Americans living abroad face unique tax challenges, as they must comply with both U.S. tax laws and those of their host country. Erin Collins, head of the Taxpayer Advocate Service, highlighted these issues as serious problems for expatriates.
U.S. citizens are required to report their worldwide income to the IRS, but they may not necessarily face double taxation due to provisions like the foreign earned income exclusion, which allows eligible taxpayers to exclude up to $132,900 of foreign income from U.S. taxes for the 2026 tax year.
However, this exclusion requires specific qualifications, and taxpayers must file a U.S. tax return to claim it. Additionally, Americans abroad may need to file a Report of Foreign Bank and Financial Accounts (FBAR) if their foreign financial accounts exceed $10,000 at any point during the year.
Tax experts recommend that individuals consult with professionals knowledgeable about both U.S. and foreign tax systems to avoid unexpected liabilities. As college student Reese Charron discovered, understanding these obligations is essential before making the decision to live overseas