Frequently Asked Questions

Moving abroad affects your taxes in several ways. You'll still need to pay U.S. taxes on your worldwide income, and you may also owe taxes in your new country. There are special forms and rules to follow, so understanding both U.S. and local tax laws is key to staying compliant and avoiding being taxed twice. A tax expert like Sandra Morno, who specializes in expat taxes, can guide you through this process and help you save money.

Double taxation means paying taxes on the same income in two countries. For example, let’s say you live in the U.S. but work remotely for a company based in Germany. Both the U.S. and Germany may require you to pay taxes on the income you earn. This happens because the U.S. taxes its citizens on their worldwide income, and Germany might also tax you since the company paying you is located there.

U.S. taxpayers can avoid paying taxes twice on foreign income by using tools like the Foreign Tax Credit (FTC), the Foreign Earned Income Exclusion (FEIE), and tax treaties. Each option has its own rules, but when used correctly, they can lower or even eliminate taxes owed in both the U.S. and the other country. Working with a tax expert, like SSBM Consulting, can help you choose the best options and stay compliant with both U.S. and foreign tax laws.

Yes, if you're a U.S. citizen or Green Card holder, you must file taxes on your income, no matter where you live.

Your taxes are due on April 15, but if you’re abroad, you get an automatic extension to June 15. If you owe taxes, they're still due by April 15.

Not filing your taxes can lead to costly penalties, interest, and missed opportunities. The IRS may charge late fees and interest on any taxes you owe, which can add up quickly. You could also lose valuable benefits like the Foreign Earned Income Exclusion (FEIE), which helps reduce your U.S. tax bill on foreign income. Filing on time makes sure you are compliance and allows you to take advantage of these money-saving options. If you're unsure, a tax professional can help.

The Foreign Earned Income Exclusion (FEIE) lets you exclude paying U.S. taxes on up to $120,000+ of your income earned abroad in 2024 if you qualify. To use this benefit, you need to live outside the U.S. for most of the year. For example, if you earn $130,000 while living abroad and qualify, you’ll only pay U.S. taxes on $10,000. This can save you a lot of money, but you must meet certain rules to claim it.

You qualify for the FEIE if:

1. You’re a U.S. citizen or resident living and working in another country.

2. Your income comes from work (like a job or freelancing) in that foreign country.

3. You pass one of these tests:

   • Bona Fide Residence Test: You live in a foreign country for a full calendar year.

   • Physical Presence Test: You spend at least 330 days in a foreign country during any 12-month period.

It only applies to money you earn from work—not investments or retirement income.

The Foreign Tax Credit (FTC) allows you to reduce your U.S. taxes by the amount you paid in taxes to the country where you live or work. This helps you avoid paying taxes twice on the same income.

U.S. citizens, U.S. residents or Green Card holder who earned income in a foreign country and paid foreign taxes on that income. To qualify, you must meet certain conditions, like proving that the taxes you paid to the foreign country are similar to U.S. income taxes. It’s meant to help you avoid paying taxes twice on the same income—once in the foreign country and again in the U.S.

FBAR stands for Foreign Bank Account Report. It’s a form you must file with the U.S. government if you have foreign bank accounts and the total value of those accounts is more than $10,000 at any time during the year. This is separate from your regular tax return.

If you're a U.S. citizen, Green Card holder, or resident and meet this threshold, you need to file the FBAR to report those foreign accounts, even if you don’t owe any taxes on the money. Failing to file can lead to penalties, so it's important to keep track of your foreign accounts and file the FBAR on time.

It’s due by April 15 (with an extension to October).

You can file your own taxes, but expat taxes can be tricky. It’s best to get expert help like SSBM Consulting to make sure you’re following the rules and saving the most money.

Foreign income is any money you earn outside of the U.S., even if your clients are in the U.S. and you’re paid in U.S. dollars. This includes:

• Wages from a foreign job

• Income from a foreign business

• Interest, dividends, or rent from foreign sources

Yes, if you earn money from renting out property abroad, you must report it to the IRS. However, you may be eligible for credits or deductions that can reduce your U.S. tax.

Yes, if you earn income while living in another country and meet the necessary requirements, it may qualify for the Foreign Earned Income Exclusion (FEIE).

Yes, if you have a foreign business, you need to report it to the IRS. U.S. citizens and residents are required to report any foreign business activities. This includes filing forms like:

1. Form 5471 – If you own 10% or more of a foreign corporation.

2. Form 8858 – If you own a foreign disregarded entity or foreign partnership.

3. Form 926 – If you make certain investments in foreign corporations.

Even if your foreign business doesn’t owe U.S. taxes, failing to report it can lead to penalties. It’s important to stay compliant with IRS rules, so consulting a tax professional is a good idea.

Yes, you can deduct business travel expenses while abroad, including airfare, lodging, meals, transportation, and incidental costs, as long as the travel is for business purposes. Keep detailed records and receipts to support your deductions. It’s a good idea to consult a tax professional to make sure you’re following the rules.

You can use apps like Xero, Waevapps, Shoeboxed, Expensify, spreadsheets, or digital storage to track your business expenses and receipts. These tools can help you stay organized and make tax time easier.

Yes, if the space is used for your business. This includes things like memberships or daily fees.

It depends. A U.S. LLC or S-Corp might simplify taxes for a business owner living abroad, but you’ll also need to consider the tax rules and regulations in the country where you live.

It's important to consider both U.S. and local tax rules before making a decision.

If you earn money in different currencies, you need to report it in U.S. dollars when filing your taxes. To do this, you convert the foreign income into dollars using the exchange rate at the time you earned it. You can use the IRS exchange rates or an average rate for the year. Keep track of these conversions, and it's a good idea to talk to a tax professional for help

It’s not required but It’s a good idea to keep a U.S. address while living abroad for a few reasons:

1. Taxes – The IRS may ask for a U.S. address on certain forms.

2. Mail – You can get important mail like tax documents and bank statements.

3. Maintaining U.S. ties – Having a U.S. address can help show your connection to the U.S. for tax benefits.

You can use a family member's address, a mail forwarding service, or a virtual address if you don’t want a physical one.

While it’s not required, keeping a U.S. bank account can be very helpful. It makes it easier to:

• Receive payments from U.S. clients or businesses

• Pay U.S. bills or taxes

• Transfer money between the U.S. and your current country

Just keep in mind that some U.S. banks may have fees for international transactions, so it's worth checking with your bank.

If you're a U.S. expat, choosing the right bank is essential for managing your finances seamlessly across borders. Here are some top options:

• HSBC: Ideal for global banking with easy money transfers between countries.

• Charles Schwab: Enjoy no foreign transaction fees and free worldwide ATM access.

• Citi: Manage your U.S. accounts effortlessly with their international banking services.

• Capital One: No foreign transaction fees and robust online banking you can access anywhere.

• Revolut: A digital bank offering multi-currency accounts, perfect for managing money in different currencies.

Each bank provides unique features, so consider your financial needs and travel habits when making a decision.