As a US citizen or green card holder living overseas, you are still required to file an annual US tax return. Yes, even if you haven’t visited America in years or paid taxes in your current location, Uncle Sam expects to hear from you.
1. Yes, You Still Must File U.S. Taxes
The U.S. is one of the only nations that taxes citizens on citizenship, not residence. That’s right: you’ll have to file a yearly tax return with the IRS — regardless of where you reside.
You’ll have to report income from all over the globe, including:
- Foreign wages or salary
- Self-employment income
- Rental income
- Investment income
2. Familiarise Yourself with the Key Filing Requirements
Here’s what most Americans living abroad will need to file:
- Form 1040 – U.S. standard tax return
- Form 2555 – To take the Foreign Earned Income Exclusion (FEIE)
- Form 1116 – To take the Foreign Tax Credit, if you incurred taxes in your host nation
- FBAR (FinCEN 114) – If your foreign bank accounts exceed $10,000 at any time during the year
- FATCA (Form 8938) – If you own foreign assets that surpass specified limits
3. Most Important Tax Benefits for Expats
Overseas living does not equate to double taxation. You can often lower or eliminate your U.S. tax bill with:
Foreign Earned Income Exclusion (FEIE)
Excludes foreign earned income up to $120,000+ (increased annually for inflation).
Foreign Tax Credit (FTC)
Entitles you to a credit for taxes paid to a foreign country.
Housing Exclusion
Assists if you reside in an expensive city by excluding some of your housing costs.
4. Tax Deadlines for Expats
- April 15 – Deadline to file regular tax return
- June 15 – Automatic expat extension (no request required to file)
- October 15 – Last deadline if you filed Form 4868
Reminder: Just because you have an extension, any amount due is still due April 15 to prevent interest.
5. Traps to Avoid
- Failure to file at all – Believing that since you’re living overseas, you’re off the hook? Nope.
- Missing FBAR – This document has severe penalties if overlooked.
- Incorrectly claiming FEIE and FTC simultaneously – Timing and planning are everything.
- Forgetfulness of state taxes – Certain states attempt to tax you after you depart.
- Tax software that doesn’t address expat concerns – Routine tax software usually doesn’t address expat requirements adequately.
6. How Expat Tax Online Can Help
Expat Tax Online focuses on assisting Americans in filing taxes abroad. Their experts know the special tax regulations, reporting, and planning rules that apply to expats.
Wherever you’re living abroad–teaching in Spain, freelancing in Bali, or retired in Portugal–Expat Tax Online can:
- Prepare your return quickly and accurately
- Comply with FBAR and FATCA
- Minimise exclusions and credits to maximise reductions (or zero) of tax due
- Catch up on if you’ve missed previous filings
And the best part? You can do it all 100% online, no phone calls or office visits required.
FAQs: Filing American Taxes Abroad
Do I have to pay U.S. taxes if I already pay foreign taxes?
Perhaps. But with the Foreign Tax Credit, you can frequently lower or eliminate what you owe to the IRS.
What is the consequence if I don’t file my U.S. taxes from abroad?
You risk penalties, interest, and loss of eligibility for tax benefits. If you owe, consider the IRS Streamlined Filing Program.
Can I obtain a refund if I reside overseas?
Yes, particularly if you’re eligible for credits such as the Child Tax Credit or the American Opportunity Tax Credit (for education).
Do I need to report foreign bank accounts?
Yes — if your aggregate foreign account balances were over $10,000 during the year, you have to file an FBAR.
I am self-employed overseas. Do I owe U.S. self-employment tax?
Yes — even if you omit your income under FEIE, self-employment tax still applies unless you have a totalization agreement with your host country.
Bottom Line
Reporting U.S. taxes while abroad is not a choice, but it doesn’t have to be intimidating either. Armed with the right forms, clever leveraging of tax savings, and professional guidance from firms like Expat Tax Online, you can remain in compliance and steer clear of expensive errors.
Get started with help? Expat Tax Online will walk you through it, get everything filed correctly, and make tax time as easy as possible — wherever in the world you call home.
