U.S. Expat Taxes: Guidance for Americans Living Abroad

Understanding U.S. Expat Taxation

Most countries tax based on residence. The United States is different — it taxes based on citizenship. That means every U.S. citizen and Green Card holder must file an annual federal tax return (Form 1040) no matter where they live or earn income.

If you live abroad, you may also need to report foreign bank accounts (FBAR), disclose overseas investments (FATCA Form 8938), and meet additional IRS requirements depending on your income level and assets.

However, you can often reduce or eliminate double taxation using credits and exclusions such as:

Foreign Earned Income Exclusion (FEIE, Form 2555) – up to $130,000 in 2025 (adjusted annually).

Foreign Tax Credit (Form 1116) – credit for foreign taxes paid.

Foreign Housing Exclusion – additional relief for rent and living costs abroad.

Who this Guidance is for

This content is designed for:

U.S. citizens and Green Card holders living abroad

Digital nomads and remote workers earning from multiple countries

Entrepreneurs and freelancers running U.S. or global businesses

Dual citizens with U.S. filing obligations

Creators and online professionals who generate income while traveling

Even if you pay taxes locally, the IRS still requires you to report worldwide income. Correct filing ensures you avoid penalties and stay compliant with both U.S. and foreign authorities.

Digital Nomads, Bloggers & Remote Professionals

Not all Americans abroad are traditional expats. Many are self-employed or earn online through remote work, digital marketing, or content creation. The same U.S. tax rules apply, but the structure of your business can change your exposure to income and self-employment tax.

Learn how to:

- Separate personal and business income while abroad.

- Deduct legitimate travel and work expenses.

- Determine if your activity qualifies as a business under IRS hobby rules.

- Use accounting software to maintain compliant records across currencies.

Avoiding Double Taxation and Penalties

The U.S. has tax treaties and totalization agreements with many countries, but understanding which reliefs apply can be complex. Late or incorrect filings can trigger penalties, especially for FBAR or FATCA.

Working with a qualified expat tax professional ensures you remain compliant and avoid unnecessary exposure. Antravia supports Americans abroad with accurate, transparent filing and practical accounting guidance across borders.

U.S. Citizens Who Own a Foreign Company (UK Ltd, GmbH, FZCO, etc.)

If you live abroad and operate through a foreign company, your U.S. tax requirements can change significantly.

Owning a non-U.S. company often triggers additional IRS reporting, including Form 5471, foreign-entity classification rules, and potential GILTI exposure.

This is a specialist area of U.S. international tax that goes beyond standard expat filing. If you own a foreign company or recently incorporated one, read our new guide:

➡ U.S. Citizens Owning a Foreign Company: What the IRS Really Requires

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