Who must file
U.S. citizens and green-card holders are taxed on their worldwide income and must generally file Form 1040 (or 1040-SR) when gross income exceeds the annual IRS filing threshold, regardless of where they live or where the income is earned. Living abroad does not terminate your U.S. filing obligation or your requirement to report worldwide financial accounts. The threshold depends on your filing status, age, and whether you can be claimed as a dependent; for 2025 it is generally around $15,000–$30,000 for most single and joint filers (exact amounts are inflation-adjusted each year and published in IRS Rev. Proc. documents). Note that for those married filing separately, a very common status for expats married to non-U.S. spouses, the filing threshold is just $5. Even if no tax is ultimately due after credits and exclusions, you usually must file to claim benefits such as the Foreign Earned Income Exclusion or Foreign Tax Credit.
Common expat positions
- Foreign Earned Income Exclusion (FEIE), see the FEIE guide for the §911 exclusion of up to the annual limit ($130,000 for 2025) when you meet the bona fide residence or physical presence test.
- Foreign Tax Credit (FTC), dollar-for-dollar credit for income taxes paid to foreign countries on the same income; often used in combination with or instead of the FEIE when foreign tax rates are high.
- Treaty benefits, relief from double taxation or special sourcing rules under a U.S. income tax treaty with the foreign country; treaty articles must be applied to your specific facts and often interact with the FEIE and FTC.
State tax considerations
Some expats remain domiciled in a U.S. state for tax purposes (especially if they retain a home, driver's license, or voting registration), while others successfully terminate state residency. Rules vary dramatically by state, California, New York, and others are aggressive about "statutory residents" and "domicile" audits. Scope your state filing history and ties during intake; failing to file required state returns can create separate penalties and interest even when federal obligations are satisfied.