Filing Taxes Abroad as U.S. Expats and Entrepreneurs
Living or working abroad as a U.S. citizen or business owner? Here are the answers to the most common tax questions to help you save time, money, and stress!
Even abroad you must file U.S. taxes on all your income, and you may also owe tax in your new country. To avoid paying twice you’ll need to follow special U.S. and local rules. Working with an expat‑tax expert helps you stay compliant and reduce your bill.
Double taxation happens when both your home country and the country where your employer is based want to tax the same income. For example, a U.S. citizen working for a German company must pay U.S. taxes on their entire income—and Germany may also tax them because the employer is located there.
U.S. expats avoid double tax by using the Foreign Tax Credit, the Foreign Earned Income Exclusion or applicable tax treaties. Each has its own rules, but they’re designed to reduce or eliminate tax in both countries.
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.
The FEIE is a rule that helps Americans living abroad lower their U.S. taxes. If you live and work outside the U.S. and qualify, you can exclude up to $130,000 of your foreign earned income in 2025 from U.S. income tax.
You qualify for the FEIE by living and working outside the U.S. and meeting one of two tests:
Live abroad for a full calendar year, or
Spend at least 330 days outside the U.S. in a 12-month period
Your income must come from working (a job or self-employment), 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.
It applies to U.S. citizens, residents, or green card holders who earned income abroad and paid foreign income tax. If the foreign tax is similar to U.S. income tax, it can help prevent being taxed twice on the same income.
FBAR is a separate report you must file if the total value of your foreign bank accounts goes over $10,000 at any point during the year. It applies to U.S. citizens, residents, and green card holders—even if you owe no tax. It’s due April 15, with an automatic extension to October.
The IRS Streamlined Catch-Up Program is for U.S. expats who didn’t know they were supposed to file U.S. taxes or FBARs while living abroad. It lets you get back into compliance without penalties, as long as the mistake was unintentional.
To use the program, you file:
The last 3 years of U.S. tax returns
The last 6 years of FBARs (foreign bank account reports)
One form (Form 14653) explaining that you didn’t file on purpose—you just didn’t know.
If done correctly, the IRS waives penalties and treats it as a clean catch-up. This is one of the safest ways for expats to fix past filing issues and move forward with peace of mind.
Who qualifies:
U.S. citizens, residents, or green card holders
Who lived outside the U.S. and failed to file by mistake (not on purpose)
Residency
Must have been outside the U.S. at least 330 days in one of the last 3 years
Who doesn’t qualify
Anyone under an IRS audit or criminal investigation
Anyone who intentionally hid income or accounts
There’s no strict deadline, but it’s a good idea to file as soon as you can to reduce interest charges and resolve any issues with the IRS quickly.
No, the Streamlined Procedures only cover federal taxes and FBAR requirements. If you owe state taxes, you'll need to handle those separately.
Avoid penalties for not filing tax returns and FBARs.
Fix past tax issues without worrying about criminal charges.
Get back in good standing with the IRS and enjoy peace of mind.
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 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:
Form 5471 – If you own 10% or more of a foreign corporation.
Form 8858 – If you own a foreign disregarded entity or foreign partnership.
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:
Taxes – The IRS may ask for a U.S. address on certain forms.
Mail – You can get important mail like tax documents and bank statements.
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, the right bank makes managing money abroad much easier. Popular options include:
HSBC – Easy global transfers
Charles Schwab – No foreign transaction fees + free worldwide ATMs
Citi – Strong international banking access
Capital One – No foreign transaction fees
Wise – Low-cost transfers and multi-currency accounts
Revolut – Digital banking with multiple currencies
Each option serves a different need, so choose based on how you earn, spend, and move money internationally.
Taxes abroad get complicated fast. If you’re not sure what applies to you, I can help.