Guide

Taxes when you move abroad as an American

The US taxes citizens on worldwide income no matter where they live. That doesn't mean you pay tax twice — but it does mean you file in both places. This is the 80% of what you should know before the move, not legal advice.

You still file with the IRS

Every year, forever, as long as you keep US citizenship. The deadline is automatically extended to June 15 for expats. You file Form 1040 and usually Schedule B; you may also owe FBAR (FinCEN 114) if your foreign accounts ever exceed $10,000 combined in a year, and FATCA (Form 8938) at higher thresholds.

The two tools that prevent double taxation

Foreign Earned Income Exclusion (FEIE) — excludes roughly $126,500 (2024) of earned income if you meet the physical-presence or bona-fide-residence test. Foreign Tax Credit (FTC) — credits foreign income tax paid against US tax owed. You generally pick one based on whether your destination has higher or lower tax rates than the US.

Becoming a tax resident in your new country

Most countries make you a tax resident after 183 days in a calendar year, but rules vary (Portugal uses 183 days OR habitual residence; some countries use day-counting plus a center-of-vital-interests test). Once you're a tax resident, that country generally taxes your worldwide income, which is where the FEIE/FTC math matters.

When to hire a professional

First year abroad. Any year you have US self-employment income, capital gains, or rental property. Any year you change residency. The cost (usually $400–1,500) is small compared to the cost of a mistake on either side.

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