Filing US taxes for the first time overseas can be challenging, as foreign income has some additional requirements. For instance, US expats with foreign financial accounts exceeding 10.000 US dollars may need to file an FBAR. To avoid double taxation, expats must use the Foreign Earned Income Exclusion or Foreign Tax Credit. For all first-time filers living overseas, here is an overview of what you should know before filing your US taxes.
Before even considering filing US taxes, first-time filers must determine whether they exceed the filing threshold. Find a list of the threshold amounts for your 2024 tax return below:
When filing US taxes abroad for the first time, it is essential to be mindful of these tax deadlines, or there will be penalties.
These dates reflect the actual 2025 dates, taking holidays and weekends into account.
For expats filing US taxes for the first time, it is essential to understand which tax benefits can apply to your situation. The most common foreign tax benefits are the Foreign Earned Income Exclusion and the Foreign Tax Credit:
Here is when you need to report foreign financial accounts:
When it comes to foreign financial accounts collectively exceeding 10.000 US dollars at any during the year, you must file an FBAR. This form is important for preventing tax evasion and must be filed by October 15. Additionally, before submitting your FBAR, ensure it is being sent to the FinCEN (Financial Crimes Enforcement Network), as it should not be sent to the IRS.
Like the FBAR, the IRS has the Foreign Account Tax Compliance Act (FATCA), which requires foreign assets over a certain threshold to be reported on Form 8938. The threshold for FATCA Form 8938 depends on filing status, residency, and total asset value:
If it’s your first time filing US taxes after living overseas for many years, you may have to file multiple tax returns to become IRS compliant. US expats can use the Streamlined Procedure to catch up on three past tax returns and six FBARs with penalties! However, the IRS must not have contacted you regarding unfiled tax returns to be eligible for this procedure.