Blueprint for Filing US Taxes as an Expat in 2026

Naturally, Americans living abroad want to stay in US Tax compliance to protect their citizenship or Green Card Status. Others, consider renouncing citizenship. We'll share how US tax compliance should occur for either situation.

Expat basics: for US citizens and greencardholders living abroad:

Income taxes:

• IF you haven't filed for many years, the "compliance window" for the IRS is six years, therefore all foreign and US income needs to be filed and reported for each of those 6 years. However, some non-filers try to file three years to see if that suffices and in many cases it does. (See Streamline below).
• When filing, Foreign Earned Income Exclusion (FEIE) allows the exclusion of a significant portion of foreign-earned income from US taxation. For the 2026 tax year, the exclusion amount is up to $132,900 per qualified individual ($130,000 for 2025).
• Foreign Tax Credit (FTC) also can be considered when your income exceeds the FEIE and if you have passive foreign income sources like interest or dividends
• US citizens living abroad get an automatic 2-month extension on the typical annual April 15^th deadline – so keep mid-June in mind for the current year.

• If you are an Expat with over $200,000 in foreign financials holdings, you'll need to add Foreign Account Tax Compliance Act (FATCA) to your 1040 filing. (The threshold is $50,000 for reporting if you live in the US).
• For any year your foreign bank account holdings tip USD $10k equivalent, you’ll also need to file annual Foreign Bank Asset Reports (FBARs).

Renouncing citizenship:

• Make sure you are up-to-date with the above filing requirements before heading to your consulate or embassy appointment.
• File Form 8854 (Initial Annual Expatriation Statement) with your final return certifying that you have complied with all US tax obligations.
• For the year of renunciation, you must file a dual-status return (a 1040 for the portion of the year you were a citizen + 1040NR for the portion after).

Streamline Procedure:

• Streamlined Filing Compliance can help U.S. citizens (or green card holders) catch up on their tax obligations when renouncing their citizenship. This procedure - filing just the last 3 years while declaring unwillful negiligence of the law - is design to help avoid penalties and simplify the process.