US expat tax in 2026: what citizens and green card holders abroad pay
The $132,900 foreign earned income exclusion, the foreign tax credit, FBAR from $10,000, Form 8938, the 15 June and 15 October deadlines, state taxes and streamlined filing for past years.
In short
- Who pays: US citizens and green card holders, on worldwide income, wherever they live.
- Exclusion: up to $132,900 of earned income per person for 2026 with 330 days abroad or a full year of residence in another country.
- Credit: income tax paid in your country of residence reduces US tax; in high-tax countries US tax is often zero.
- Reports: FBAR if your foreign accounts total over $10,000; Form 8938 from $200,000 for people living abroad.
- Deadlines: 15 June for people living abroad, 15 October on request.
In detail
US citizens and green card holders pay US tax on worldwide income wherever they live. Abroad, though, the bill is usually zero or close to it: in 2026 up to $132,900 of earned income per person is excluded from tax, and income tax paid in your country of residence is credited against US tax. What remains is filing the return and the foreign account reports on time.
Amounts and deadlines follow Internal Revenue Service rules in 2026.
Who pays US tax while living abroad
Every US citizen, including dual citizens, and every green card holder remains a US tax resident. Moving to another country does not change that: you file Form 1040 if your income for the year is above the filing threshold, and in 2026 the standard deduction for a single filer is $16,100.
- US citizens file for as long as they hold citizenship, even if they have lived abroad since childhood.
- Green card holders are residents for as long as the status lasts, even if the family lives in Europe. The status ends when it is formally given up or found to be abandoned.
- Long-term residents, who held a green card in 8 of the last 15 years, file Form 8854 when they give up the status.
Rates, state taxes and deductions are on the US taxes page, and the path to a green card is in US green card routes.
The foreign earned income exclusion: up to $132,900 in 2026
Wages or self-employment income earned abroad can be excluded from US tax up to $132,900 per person for 2026. If both spouses work abroad, a joint return excludes up to $265,800. You claim the exclusion on Form 2555.
The conditions: your tax home, your main place of work, is abroad, and you meet one of two tests:
- Bona fide residence test: you live in another country without a break for a full calendar year.
- Physical presence test: you spend at least 330 full days abroad in any 12 consecutive months.
On top of that you exclude part of your housing costs: in 2026 the limit is generally $39,870 a year, higher in expensive cities. The exclusion covers earned income only: interest, dividends, rent and pensions are not included. Self-employed people pay US Social Security and Medicare tax unless their country of residence has a social security agreement with the US.
The foreign tax credit: when it works better
Income tax paid in your country of residence is credited against US tax on Form 1116. In countries with higher rates than the US, such as Germany or the United Kingdom, the credit often brings US tax to zero, and an unused credit is carried back 1 year or forward 10 years.
| Situation | What usually works better |
|---|---|
| A salary up to $132,900 in a low-tax country such as the UAE | the foreign earned income exclusion |
| A salary in a high-tax country | the foreign tax credit |
| Income above $132,900 | the exclusion plus the credit on the rest |
| Interest, dividends, rent | the foreign tax credit only |
The same income cannot be both excluded and reduced by the credit. How two countries share tax under treaties is covered in double taxation.
We will work out your taxes after the move
The chat will ask about your income and countries and tell you where and how much you will pay.
FBAR and Form 8938: reporting foreign accounts
These are reports, not taxes: the government sees the accounts, and the tax on them is worked out in the return.
- FBAR (FinCEN Form 114). You file it if the total on all your foreign accounts went over $10,000 on any day of the year. It goes online to the Financial Crimes Enforcement Network by 15 April, with an automatic extension to 15 October.
- Form 8938 is attached to the return. For people living abroad the threshold is $200,000 at the end of the year or $300,000 on any day; for a married couple filing jointly, $400,000 and $600,000. For people living in the US the thresholds are four times lower: $50,000 and $75,000.
Filing deadlines and state taxes
The usual deadline is 15 April. If you live abroad, filing moves automatically to 15 June, and with Form 4868 to 15 October. Interest on unpaid tax runs from 15 April, so any tax due is best paid in April.
State income tax is separate: each state decides who its residents are. Before leaving, close your ties with the state, such as a home, a driving licence and voter registration, so that it no longer treats you as a resident.
Behind on US returns? The streamlined procedures
The Internal Revenue Service offers streamlined filing for people living abroad: you file returns for the last 3 years and FBARs for the last 6, and no penalty applies if the missed filings were not wilful. The condition is at least 330 days abroad in at least one of the last 3 years. Many owe nothing after filing, because the exclusion and the credit work retroactively too.
Not sure you have filed everything you need? A manager will check your situation for free.
We will help you sort out US tax while living abroad
US tax abroad works out when the exclusion, the credit and the reports fit together. The most common mistakes: claiming the exclusion without meeting the 330-day or residence test, forgetting the FBAR for joint or business accounts, paying tax twice instead of using the credit, and keeping ties with a state that still counts you as a resident. We work out the cheapest option for your income, prepare the return, the FBAR and Form 8938 and bring past years up to date.
Details and the cost of support are with a manager in the chat.
How Murblz helps
Murblz handles US tax for citizens and green card holders living abroad: we work out whether the exclusion or the credit saves more, prepare the return and the account reports, bring past years up to date through the streamlined procedures and help you choose a country of residence with a favourable tax. All programmes for the country are on the USA page.
FAQ
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Don’t want to figure this out alone?
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