By Dako
We have a bank account in Japan that earns nothing, owes nothing, and exists to pay for train tickets and dinners when we’re back. It’s in my name because Japanese banks don’t do joint accounts. Money goes in from the US through Wise before a trip and goes out during the trip. On no tax return in either country does it produce a single line of income.
Every year, I report it to the US Treasury anyway.
That’s the thing about the two reporting rules in this post. Neither cares whether the account made money. What they care about is whether it exists, and whether you told them. For a couple with one foot in each country, the accounts that trip these rules are usually the boring ones, and the mistakes come from being married rather than from being rich.
Two forms, two agencies, two thresholds
The first rule is the FBAR, officially FinCEN Form 114. If you’re a US person and the combined value of your foreign financial accounts went over $10,000 at any point in the year, you file. A green card holder counts as a US person. Not with your tax return. The FBAR goes to FinCEN, the Treasury’s financial crimes unit, through its own e-filing system, due April 15 with an automatic extension to October 15. It covers bank accounts, brokerage accounts, mutual funds, and insurance or annuity contracts with cash value. It also covers accounts you can sign on but don’t own.
The second rule is FATCA’s Form 8938, which rides along with your Form 1040. Its thresholds are higher and depend on where you live and how you file. A couple filing jointly from the US reports once foreign financial assets pass $100,000 at year end or $150,000 at any time during the year. Living abroad, those become $400,000 and $600,000. And 8938 reaches beyond accounts. A foreign pension or a defined-contribution plan is a specified asset even if you can’t value it. If no distributions have been made and the value isn’t known, the instructions say to report it at zero. A house you own directly in Japan isn’t reportable. The bank account holding the money to buy it is.
Filing one form doesn’t excuse the other. They come from different laws, go to different agencies, and neither one knows what you told the other.
Where couples like us get caught
The thresholds aren’t the hard part. What trips mixed-nationality households is that the obligations attach to individuals while the money is shared.
Start with the account in one spouse’s name, which is the Japanese default. The owner files. Nobody else has to, unless they have signature authority over it or what FinCEN calls a financial interest, and marriage alone doesn’t create either. Money is the gray area. When the non-owner spouse funded the account, or the couple treats it as shared, I couldn’t find guidance from FinCEN or the IRS saying whether that becomes a financial interest. Practitioners generally say no. The conservative move, if you’re unsure, is to report it, because over-reporting carries no penalty that I know of, and the reverse carries a large one.
Joint accounts run the other way. Each owner reports the full balance, not half. There’s a way for a couple to file one FBAR, and we went through its conditions in the joint-finances post. Every foreign account the non-filing spouse would report has to be joint, the filing has to be on time, and both of you sign Form 114a. One separately held account breaks it, for that spouse.
In our house both spouses file, and for different reasons. My Japan account is in my name, so it’s mine to report. Jay has a foreign account of his own, in his name, so he reports too. The couple shortcut was never available to us, and I suspect it’s unavailable to most international couples, because the whole point of a Japan account is usually that one of you is Japanese.
The third trap arrives later, if one spouse stops being a US tax resident. Say a couple moves to Japan and the Japanese spouse gives up the green card. The American spouse can still file jointly by electing to treat the nonresident spouse as a US resident, an election we’ve flagged before as a one-time choice. For the FBAR, that election changes nothing. Residency for FBAR purposes is decided under the tax code’s own residency test, without regard to the joint-return election, so the nonresident spouse stays outside it. For Form 8938, the opposite. A nonresident who makes that election becomes a specified individual and their foreign assets join the household’s 8938. Same couple, same election, two different answers. How the rest of that couple’s US return changes is a post of its own for later.
The penalty is for silence, not for tax
What makes people take these forms seriously is that the penalties attach to not filing, whether or not any tax was owed.
The current FBAR figure is $16,536 per non-willful violation, set in January 2025 and carried into 2026 because the government cancelled this year’s inflation adjustments. Willful failures run to the greater of $165,353 or half the account balance, with criminal exposure on top. One piece of good news arrived from the Supreme Court in February 2023. In Bittner v. United States, the Court held 5-4 that a non-willful penalty applies per report, not per account, so a forgotten year with five accounts is one violation, not five.
Form 8938 has its own schedule. Ten thousand dollars for not filing. Another $10,000 for each 30 days it stays unfiled beyond 90 days after the IRS asks, up to $50,000. Then a 40% penalty on any underpaid tax connected to the undisclosed assets, and a statute of limitations on your whole return that stays open until the form is filed.
One more change happened this summer that anyone with an old, unfiled FBAR should know about. For years the IRS published a Delinquent FBAR Submission Procedure. It was a public promise: if you’d reported all the income and paid the tax, filing the late FBARs with an explanation would draw no penalty. Around the end of June 2026, that page disappeared without an announcement. The internal manual still describes the practice, and the IRS’s FBAR page now just says to file late reports as soon as possible to keep penalties to a minimum. The guaranteed penalty-free door is gone. What replaces it is unclear, and I’d want a professional in the room before walking through whatever’s left.
What we actually do every year
The filing itself is dull, which is the point.
Once a year, I pull the statements for the Japan account and find the highest balance it hit. Every deposit came through Wise, so the transfer history is the easiest proof of when money arrived and how much. That maximum goes on the FBAR in dollars, converted at the Treasury’s year-end rate. A quick check against the joint 8938 thresholds follows. A trip fund doesn’t come close. The form goes to FinCEN, not to the IRS.
Jay’s account is his to report, so that FBAR is his own filing. Before either goes in, he sees the list: which accounts exist, in whose name, and the highest balance on each. We wrote about why that habit matters more than the form does.
Then there’s the side almost no US-focused guide mentions. Japan has its own disclosure rules. Every transfer over ¥1 million into or out of Japan is reported by the Japanese bank to the tax office, so a trip-fund deposit can already be on file there. And if we ever become Japanese residents, foreign assets above ¥50 million on December 31 trigger an annual overseas assets report, due the following June 30. Filing it or skipping it moves any later penalty by 5% in either direction. Two countries, two disclosure regimes, one set of accounts.
Two “what ifs” we’ve planned for
Neither of these has happened to us. Both are close enough that we’ve thought them through.
The first is a house. If we decided to buy in Japan, the sensible move would be to pool the money in the Japan account over some months. The purchase would settle in yen, from a Japanese account. The house itself would never appear on Form 8938. But an account holding a few hundred thousand dollars’ worth of yen puts a jointly filing couple in the US past the $100,000 year-end or $150,000 any-time threshold. That year’s return would carry an 8938 for the first time, and the FBAR would go in as usual, with a much larger number on it. That’s not a problem. It’s a calendar entry, and one we’d rather know about before the wire than after.
The second is the one we hope never to need. Suppose a couple discovers that a Japanese account or a cash-value insurance policy has gone unreported for years. The IRS’s Streamlined Filing Compliance Procedures still exist as of this writing. For a couple living in the US, that means three years of amended returns and six years of FBARs, plus a signed certification that the failure was non-willful. The penalty is 5% of the highest year-end total of the assets involved. For a couple living abroad who spent at least 330 days outside the US in one of the last three years, the same filings carry no penalty at all. We’ve never had to use either path. Knowing it exists is what lets us treat an old account as a paperwork problem instead of a panic.
FAQ
My Japanese spouse has a bank account in Japan in their name only. Do I report it?
If your spouse is a US person, they report it. You only report it if you can sign on it or have a financial interest of your own. Contributing money to it isn’t clearly a financial interest under current guidance, and if you’re unsure, reporting is the safer side.
Does filing Form 8938 mean I can skip the FBAR?
No. They go to different agencies under different laws. Meeting the 8938 threshold nearly always means you’ve met the FBAR threshold too, and both are due.
Are Japanese pension and insurance accounts reportable?
Cash-value life insurance and private annuity policies are treated as reportable on both forms. NISA and iDeCo accounts are generally reported as well, since the FBAR’s retirement-plan exception covers US plans, not foreign ones. Public pensions like kokumin nenkin aren’t accounts and aren’t reported.
What if my spouse becomes a nonresident and we still file jointly?
For the FBAR, the nonresident spouse stays outside the rule, because the joint-return election doesn’t count toward FBAR residency. For Form 8938, that same election makes them a specified individual, and their foreign assets count toward the household’s thresholds.
We missed a few years. What now?
The penalty-free delinquent FBAR procedure was taken off the IRS site in mid-2026, and the Streamlined procedures remain available with a 5% penalty for US residents and none for qualifying residents abroad. Talk to a professional before filing anything. The choice of path matters more than the speed.
This article is general information about US and Japanese reporting rules, not tax or legal advice. FBAR and FATCA obligations depend on your residency, your filing status, and the ownership of each account, and penalties are severe. Please consult a qualified professional before filing or correcting past filings, and see our Disclaimer for details.