000 on the last day of the tax year. Since your foreign account balance falls between $50,000-$75,000 and you returned to the U.S. before year-end, you might indeed have been required to file Form 8938 with your 2023 tax return.
You should consider filing Form 8938 as soon as possible if you were required to do so, as the IRS may reduce penalties for those who voluntarily come forward. Additionally, you may also need to file an FBAR (FinCEN Form 114) if your foreign accounts exceeded $10,000 at any point during the calendar year. The physical presence test you mentioned typically relates to the Foreign Earned Income Exclusion (Form 2555), which is separate from Form 8938 requirements. I recommend consulting with a tax professional who has experience with international tax matters to review your specific situation and determine your filing obligations.
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