What US Expats Need To Know About April 15

Nathalie Goldstein, MyExpatTaxes‘ CEO, helps Americans stay tax-compliant while living abroad with her user-friendly US expat tax software.

The April 15 U.S. tax deadline is approaching, so expats need to start thinking about filing their 2024 tax returns. The U.S. requires all citizens and green card holders to file taxes if they exceed the filing threshold despite living abroad. From U.S. tax deadlines to filing thresholds and state returns, here are some tips for filing your 2024 tax return.

Who Needs To File US Expat Taxes?

When filing U.S. taxes, three factors determine your filing threshold: marital status, age and annual income. For instance, in 2025, expats who are single under the age of 65 with an income exceeding $14,600 will be required to file.

Check out the IRS annual tax updates for more information.

Do US Expats Have To File By April 15?

The IRS understands international tax deadlines and the stress of gathering documents as a U.S. expat, so it automatically grants them a two-month extension until June 16 rather than April 15. However, if you owe taxes, they must be paid by April 15, as the June 16 extension only applies to filing them.

If an expat requires more time beyond June 16, they can file Form 4868 (by June 16) to receive an additional four-month extension until October 15. Depending on the complexity of the tax case, expats may be able to get an extension until December 15. To receive the December 15 extension, expats must send a letter to the IRS by October 15.

Foreign Earned Income Exclusion

As U.S. expats are at risk of facing double taxation, tax benefits such as the Foreign Earned Income Exclusion are essential. This exclusion allows expats to exclude up to $126,500 of foreign-earned income from their 2024 U.S. tax return. To qualify, expats must pass one of the following tests:

Physical Presence Test: You must be physically present outside the U.S. for at least 330 full days within 12 consecutive months.

Bona Fide Residence Test: If you have lived in a foreign country for an entire tax year, you may qualify for this test.

This tax benefit can only be applied to foreign-earned income like wages or salaries and cannot be used on passive income such as investments. Additionally, if you plan to apply for the Additional Child Tax Credit or contribute to an IRA, this exclusion could disqualify you!

The Foreign Tax Credit

An alternative to the Foreign Earned Income Exclusion is the Foreign Tax Credit, which allows expats to calculate their total foreign-paid taxes and use the credit toward their U.S. tax liability. Expats can exclude passive and general income while still being able to claim the Additional Child Tax Credit and contribute to IRAs.

Do Expats Owe US Taxes?

Most U.S. expats will not have to pay U.S. taxes, but there are some situations where a U.S. tax debt can occur:

High Earners Living In Low-Tax Countries

Expats earning more than the Foreign Earned Income Exclusion limit ($126,500) in a low-tax country may not have enough Foreign Tax Credits to offset the U.S. tax liability on their remaining income.

High Earners With Investment Income

Expats may have to pay 3.8% net investment income taxes on their investment income if their modified adjusted gross income exceeds the Form 8960 threshold, starting at $125,000 for taxpayers filing as married filing separately.

Self-Employed Individuals In Countries Without A Totalization Agreement

The U.S. has a totalization agreement with certain countries, which can reduce or eliminate Social Security taxes. However, without a totalization agreement, expats will likely have to pay self-employment taxes to both countries.

Expats Selling US Rental Property

Expats selling U.S. rental property could be subject to higher capital gain tax due to rental depreciation recapture calculations.

FBAR And FATCA: Key Reporting Requirements

Expats have two further reports for foreign financial accounts and assets: FBAR and FATCA Form 8938. Both reports are meant to combat tax evasion but have some key differences.

The FBAR, or FinCEN Form 114, is a report that must be filed if your foreign financial accounts collectively exceed $10,000 at any point during the calendar year. This form aligns with your standard tax return, but it is not submitted to the IRS but to the Financial Crimes Enforcement Network (FinCEN).

The Foreign Account Tax Compliance Act, or Form 8938, is an IRS form that requires you to report foreign financial assets exceeding a certain threshold.

• Single filers have a threshold of $200,000 at year-end or $300,000 during the year.

• Married couples filing jointly have a threshold of $400,000 at year-end or $600,000 at any time during the year.

Failure to comply with either of these reports will result in a minimum fine of $10,000.

State Returns For Expats Living Abroad

Depending on which state you are from could also determine whether a state return is required. Each state is different, but the most common states that require an expat to file a state return are California, New Mexico, South Carolina, Virginia and New York. These states can become particularly aggressive regarding state filing, so to avoid penalties, check your state website or file U.S. taxes with a tax professional!

Getting Caught Up With The Streamlined Procedures

If you haven’t filed since moving abroad, you may qualify for the streamlined procedures. These procedures allow U.S. expats to get caught up without penalties.

To use the streamlined procedures, expats must:

• Have lived abroad and failed to file due to non-willful neglect

• Have filed the last three years of tax returns

• Have filed the last six years of FBARs

• Pay any taxes owed

The streamlined procedures are one of the best ways for U.S. expats to fix past noncompliance without facing harsh penalties.

Time To Start Filing

Expats hoping to file their U.S. taxes by the April 15 U.S. tax deadline should ensure they file their FBAR and FATCA Form 8938. If you haven’t filed since moving abroad, consider using the streamlined procedures to become tax-compliant. Finally, if you need additional assistance with filing, consult a tax professional who specializes in expat taxes.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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