U.S. Tax Preparation Worldwide James Maertin CPA
Tax Guide
Capital Gains, Interest and Dividends
Education Credits, Scholarships
Social Security, Medicare, Self Employment Tax
Tax Deadlines, Extensions, Late Payments, Estimated Tax
Tax Resident, Nonresident, Dual Status
U.S. Citizens and Resident Aliens Abroad
If you are a U.S. citizen or resident alien living abroad, your worldwide income is generally subject to U.S. income tax, regardless of where you live. You are typically allowed the same deductions as taxpayers living in the United States, except that foreign property tax is no longer deductible as an itemized deduction. Mortgage interest (including on a foreign home) remains deductible, and charitable contributions are deductible only if made to qualified U.S. charities.
You must file a U.S. tax return each year if your income meets the minimum filing requirements. You are considered a resident alien for tax purposes if you meet either the green card test or the substantial presence test.
To get started, please complete the tax questionnaire.
Ways to Reduce or Eliminate U.S. Tax While Living Abroad
Your U.S. tax liability may be reduced or eliminated through:
Foreign Earned Income Exclusion (FEIE) Up to $130,000 per qualifying person for 2025. If both spouses work abroad, each may qualify separately.
Foreign Housing Exclusion/Deduction Generally beneficial if you rent your home abroad.
Foreign Tax Credit (FTC) A dollar-for-dollar credit for foreign income taxes paid.
You may qualify for the FEIE if your tax home is in a foreign country, you have foreign earned income, and you meet either the bona fide residence test or the physical presence test.
Physical Presence Test
You meet the physical presence test if you are physically present in one or more foreign countries for 330 full days during any 12-month period, and your tax home is in a foreign country. The 330 days do not need to be consecutive.
If your qualifying 12-month period falls entirely within the calendar year, you may claim the full FEIE of $130,000 for 2025. Married couples who both work abroad may each qualify for the full exclusion.
If your 12-month period spans two calendar years, your exclusion must be prorated. For example, August 1, 2025 July 31, 2026 results in a 2025 exclusion of $54,493 (153/365 ื $130,000).
Income earned during business trips to the United States generally cannot be excluded and will reduce your FEIE.
If your foreign earned income exceeds the FEIE, you may also qualify for the foreign tax credit and/or the foreign housing exclusion. Sometimes it is more beneficial to use the foreign tax credit instead of the FEIE. However, revoking the FEIE generally prevents you from claiming it again for five tax years.
Bona Fide Residence Test
If you are a bona fide resident of a foreign country for an entire calendar year, you do not need to meet the physical presence test. You may take longer trips to the U.S. and still qualify.
The maximum FEIE for 2025 is $130,000. Income earned during U.S. business trips is generally not excludable. Excess income may qualify for the foreign tax credit or foreign housing exclusion. Revoking the FEIE triggers the same five-year restriction described above.
If You Do Not Meet Either Test
Your only option is to claim the foreign tax credit for foreign income taxes paid. If the foreign tax rate is higher than the U.S. rate, you may receive a full credit. If the foreign tax rate is lower, you may owe the difference. Income earned while working in the U.S. for a foreign employer is not eligible for the foreign tax credit unless a treaty provides an exception.
Tax Treaties
U.S. tax law generally prevents double taxation through the FEIE and the foreign tax credit. Most tax treaties include a saving clause, which allows the U.S. to tax its citizens and residents as if the treaty did not exist. However, treaties often contain limited exceptions that may benefit U.S. taxpayers abroad.
Foreign Bank Account Reporting (FBAR)
You must file an FBAR (FinCEN Form 114) if the aggregate value of your foreign financial accounts exceeded $10,000 at any time during the year. The FBAR is filed electronically, is not filed with your tax return, and is due April 15 with an automatic extension to October 15.
Form 8938 Statement of Specified Foreign Financial Assets
You may need to file Form 8938 with your tax return if your foreign financial assets exceed certain thresholds. There is overlap between Form 8938 and the FBAR.
Self-Employment Tax
Even if you exclude all of your earned income for income tax purposes, you may still owe self-employment tax. You may be exempt if a totalization agreement exists between the U.S. and your country of residence and you are covered by that countrys social security system. See also
Contributing to a U.S. IRA While Abroad
To contribute to an IRA, you must have earned income equal to or greater than your contribution. If you exclude all of your income under the FEIE, you cannot contribute to an IRA. Any contribution made without eligible income is subject to an excise tax each year until withdrawn.
A workaround is to choose a 12-month physical presence period that does not give you a full exclusion, leaving enough earned income to qualify. Income earned during U.S. business trips may also provide sufficient earned income.
Filing Jointly With a Foreign Spouse
If you are married to a nonresident spouse, you may file as married filing separately, head of household (if eligible), or married filing jointly. To file jointly, you must elect to treat your spouse as a U.S. resident. Your spouse must report worldwide income and foreign accounts and must obtain a SSN or ITIN. The election generally remains in effect until ended or suspended.
Reporting Foreign Unearned Income
U.S. citizens and resident aliens must report all worldwide income, including foreign unearned income such as interest, dividends, capital gains, rental income, and foreign pensions. The foreign tax credit may offset some or all of the foreign taxes paid.
Green Card Holders
Green card holders are taxed on worldwide income. Additional resources include maintaining permanent residence, international travel rules, Form I‑407, and IRS expatriation tax guidance.
Expatriate Tax Deadlines
April 15 Tax payment deadline; FBAR due.
June 15 Automatic filing deadline for taxpayers abroad.
October 15 Extended filing deadline (if extension filed).
Federal Tax Withholding While Abroad
If your employer is withholding U.S. federal tax while you are working abroad, you may submit Form 673 if you expect to qualify for the FEIE.