The Expat Tax Survival Guide

So, you moved overseas to live your dream — maybe it’s Bali, Berlin, or somewhere your dollars stretch like yoga pants. But guess who still wants a piece of your pie?

Yep, the IRS.

This post is your ultimate survival guide for staying tax-compliant as a U.S. expat. Because unlike your ex, the IRS doesn’t ghost.

💼 Do I Still Owe U.S. Taxes if I Live Abroad?

Short answer: Yes.

Long answer: Also yes, but with some asterisks.

If you’re a U.S. citizen or green card holder, you’re taxed on worldwide income — whether you earn it in Kansas or Kathmandu.

🧾 Forms You Can’t Ignore (Even If You Want To)

✅ Form 2555 – Foreign Earned Income Exclusion (FEIE)

This is the magical form that lets you exclude over $120,000 of income from your U.S. taxes in 2025 — IF you meet one of two tests:

• Physical Presence Test (you're out of the U.S. for 330 full days in a 12-month window)

• Bona Fide Resident Test (you're a legit resident of another country)

  
  

✅ Form 1116 – Foreign Tax Credit

If you're paying taxes in your host country, you may be able to claim a credit so you’re not double-taxed.

✅ FBAR (FinCEN 114)

Got more than $10,000 total across all foreign financial accounts? You’ve got to file this. No tax owed, just disclosure — and massive penalties if you ignore it.

✅ Form 8938 – FATCA

Kind of like FBAR’s nosier sibling. Higher thresholds, more financial asset disclosure. Required if your foreign financial assets exceed $50,000–$600,000 depending on your filing status and residency.

🧠 Don’t Forget These Painful Truths

• Moving to a tax-free country doesn’t make your U.S. tax go away

• You can get penalties for missing forms, even if you owe nothing

• The IRS has data-sharing agreements with 100+ countries

• Foreign crypto accounts? Yeah, they want those too

  
  

🧳 Who Does This Affect?

• Digital nomads

• U.S. citizens living abroad full-time

• Dual citizens

• Expats with foreign businesses, rental property, or bank accounts

• Basically: if you breathe outside U.S. borders and make money, this is for you

  
  

🔧 Real-Life IRS Horror Story

Jake moved to Switzerland, earned $450K in CHF, and forgot to convert it for tax purposes. Years later, he repatriated the money, triggered a currency gain, and got hit with a 5 digit tax bill — even though he thought he’d already paid taxes abroad. Click here for that post.

✅ Quick Survival Checklist

• Know your residency status

• Track income in USD equivalents

• File Form 2555 or 1116

• Report foreign accounts (FBAR + FATCA)

• Stay on top of filing deadlines (expats get an automatic 2-month extension, but interest still accrues)

• Consider hiring a pro who gets international tax (like us, obviously)

  
  

  Need help untangling your U.S. expat tax mess?

  
  

  Let’s get your forms filed, your accounts clean, and your penalties avoided.

  
  

  👉 Book a free consultation now