Expat Shocker: Most Americans Abroad Are Filing Taxes Wrong — Don’t Be One of Them

So, you’ve moved abroad. Maybe you’re working remotely from Portugal, teaching in Japan, or just living the dream in Mexico. Whatever your story is, there’s one thing you can’t escape—U.S. taxes.

Yep. Uncle Sam still wants a check-in, even if you haven’t stepped foot in the States for years. But before you start stressing, let’s walk through what actually matters for expats like you in 2025—minus the tax jargon.

1. You’re Still Required to File—Even If You Don’t Live in the U.S.

It feels unfair, but it’s true: if you’re a U.S. citizen or green card holder, you still have to file a tax return every single year, no matter where you live. You might not owe anything—but the paperwork? That part’s still required.

2. You’ve Got Extra Time to File, But Not to Pay

The IRS gives expats a little grace. You automatically get until June 17, 2025, to file your return. But here’s the catch: if you owe anything, it’s due by April 15. Miss that date, and interest starts stacking up.

3. You Can Usually Exclude a Big Chunk of Your Foreign Income

If you’re working overseas, the Foreign Earned Income Exclusion (FEIE) is your new best friend. In 2025, you can exclude up to $130,000 from your U.S. taxable income. That means you might owe nothing—but only if you file properly and claim it.

To qualify, you have to:

• Either spend 330 full days abroad in a 12-month span,

• Or prove that you’ve settled long-term in another country.

4. High Rent? You Might Be Able to Write It Off

If you’re living somewhere pricey, like Paris or Hong Kong, the Foreign Housing Exclusion might let you deduct rent and certain housing costs too. It’s a nice bonus for those shelling out big for an apartment abroad.

5. Already Paying Taxes Abroad? There’s a Credit for That

Living in a country with high taxes? You might not need the FEIE at all. Instead, you can use the Foreign Tax Credit, which lets you apply what you’ve already paid in foreign taxes toward your U.S. tax bill. It’s basically the IRS saying, “Okay, fair enough.”

6. The Standard Deduction Just Got Bigger

For 2025, the standard deduction went up:

• $15,000 if you’re single

• $30,000 if you’re married and filing together

That’s more income you don’t have to pay taxes on, which is always a win.

7. You Might Not Owe a Dime—But You Still Have to File

Here’s the twist: thanks to all these exclusions and credits, most expats don’t end up owing anything to the IRS. But skipping your return altogether? Bad idea. The fines can be steep even if your tax bill is zero.

8. Got Foreign Bank Accounts? There’s Extra Reporting

If your overseas bank accounts add up to $10,000 or more at any point in the year, you need to file an FBAR (yes, that’s a real form). And if you’ve got higher foreign assets—think over $200K—you may also need to file Form 8938 under FATCA rules.

It sounds annoying, but it’s not optional—and the penalties for missing it are no joke.

9. Need More Time? You Can File in October

Still waiting on tax paperwork from your host country? You can file Form 4868 and get an extension until October 15. But remember, this gives you more time to file, not to pay. If you owe, that’s still due in April.

10. There’s Talk of Change—But Nothing’s Set Yet

There’s been some political noise about ending citizenship-based taxation (meaning only taxing people who live in the U.S.). But for now? It’s just talk. So unless something officially changes, you’re still expected to file each year—no matter how far you roam.

Living abroad is amazing—but it comes with some fine print. The good news? Most expats don’t actually owe anything, and the IRS has tools to make sure you’re not taxed twice. You just need to file on time, use the right exclusions or credits, and keep an eye on your foreign accounts.

If you’re overwhelmed, don’t sweat it. There are tax professionals and expat-friendly services out there who can help. Or if you want me to break down your specific situation, I can help with that too.