What U.S. Expats Should Know About Taxes Abroad

Sunsets in Spain. Pasta in Italy. Life abroad has plenty of perks—but tax season isn’t one of them.

For U.S. citizens and Green Card holders, filing taxes doesn’t stop at the border. The IRS still expects a tax return each year, and for those living internationally, the rules can feel less like a checklist and more like a scavenger hunt—complete with acronyms (FBAR, FATCA) and evolving regulations.

Why Are Expatriate Taxes So Complicated?

The U.S. is one of the few countries that taxes based on citizenship rather than residency. That means even if you haven’t set foot stateside all year, you may still have to file—and depending on your situation, you could have multiple reporting obligations.

Common areas that trip people up include:

• Income tax filings: Missteps around residency status or foreign-earned income exclusions can cost thousands.
• Foreign bank accounts (FBAR): If your combined account balances top $10,000 at any point during the year, you’re required to report them.
• FATCA reporting: You may also need to disclose foreign investments—failure to do so can result in steep penalties.
• Business ownership abroad: If you own more than 10% of a non-U.S. company or trust, that needs to be reported too.

And then there’s the planning side: making sure your decisions today don’t create surprises in future tax years.

Finding the Right Guidance

Because expatriate taxation is so specialized, many expats seek out professionals with deep experience in this space.

U.S. tax law is already complicated—and when you layer in treaties, multiple currencies, and foreign reporting requirements, it becomes even more important to get things right.

Smith Patrick’s team has worked with clients in more than 80 countries, helping them stay compliant, reduce their risk of penalties, and make sense of the tax rules that apply abroad.

From first-time filers to those catching up after a few missed years, our team is familiar with the real-world challenges that come with international living.

What the Expat Tax Process Typically Looks Like

Every expat’s situation is different, but a thoughtful approach usually includes:

1. An initial consultation to get a clear picture of residency status, income sources, and financial accounts.
2. A thorough compliance review, including required forms like FBAR, Form 2555 (Foreign Earned Income Exclusion), and Form 8938.
3. Planning ahead to optimize tax outcomes and avoid surprises down the road—whether you’re staying abroad long-term or planning a move back.

A Note from Those Who’ve Been There

Many expats come to us unsure of where to begin—especially if they’ve fallen behind on U.S. filings. With the right guidance, catching up doesn’t have to be overwhelming.

“I had moved to the UK several years prior and missed a few U.S. tax returns. Smith Patrick helped me reconcile past years and stay current—even when my situation changed again with a move to Switzerland.” — Kristine Kelly, expatriate

Wherever you are in the world, filing from abroad doesn’t have to be stressful. With experienced support, expat taxes can be one less thing to worry about.