U.S. Expats: Do You Still Need to File a Tax Return?

Moving abroad changes a lot — your address, your currency, maybe even your language. One thing it doesn’t change is your U.S. tax filing obligation. The United States taxes its citizens and green card holders on their worldwide income, no matter where they live.

The good news is that many Americans abroad owe little or no U.S. tax once they use the tools designed for them. But you have to file a return to claim them.

Who needs to file

If you’re a U.S. citizen or green card holder, you generally must file a federal return when your worldwide gross income exceeds the filing threshold for your filing status — the same thresholds that apply at home. If you’re self-employed, you must file once your net self-employment earnings reach $400, even if you owe no income tax.

Income earned abroad counts, even if your host country already taxed it and even if the money never reaches a U.S. bank account.

Your filing deadline

Americans living abroad get an automatic two-month extension to June 15 to file. Interest still runs on any tax due from April 15. If you need more time, you can request an extension to October 15.

Ways to avoid double taxation

Foreign Earned Income Exclusion (Form 2555)

You can exclude a substantial amount of foreign earned income — $130,000 for 2025, adjusted for inflation each year — if you qualify under one of two tests:

• Physical presence test: you were physically present in a foreign country or countries for at least 330 full days during any 12-month period.
• Bona fide residence test: you were a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year.

You may also be able to exclude or deduct certain foreign housing costs.

Foreign Tax Credit (Form 1116)

If you pay income tax to another country, you can generally claim a credit for it against U.S. tax on the same income. In higher-tax countries, the credit often wipes out U.S. tax entirely, and unused credits can be carried forward. Choosing between the exclusion and the credit — or combining them — is one of the most important decisions on an expat return.

Reporting foreign accounts: FBAR and FATCA

Separately from your income tax, you may need to report your foreign accounts:

• FBAR (FinCEN Form 114): required if the combined value of your foreign financial accounts exceeded $10,000 at any time during the year. It’s filed electronically with the Financial Crimes Enforcement Network, not the IRS, and is due April 15 with an automatic extension to October 15.
• Form 8938 (FATCA): filed with your tax return when your specified foreign financial assets exceed certain thresholds. For single filers living abroad, that generally means more than $200,000 on the last day of the year or more than $300,000 at any time during the year. The thresholds double for married couples filing jointly.

Penalties for missing these forms can be severe, even when no tax is owed.

Behind on your filings?

If you didn’t know you had to file, you’re not alone. The IRS Streamlined Foreign Offshore Procedures let many non-willful taxpayers catch up by filing the last three years of tax returns and six years of FBARs — generally without penalties for those who meet the non-residency requirement. Coming forward on your own is far better than waiting for the IRS to find you.

Other things to watch

• State taxes: some states keep treating you as a resident after you move abroad, depending on your remaining ties there.
• Self-employment tax: freelancers abroad may still owe U.S. Social Security and Medicare taxes unless a totalization agreement with their host country applies.
• Foreign investment funds: non-U.S. mutual funds and ETFs are often treated as passive foreign investment companies (PFICs), which bring complex reporting and unfavorable tax treatment.
• Family credits: expats with children may still qualify for the child tax credit, depending on how they handle their foreign income.

We work with Americans everywhere

Our U.S. expat tax services are fully virtual, with secure portals, e-signatures and video meetings across time zones. We prepare federal returns, FBARs and Form 8938, and we help clients catch up through the Streamlined Procedures. If you’ve already received an IRS notice, our IRS resolution team can help. Book a free consultation from wherever you are.