If you're a U.S. citizen or resident alien living outside the United States, you generally must file a U.S. federal tax return if you meet the normal filing requirements. Living abroad doesn't exempt you from U.S. taxes because the United States taxes its citizens and residents on their worldwide income. However, many expats qualify for tax benefits that can help prevent double taxation on foreign income. The 2026 foreign earned income exclusion is up to $132,900 per qualifying person.
How Do I File a Tax Return as an Expat?
The filing process is similar to filing a return in the United States, but you'll need to report both your U.S. and foreign income.
Reporting Foreign Employment Income
Many expats don't receive a U.S. Form W-2. If your employer does issue a W-2, enter it just as you would for any other tax return.
If your foreign employment income isn't reported on a Form W-2 or Form 1099, enter it in the software using the following path:
- Federal
- Income (Select My Forms)
- Less Common Income
- Other Compensation
- Foreign Earned Compensation
Be sure to report all taxable income earned during the year, even if it was paid by a foreign employer.
Can I Exclude Foreign Earned Income?
Maybe. If you live and work abroad and meet certain IRS requirements, you may qualify for the Foreign Earned Income Exclusion (FEIE). For tax year 2026, eligible taxpayers can exclude up to $132,900 of foreign earned income from U.S. taxation.
You may also qualify for a:
- Foreign housing exclusion (for employees)
- Foreign housing deduction (for self-employed individuals)
These provisions can significantly reduce your U.S. tax liability if you qualify. See our article for more information.
Who Qualifies for the Foreign Earned Income Exclusion?
To claim the exclusion, you must:
- Have a tax home in a foreign country.
- Meet either:
- The Bona Fide Residence Test, or
- The Physical Presence Test.
The IRS provides detailed rules for determining whether you meet these tests. If you qualify, you'll generally claim the exclusion by filing Form 2555 with your federal tax return.
Do U.S. Citizens Living Abroad Have to File State Taxes?
Possibly.
Moving overseas doesn't automatically end your state tax filing responsibilities. Whether you must continue filing a state return depends largely on the state where you lived before moving abroad and whether that state still considers you a resident for tax purposes.
Each state has its own residency rules, so it's important to review your state's filing requirements if you're unsure of your obligations.
Additional Resources for Expats
For more information about filing taxes while living abroad, see IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. This publication covers:
- Filing requirements for expats
- Foreign earned income
- Foreign housing exclusions and deductions
- Tax treaties
- Other international tax considerations
Understanding the rules before you file can help you claim every tax benefit you're entitled to and avoid common filing mistakes.