Expats and U.S. Citizens Abroad

Yes. The U.S. taxes its citizens on worldwide income regardless of where they live. As long as you're a U.S. citizen or green card holder and your income is above the filing threshold, you file a U.S. return every year — whether you live in London, Tokyo, Buenos Aires, or Nairobi. The FEIE and Foreign Tax Credit usually prevent double taxation, but the filing itself is not optional.

The FEIE (Form 2555) allows qualifying Americans abroad to exclude up to roughly $126,500 (2024, adjusted annually) of foreign earned income from U.S. tax. To qualify you must meet either the Physical Presence Test (330 full days outside the U.S. in a 12-month period) or the Bona Fide Residence Test (a tax year of established residency in a foreign country). Investment income, rental income, and U.S.-source income don't qualify.

It depends on the tax rate where you live. In a high-tax country (Germany, France, UK, Canada, Australia), the Foreign Tax Credit usually delivers better results because you can use the foreign taxes you already paid to offset U.S. tax with no income cap. In a zero-tax or low-tax jurisdiction (UAE, Dubai, some Singapore situations), the FEIE usually wins. I run both calculations during return prep and pick whichever produces the lower total tax.

Both apply to expats. FBAR (FinCEN 114) is required if the aggregate value of your foreign accounts crossed $10,000 at any point during the year. Form 8938 (FATCA) kicks in at higher thresholds ($200,000–$600,000 for expats depending on filing status). Most expats file FBAR every year and Form 8938 when account values grow. Both have serious penalties if skipped.

You're in a fixable situation, not an emergency — as long as your non-filing was non-willful. The IRS Streamlined Foreign Offshore Procedures let eligible expats come into compliance by filing the last three years of tax returns and six years of FBARs with a non-willfulness certification. For most people with no willful intent, this results in zero penalties — just the back taxes (usually minimal or zero for expats) and interest. The sooner you start, the better your options.

Not necessarily. The U.S. has bilateral totalization agreements with about 30 countries (most of Europe, Japan, Korea, Australia, Canada, etc.) that prevent double Social Security taxation and let you count credits across systems. If you work in a country with a totalization agreement, you generally only pay into one system. Countries without an agreement can mean paying both.

This depends entirely on which state you left and how clean the exit was. California, New York, New Mexico, South Carolina, and Virginia are aggressive about pursuing former residents who maintain any ties. Clean-break states like Texas, Florida, and Washington have no state income tax at all. I help clients document residency termination properly when they leave and assess ongoing state filing obligations year to year.

Yes — the entire engagement runs remotely through a secure client portal. Document exchange, review meetings via video call, and return delivery all happen online. No need to visit a U.S. office.

Americans abroad get an automatic extension to June 15 (from April 15), with further extension to October 15 available on request. However, any tax owed is still due April 15 — the extension is for filing, not for payment. FBAR follows the same schedule (April 15 with automatic extension to October 15).