US tax for Americans abroad
US citizens and residents are taxed on worldwide income, wherever they live. Here is what usually matters, in plain English.
Foreign Earned Income Exclusion (Form 2555)
Exclude up to $130,000 of foreign earned income for 2025 if you meet the bona fide residence or physical presence test. It does not cover investment income, and self-employment tax can still apply.
Foreign Tax Credit (Form 1116)
Credit US tax by the income tax you paid to a foreign country. Often better than FEIE in high-tax countries or when income exceeds the exclusion.
FBAR (FinCEN 114)
Required if foreign financial accounts exceeded $10,000 combined at any time in the year. Due 15 April with an automatic extension to 15 October.
FATCA (Form 8938)
Filed with your return when specified foreign assets exceed thresholds that depend on where you live and your filing status.
Common questions
Do I have to file if I live abroad?
Generally yes, if your income exceeds the filing threshold. Living abroad gives an automatic two-month extension (to 15 June) but interest accrues on tax owed from 15 April.
FEIE or Foreign Tax Credit?
It depends on your country's tax rate, your income level and your future plans. Choosing one can affect later years, so get advice before electing.
Do I owe self-employment tax abroad?
Often yes: FEIE does not reduce self-employment tax. Totalization agreements with some countries can change this.
What if I missed FBAR or past returns?
There are IRS programs for catching up, and penalties differ for non-willful cases. Talk to a CPA or EA before filing anything.
Estimate your expat tax now
Switch on "I live abroad" in the estimator and see the effect of FEIE immediately.
General information for tax year 2025, not tax advice. Rules and thresholds change; confirm with a professional.