The short answer: A move abroad does not normally end federal filing for a US citizen. Build one calendar and income map for both countries, compare the foreign earned income exclusion with foreign tax credits, and check FBAR and Form 8938 separately. Do this before choosing payroll, company or investment arrangements.
Start with the rule that follows US citizens abroad
US citizens and resident aliens generally use the same federal filing rules whether they live in the United States or overseas. Taxable worldwide income still belongs on the return, including pay, self-employment, investments, rent and income from foreign accounts. A destination may also tax some of the same income once local residence or source rules apply.
That does not always mean paying full tax twice. The foreign tax credit, the foreign earned income exclusion and any applicable treaty can change the result, but each has conditions and interactions. Treat filing, reporting and tax due as three separate questions.
- List every income stream, where the work is physically performed and who pays it.
- Record citizenship, green-card status and filing position for both adults.
- Keep a day-by-day travel calendar from before departure, not a reconstructed estimate.
- Identify destination tax registration and filing dates alongside the US calendar.
Compare FEIE and foreign tax credits rather than assuming
The foreign earned income exclusion applies only to qualifying foreign earned income. For 2026 the maximum is $132,900 per qualifying person, reduced when the qualifying period covers only part of the year. You need a foreign tax home and either the bona fide residence test or 330 full days of physical presence in foreign countries during a qualifying 12-month period.
The foreign tax credit may reduce US tax on income that has already borne qualifying foreign income tax. You cannot claim a credit for foreign tax on income excluded under FEIE. Families with different income types, child-related credits, retirement contributions or a higher-tax destination should model the alternatives before making an election.
Worth knowing: FEIE is not an automatic exemption and does not make the income disappear from the return. It also does not generally remove US self-employment tax.
Treat FBAR and Form 8938 as separate checks
An FBAR is generally required when the aggregate value of foreign financial accounts in which a US person has a financial interest or signature authority exceeds $10,000 at any time in the calendar year. It is filed electronically with FinCEN, not attached to the tax return, and has an automatic extension from April 15 to October 15.
Form 8938 is attached to the federal return and covers specified foreign financial assets under a different set of definitions and thresholds. For qualifying people living abroad, the published thresholds begin above $200,000 at year end or $300,000 at any time for unmarried or separate filers, and $400,000/$600,000 for joint filers. Some assets can appear on both forms.
- Include family accounts, joint accounts and accounts where you only have signature authority in the review.
- Capture the maximum balance and account details while online access still works smoothly.
- Check foreign pensions, companies, trusts and funds separately; other information returns may apply.
- Get specialist help promptly if past international returns or reports may be missing.
Plan the first split-location tax year carefully
A mid-year move can create US workdays, foreign workdays, two payroll systems and two sets of estimated payments. The source of earned income generally follows where the services are physically performed, not the employer's address or the bank account receiving pay.
US taxpayers abroad may receive an automatic two-month extension to file and pay in qualifying circumstances, but interest generally runs on unpaid tax from the regular due date. A further extension to October can extend filing, not the original payment deadline. Confirm the year-specific rules rather than treating extensions as free credit.
Build a return-ready evidence folder
Save tax returns, wage and contractor records, destination assessments, foreign tax receipts, account maximums, exchange rates, travel dates and housing evidence. Keep the calculations that explain why a credit, exclusion, treaty position or reporting threshold was used.
If your family owns a business, receives equity compensation, holds foreign pooled investments or will work remotely for a US employer, arrange cross-border advice before the structure is fixed. These areas can create employer, company or reporting obligations beyond an individual Form 1040.
The US forms families most often need to ask about
This is a triage table, not a filing decision. Save the answer from the current form instructions or a qualified international tax professional.
| Question | Common route | What to save |
|---|---|---|
| Worldwide income | Form 1040 and relevant schedules | Income statements, location of work and exchange-rate method |
| Foreign earned income | Form 2555 if the tests and election fit | Tax-home evidence and day or residence test |
| Foreign income tax | Form 1116 where creditable | Assessment, payment receipt and income category |
| Foreign financial accounts | FinCEN Form 114 (FBAR) if required | Maximum values, ownership and filing confirmation |
| Specified foreign assets | Form 8938 if required | Asset type, value and threshold analysis |
| Self-employment or entities | Additional schedules or international forms may apply | Contracts, ownership chart and professional advice |
Put the work in a sensible order
Before accepting the overseas arrangement
Model employment, self-employment, entity and benefit treatment in both countries.
From the first travel day
Track location, workdays, account maximums and foreign tax paid.
Before year end
Review estimated payments, payroll and whether professional international filing support is needed.
At filing time
Check Form 1040, FBAR and Form 8938 independently and retain confirmations.