US expat tax checklist: FBAR, FATCA, PFIC, FEIE, GILTI
A neutral walk-through of the US tax obligations that follow American citizens abroad — what they are, when they bite, and how the mainstream planning around each one actually works.
Last verified: 2026-04-24. Neutral reference — we take no referral fees or sponsorships.
The United States taxes citizens and green-card holders on worldwide income regardless of where they live. Moving abroad does not remove your US tax obligations — it adds new ones. This checklist covers the main US-side items US persons abroad should track. None of this is tax advice; consult a qualified cross-border specialist before acting.
1. Form 1040 still applies
You continue to file a federal tax return on worldwide income every year you are a US person, regardless of residence. The filing deadline is automatically extended to 15 June for US taxpayers living abroad, with further extensions available via Form 4868. Most states release you once you cease state residence, but California, New Mexico, South Carolina, and Virginia apply stricter tests — check your last-residence state's domicile rules.
2. FBAR (FinCEN 114)
Separate from the income tax return. File annually if the aggregate maximum balance of your foreign financial accounts exceeded USD 10,000 at any time during the calendar year. This includes foreign bank accounts, brokerage, crypto exchanges that hold fiat-equivalent balances, and most pension-like instruments. Penalties for non-filing are severe — up to USD 10,000 per non-wilful violation and much more for wilful. See FATCA glossary.
3. FATCA (Form 8938)
Separate from the FBAR despite the overlap. File with your Form 1040 if specified foreign financial assets exceed thresholds: USD 50,000/100,000 (single/joint filing in the US) or USD 200,000/400,000 (single/joint abroad) — year-end or USD 75,000/150,000 any-time single/joint in US; USD 300,000/600,000 abroad any-time. Higher thresholds for those abroad, but still triggered by modest foreign pension or brokerage balances. See FATCA.
4. FEIE (Foreign Earned Income Exclusion)
Via Form 2555, excludes up to USD 130,000 (2025) of foreign-earned income from federal income tax, per qualifying individual. Requires either the Physical Presence Test (330 full days outside the US in any 12-month period) or the Bona Fide Residence Test (tax home in a foreign country for an uninterrupted period that includes a full calendar year). FEIE covers wages and self-employment earnings only — not dividends, interest, rents, pensions, or Social Security. Self-employment tax (15.3%) still applies on top of FEIE for sole proprietors. See 183-day rule for day-counting nuances.
5. Foreign Tax Credit (Form 1116)
Usually a better option than FEIE for US persons in high-tax countries (most of Europe). Offsets US tax dollar-for-dollar against foreign tax paid on the same income. Does not have the 330-day physical-presence requirement. FEIE + FTC cannot double-cover the same dollars — pick the better outcome per category of income.
6. PFIC trap (Form 8621)
The big one. Foreign mutual funds, UCITS ETFs, money-market funds, and many offshore holding companies are classified as Passive Foreign Investment Companies under US tax law. US persons holding PFIC shares face punitive default taxation, onerous annual Form 8621 reporting per fund held, and loss of capital-gains treatment. The standard workaround is to hold US-domiciled index funds in a US brokerage account and never buy foreign-registered funds. See PFIC glossary entry.
7. GILTI + Subpart F (Form 5471)
If you own 10%+ of a foreign company, you are a US Shareholder of a Controlled Foreign Corporation once US ownership exceeds 50%. GILTI forces current-year US taxation on most of the foreign company's earnings; Subpart F sweeps up certain passive and related-party income categories. Form 5471 reporting is among the most complex in the US tax code. A §962 election can reduce the rate significantly for individual shareholders. See GILTI and Subpart F glossary entries.
8. Totalization Agreement coverage
The US has bilateral social-security agreements with ~30 countries that prevent dual social-security taxation. If you are self-employed or paid by a US employer while abroad, the agreement determines which country's system applies. Obtain a Certificate of Coverage from the governing country's social-security administration to document the exemption.
9. Foreign retirement accounts
UK SIPPs and ISAs, Canadian RRSPs and TFSAs, Australian Super — each is treated differently under US tax rules. Some qualify for treaty-based deferral (UK SIPPs, Canadian RRSPs per treaty), others do not (TFSAs, ISAs, Australian Super typically). Contributions, earnings, and distributions may each trigger distinct US consequences. Always check treaty language.
10. Renunciation (IRC §877A exit tax)
Terminating US citizenship triggers the §877A exit tax if you are a "covered expatriate": net worth over USD 2M, average annual tax liability over USD 201,000 (2024), or uncertified 5-year tax compliance. Treats most assets as if sold the day before expatriation, with gains above a USD 866,000 (2024) exclusion taxed at normal rates. See exit tax glossary.
Practical summary
Americans living abroad face a genuinely unique compliance burden. The common practical pattern: keep investing through a US brokerage, use FTC before FEIE in high-tax countries, never buy foreign mutual funds, keep meticulous records of foreign accounts, and engage a cross-border tax professional well before any move and before any renunciation decision. Browse programmes compatible with US taxation or the US nationality guide.