US Expat Taxes in 2026: What Americans Living Abroad Need to File

Americans living abroad generally remain subject to US tax filing rules because the United States taxes US citizens and resident aliens on worldwide income. Living overseas does not automatically mean you will owe US federal income tax, but you may still need to file Form 1040 and separate foreign-account or foreign-asset reports.

For the 2025 tax year filed in 2026, the main expat rules to know are the Foreign Earned Income Exclusion (FEIE), Foreign Tax Credit (FTC), FBAR, FATCA Form 8938, and the special filing deadlines available to qualifying taxpayers abroad.

US Expat Taxes at a Glance

For many Americans abroad, US tax compliance involves several separate questions:

◾ US income tax return: You may need to file Form 1040 based on your worldwide gross income and filing status.
◾ Foreign Earned Income Exclusion: Qualifying taxpayers can exclude up to $130,000 of foreign earned income for tax year 2025. The limit rises to $132,900 for tax year 2026.
◾ Foreign Tax Credit: Foreign income taxes paid to another country may qualify for a credit against US tax.
◾ FBAR: Required when the aggregate value of foreign financial accounts exceeds $10,000 at any time during the calendar year.
◾ FATCA Form 8938: A separate foreign-asset reporting requirement with higher thresholds for qualifying taxpayers living abroad.
◾ State taxes: Moving abroad does not necessarily end state tax residency. Each state has its own residency, domicile and income-source rules.
◾ Deadlines: Many qualifying taxpayers abroad receive an automatic extension to June 15, although interest on unpaid federal income tax can still run from the regular April deadline.

If you are unfamiliar with how international borders alter your tax footprint, read our foundational guide: What Is Tax Residency? Your Questions Answered.

Do US Expats Have to File US Taxes?

Usually, yes if your income meets the applicable IRS filing threshold.

The important distinction is between having to file a US tax return and actually owing US federal income tax. An American employee in Germany, a founder living in the UAE and a retiree in Portugal can all remain within the US tax system even after becoming tax resident somewhere else.

For the 2025 tax year filed in 2026, most taxpayers under 65 generally need to file once gross income reaches:

◾ Single: $15,750
◾ Married filing jointly: $31,500
◾ Head of household: $23,625
◾ Married filing separately: $5

Other filing rules can apply at lower income levels — for example, people with sufficient net earnings from self-employment or certain foreign reporting obligations. Gross income for filing purposes can also include foreign income even when you later qualify to exclude some of it.

Paying tax in another country does not automatically remove the US filing requirement. Instead, Americans abroad commonly use provisions such as the Foreign Earned Income Exclusion or Foreign Tax Credit to reduce double taxation.

US Expat Tax Deadlines in 2026

For a 2025 calendar-year return, the regular federal filing deadline is April 15, 2026.

Qualifying US citizens and residents living abroad receive an automatic two-month extension to June 15, 2026 if, on the regular due date, they are living outside the United States and Puerto Rico and their tax home is also outside the United States and Puerto Rico. A statement explaining that the conditions are met should be attached to the return.

An additional extension to October 15, 2026 can generally be requested using Form 4868.

The extension does not make April irrelevant: interest can still accrue on federal income tax not paid by the regular April deadline.

Foreign Earned Income Exclusion: How the FEIE Works

The Foreign Earned Income Exclusion allows qualifying Americans abroad to exclude a limited amount of foreign earned income from US federal income tax.

For the 2025 tax year, the maximum FEIE is $130,000 per qualifying person. For 2026 income, the limit increases to $132,900. The exclusion must be claimed on Form 2555; simply earning income abroad does not make it automatically tax-free.

To qualify, you generally need a foreign tax home and must meet either:

Physical Presence Test

You must be physically present in one or more foreign countries for at least 330 full days during a period of 12 consecutive months.

The 12-month period does not have to match the calendar year, which makes accurate travel-day records particularly important for frequent travellers.

Bona Fide Residence Test

You must be a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.

Unlike the Physical Presence Test, this is not determined by day count alone. The IRS considers the facts and circumstances of your residence abroad.

What About the Foreign Housing Exclusion?

Qualifying taxpayers may also be able to exclude or deduct part of their foreign housing costs. For 2025, the standard limit on qualifying housing expenses is $39,000, while the base housing amount for a full qualifying year is $20,800. That makes the standard maximum housing amount $18,200 before other applicable limitations. Higher expense limits can apply in designated high-cost locations.

For 2026, the standard housing-expense limit rises to $39,870 and the base housing amount to $21,264.

FEIE vs Foreign Tax Credit: Which One Should Expats Use?

The FEIE and Foreign Tax Credit solve the double-tax problem in different ways.

Foreign Earned Income Exclusion

◾ Excludes qualifying foreign earned income from US taxable income.
◾ Requires Form 2555.
◾ Requires a foreign tax home plus the Physical Presence Test or Bona Fide Residence Test.
◾ Can be particularly relevant when foreign income tax is low or zero.
◾ Does not apply to passive income such as dividends or capital gains.

Foreign Tax Credit

◾ Gives a credit for certain qualifying foreign income taxes paid or accrued.
◾ Is generally claimed using Form 1116 when required.
◾ Can apply to several categories of foreign-source income.
◾ Is often particularly relevant for Americans living in higher-tax jurisdictions.

The two rules can interact, but you cannot claim a Foreign Tax Credit for foreign taxes attributable to income you excluded under the FEIE.

There is another important trade-off for families: if you claim the foreign earned income exclusion, foreign housing exclusion or foreign housing deduction, you cannot claim the Additional Child Tax Credit for that year.

There is no universal answer to “FEIE or FTC?” The better result depends on your income type, country of residence, foreign taxes paid, family situation and other parts of your US return.

FBAR vs FATCA: What Americans Abroad Need to Report

FBAR and FATCA are separate reporting regimes, and some expats need to file both.

FBAR

You generally need to file FinCEN Form 114 if the aggregate value of your foreign financial accounts exceeds $10,000 at any point during the calendar year.

The $10,000 threshold applies to all relevant accounts combined, not to each account separately.

FBAR is filed separately from your federal income tax return through the BSA E-Filing System. Whether the foreign account generated taxable income does not determine whether it must be reported.

FATCA Form 8938

Form 8938 is filed with your federal tax return and applies to specified foreign financial assets. For qualifying taxpayers living outside the United States, the thresholds are generally:

◾ Unmarried or married filing separately: more than $200,000 on the last day of the year or more than $300,000 at any time during the year.
◾ Married filing jointly: more than $400,000 on the last day of the year or more than $600,000 at any time during the year.

FBAR and Form 8938 overlap in some areas, but filing one does not automatically satisfy the other.

Do US Expats Still Owe State Tax?

Possibly. Moving abroad does not automatically end your relationship with your former US state.

State rules differ significantly. They can depend on domicile, statutory residency, the location of your home and family, the source of your income and the steps you took when leaving.

California, for example, does not allow the federal Foreign Earned Income Exclusion for California income-tax purposes. New York, by contrast, generally allows the federal foreign earned income exclusion when the applicable requirements are met.

The practical lesson is simple: do not assume that qualifying for the FEIE automatically eliminates state filing or state tax obligations.

◾ Moving From California to Florida: How Your Taxes Change ◾ Do Nonresidents Pay NYC Tax? How to Track and Prove New York Workdays

Other US Tax Issues Expats May Need to Check

The broad filing rules above cover many Americans abroad, but some situations create additional reporting requirements.

These can include:

◾ foreign mutual funds or ETFs that may fall under the PFIC rules;
◾ ownership or control of foreign companies;
◾ foreign trusts, pensions or retirement accounts;
◾ self-employment and social-security obligations;
◾ US-source income;
◾ tax residency in more than one country.

These issues are highly fact-specific and should not be treated as simple extensions of the FEIE or FTC rules. ◾ Tax Residency vs Domicile vs Residence Permit
◾ The Hidden Exposure of Dual Tax Residency

What If You Have Lived Abroad but Never Filed US Taxes?

Missing past US filings does not automatically mean every expat should simply submit old returns in the normal way.

The IRS offers Streamlined Foreign Offshore Procedures for certain eligible taxpayers residing outside the United States whose failure to report foreign income, assets or accounts resulted from non-willful conduct.

For qualifying taxpayers, the procedure generally requires:
◾ tax returns for the most recent three years for which the filing deadline has passed;
◾ delinquent FBARs for the most recent six years for which the FBAR deadline has passed;
◾ payment of applicable tax and interest;
◾ a certification that the failure was non-willful.

Eligibility matters. Someone who intentionally avoided reporting income or accounts should not assume the streamlined procedures are available and should obtain professional advice before filing.

Frequently Asked Questions

Do US citizens living abroad have to file US taxes?

Usually yes if their worldwide gross income reaches the applicable IRS filing threshold or another filing requirement applies. Living abroad does not by itself end US federal tax obligations.

How much foreign income can a US expat exclude in 2026?

The Foreign Earned Income Exclusion is $130,000 for tax year 2025, which is the return most taxpayers file in 2026. For income earned during tax year 2026, the FEIE increases to $132,900.

Do I need an FBAR if I live abroad?

You generally need an FBAR if the combined value of your foreign financial accounts exceeds $10,000 at any time during the calendar year. The threshold applies to the aggregate value of the accounts, not separately to each account.

Can I claim both FEIE and the Foreign Tax Credit?

Potentially, but not for the same excluded income. Foreign taxes attributable to income excluded under the FEIE cannot also be used for the Foreign Tax Credit.

Does the FEIE eliminate US state tax? Not necessarily. State rules are separate from federal rules and vary significantly. Moving abroad or qualifying for the federal FEIE does not automatically terminate state residency or state filing obligations.

What if I have not filed US taxes for several years while living abroad?

Some non-willful taxpayers who meet the IRS non-residency and other eligibility requirements may qualify for the Streamlined Foreign Offshore Procedures. The procedure generally covers three years of tax returns and six years of FBARs.