Guide · 11 min read · 2026 edition
FEIE, FBAR, totalization, state tax, and the 7 forms every American abroad needs to know.
The US is one of two countries (with Eritrea) that taxes worldwide income for citizens. Filing keeps FEIE eligible and avoids penalties. Automatic 2-month extension to June 15 if you live abroad on April 15; further to October 15 with Form 4868.
Physical Presence Test (330 days outside US in any rolling 12-month period) OR Bona Fide Residence Test (a full calendar year resident elsewhere). FEIE excludes up to $130k (2025) of earned income from federal income tax. Doesn't cover SE tax, doesn't cover passive income.
FinCEN Form 114. Combined balance of all foreign accounts. Even if just briefly above $10k at any point. Filed separately at bsaefiling.fincen.treas.gov. Free, takes 15 minutes. Don't skip — penalties are enormous.
Live in a high-tax country (UK, France, Germany)? Income over $130k may benefit more from FTC than FEIE. Form 1116. Dollar-for-dollar credit against US tax for foreign taxes paid on the same income.
CA, NY, VA, NM are aggressive. Establish domicile in a no-tax state (TX, FL, NV, SD, WA) BEFORE moving abroad — DL, voter registration, mailbox, banking. Or fully establish residency in your foreign country, with treaty proof.
Your main return. Always required.
If self-employed. SE tax is 15.3% on worldwide self-employment income.
Foreign Earned Income Exclusion ($130k cap in 2025).
Foreign Tax Credit. Often pairs with or replaces FEIE.
Foreign account report. Threshold: $10k aggregate. Separate from tax return.
FATCA reporting. Threshold: $200k single / $300k joint at year-end (or 2x mid-year).
If you own ≥10% of a foreign corporation. Heavy form — get professional help.
Foreign disregarded entity (like a single-member foreign LLC).
Foreign trusts and large gifts from non-US persons over $100k.
Live in one of these and pay into their social security system? You can opt out of US SE tax via a Certificate of Coverage.
SnapBooks handles multi-currency income, FEIE-day tracking, and gives your expat accountant a clean Schedule C in 60 seconds.
Start freeYes. The US taxes citizens on worldwide income regardless of where they live. You file Form 1040 every year, even if you owe nothing. Skipping it can void FEIE and trigger penalties for missing forms like FBAR.
FEIE lets US citizens abroad exclude up to $130,000 (2025) of earned income from US income tax. You qualify by either the Physical Presence Test (330+ days outside the US in any 12-month period) or the Bona Fide Residence Test (a full tax year as a resident of another country). File Form 2555.
Yes — FEIE doesn't shield SE tax. The 15.3% Social Security + Medicare tax applies to self-employment income earned anywhere in the world. Exception: if you live in a country with a US Totalization Agreement (UK, Germany, Spain, Japan, Canada, etc.) and pay into their social security system, you can opt out with a Certificate of Coverage.
FBAR (FinCEN Form 114) reports foreign bank accounts. Required if the combined balance of all your foreign accounts exceeded $10,000 at any point during the year. Filed separately from your tax return, due April 15 (automatic extension to October 15). Penalties for missing it are severe — up to $10k per account per year.
States like California, New York, Virginia, and New Mexico are sticky — they keep taxing you until you formally establish residency elsewhere. Domicile change usually requires: new driver's license, voter registration, primary bank accounts, and severing ties (selling property, no spouse remaining there).
Yes, but not on the same income. Common strategy: use FEIE for income up to $130k, then use Foreign Tax Credit (Form 1116) on the income above the FEIE cap. Run both calculations — sometimes FTC alone is better, especially in high-tax countries like France or Germany.
At minimum: Form 1040, Form 2555 (FEIE) or 1116 (FTC), Schedule C if self-employed, Schedule SE, and FBAR. Add Form 8938 if foreign financial assets exceed $200k (single, end of year) / $300k (any time). Add 5471 if you own >10% of a foreign corporation. Add 8865 for foreign partnerships.
General information, not personalized tax advice. International tax is individual — work with a US expat tax professional.