Form 8938 is the tax form that’s used for reporting specified financial assets if the total value of the assets is more than the appropriate threshold. Form 8938 can be seen as an information return that’s attached to Forms 1040, 1041, 1065, or 1120.
Pretty much any taxpayer who has foreign financial assets that bring them money must file Form 8938 to report the assets. Although Form 8938 might be under looked as it’s filed along with the FBAR form, it must be filed as the IRS needs to see it on your federal income tax return.
See 2024 Form 8938
In this article, we will go over the basic instructions to file Form 8938, explain a little bit more on what it’s about, and tell you how you can file a copy of it.
A Guide to File Form 8938
Form 8938 for the 2024 tax season is made up of six different sections. Here is a part by part instructions on how to file Form 8938 for your federal income tax return.
1. Foreign Deposit and Custodial Accounts Summary
This is the part where you will report the IRS about the deposit accounts and the custodial accounts, enter their value, and whether or not the accounts were closed during the tax year.
2. Other Foreign Assets Summary
Provide the information about the other foreign assets and their value, and state whether or not any these assets were sold during the tax year.
3. Summary of Tax Items Attributable to Specified Foreign Financial Assets
In this section of Form 8938, report the foreign deposit and custodial accounts while entering the amounts and the type of tax items they are such as interest, dividends, royalties, deductions, credits, and gains (or losses).
4. Excepted Specified Foreign Financial Assets
If you reported foreign financial assets in either one of the forms shown in this section (Forms 3520, 3520-A, 8621, 5471, 8865), enter the number of forms filed for the tax year
5. Detailed Information for Each Foreign Deposit and Custodial Account Included in the Part I Summary
As the title of the section suggests, you will provide a detailed information for the foreign assets reported on the first part of Form 8938.
6. Detailed Information for Each “Other Foreign Asset” Included in the Part II Summary
The same as part five, give detailed information about the foreign assets, but not about part one, but part two as the title of the section proposes.
Once Form 8938 is filed, attach it to your federal income tax return and make sure to take in the money amounts that are reported on the form and are taxable to your gross income. Otherwise, you will have to amend your tax return in 2024.