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Level 2
posted Mar 11, 2025 12:19:58 AM

Foreign Bank Account & Interest

I am permanent resident of the U.S. but live overseas (Japan) since August 2024 but my husband lives in the U.S. and lived in the States for the entire year in 2024. We want to file married filling jointly.

I have a bank account of more than $100,000 in Japan (under my name only and my spouse does/did not have a foreign bank account) have a few questions about reporting the foreign bank account and interest earned on that account.

  1. Even if I am the only one who lives overseas and not my spouse, would we still be considered as “Taxpayers living outside the United States” if we are filling married filling jointly?
  2. Form 8938: according with the related instructions, since I am a “specified individual” (a permanent resident), but I am not sure if I met the reporting threshold, which depends on the answer on my question #1 above. Even if only one of the spouses lives abroad, we are considered as taxpayers living outside of the US for tax purposes, the reporting threshold is $400,000 or $600,000, meaning that I won’t have to report my foreign earned interest income and bank account?
  3. Are there separate forms to report 1. interest income and 2. foreign bank account or just form 8938?
  4. For the interest income earned my foreign bank account, I only made $59, do I still report this such low amount?
  5. Do I need to file FBAR based on my situation noted above? If so, am I filing BSA or BOI?

0 1 4893
1 Best answer
Expert Alumni
Mar 13, 2025 1:25:11 PM

 Yes, let's answer these questions individually.

 

 

  1. Taxpayers Living Outside the United States: If you are filing jointly with your spouse, and you meet the criteria for being a "taxpayer living outside the United States" (e.g., you are a U.S. permanent resident living abroad for at least 330 days in a 12-month period), you may qualify for the higher reporting thresholds for foreign financial assets. Your spouse's residency in the U.S. does not disqualify you from this status.
  2. Form 8938 Reporting Thresholds: As a married couple filing jointly, if you are considered taxpayers living outside the U.S., the reporting threshold for specified foreign financial assets is $400,000 on the last day of the tax year or $600,000 at any time during the year. If your foreign financial assets exceed these thresholds, you must file Form 8938. Based on your description, it seems your foreign bank account may not meet this limit. But you should check the total value of all foreign financial assets you have.
  3.  Interest Income: Report all interest income, regardless of the amount, on your Form 1040. Even $59 must be reported as it is considered taxable income.
  4. Foreign Bank Accounts: Form 8938 is used to report specified foreign financial assets if you meet the thresholds. Additionally, you may need to file an FBAR (FinCEN Form 114) if the aggregate value of your foreign financial accounts exceeds $10,000 at any time during the calendar year. 
  5. FBAR Filing Requirements: Since your foreign bank account exceeds $10,000, you are required to file an FBAR (FinCEN Form 114). This is filed electronically through the BSA E-Filing System. The FBAR is separate from Form 8938, and both may need to be filed if you meet the requirements for each.

1 Replies
Expert Alumni
Mar 13, 2025 1:25:11 PM

 Yes, let's answer these questions individually.

 

 

  1. Taxpayers Living Outside the United States: If you are filing jointly with your spouse, and you meet the criteria for being a "taxpayer living outside the United States" (e.g., you are a U.S. permanent resident living abroad for at least 330 days in a 12-month period), you may qualify for the higher reporting thresholds for foreign financial assets. Your spouse's residency in the U.S. does not disqualify you from this status.
  2. Form 8938 Reporting Thresholds: As a married couple filing jointly, if you are considered taxpayers living outside the U.S., the reporting threshold for specified foreign financial assets is $400,000 on the last day of the tax year or $600,000 at any time during the year. If your foreign financial assets exceed these thresholds, you must file Form 8938. Based on your description, it seems your foreign bank account may not meet this limit. But you should check the total value of all foreign financial assets you have.
  3.  Interest Income: Report all interest income, regardless of the amount, on your Form 1040. Even $59 must be reported as it is considered taxable income.
  4. Foreign Bank Accounts: Form 8938 is used to report specified foreign financial assets if you meet the thresholds. Additionally, you may need to file an FBAR (FinCEN Form 114) if the aggregate value of your foreign financial accounts exceeds $10,000 at any time during the calendar year. 
  5. FBAR Filing Requirements: Since your foreign bank account exceeds $10,000, you are required to file an FBAR (FinCEN Form 114). This is filed electronically through the BSA E-Filing System. The FBAR is separate from Form 8938, and both may need to be filed if you meet the requirements for each.