Expat Shocker: Most Americans Abroad Are Filing Taxes Wrong — Don’t Be One of Them

So you ve moved abroad Maybe you re working remotely from Portugal teaching in Japan or just living the dream in Mexico Whatever your story is there s one thing you can t escape U S taxes Yep Uncle Sam still wants a check-in even if you haven t stepped foot in the States for years But before you start stressing let s walk through what indeed matters for expats like you in minus the tax jargon You re Still Required to File Even If You Don t Live in the U S It feels unfair but it s true if you re a U S citizen or green card holder you still have to file a tax return every single year no matter where you live You might not owe anything but the paperwork That part s still required You ve Got Extra Time to File But Not to Pay The IRS gives expats a little grace You automatically get until June to file your return But here s the catch if you owe anything it s due by April Miss that date and interest starts stacking up You Can Usually Exclude a Big Chunk of Your Foreign Income If you re working overseas the Foreign Earned Income Exclusion FEIE is your new best friend In you can exclude up to from your U S taxable income That means you might owe nothing but only if you file properly and claim it To qualify you have to Either spend full days abroad in a -month span Or prove that you ve settled long-term in another country High Rent You Might Be Able to Write It Off If you re living somewhere pricey like Paris or Hong Kong the Foreign Housing Exclusion might let you deduct rent and certain housing costs too It s a nice bonus for those shelling out big for an apartment abroad Already Paying Taxes Abroad There s a Credit for That Living in a country with high taxes You might not need the FEIE at all Instead you can use the Foreign Tax Credit which lets you apply what you ve already paid in foreign taxes toward your U S tax bill It s basically the IRS saying Okay fair enough The Standard Deduction Just Got Bigger For the standard deduction went up if you re single if you re married and filing together That s more income you don t have to pay taxes on which is invariably a win You Might Not Owe a Dime But You Still Have to File Here s the twist thanks to all these exclusions and credits preponderance expats don t end up owing anything to the IRS But skipping your return altogether Bad idea The fines can be steep even if your tax bill is zero Got Foreign Bank Accounts There s Extra Reporting If your overseas bank accounts add up to or more at any point in the year you need to file an FBAR yes that s a real form And if you ve got higher foreign assets think over K you may also need to file Form under FATCA rules It sounds annoying but it s not optional and the penalties for missing it are no joke Need More Time You Can File in October Still waiting on tax paperwork from your host country You can file Form and get an extension until October But remember this gives you more time to file not to pay If you owe that s still due in April There s Talk of Change But Nothing s Set Yet There s been specific political noise about ending citizenship-based taxation meaning only taxing people who live in the U S But for now It s just talk So unless something officially changes you re still expected to file each year no matter how far you roam Living abroad is amazing but it comes with particular fine print The good news The majority expats don t really owe anything and the IRS has tools to make sure you re not taxed twice You just need to file on time use the right exclusions or credits and keep an eye on your foreign accounts If you re overwhelmed don t sweat it There are tax professionals and expat-friendly services out there who can help Or if you want me to break down your specific situation I can help with that too