Common Mistakes U.S. Expats Make When Filing Taxes Abroad

Filing U.S. taxes while living abroad can feel complicated — especially with multiple deadlines, foreign income, and reporting rules to follow. Here are five common mistakes many expats make and how you can avoid them.

1. Forgetting to File Altogether

Even if you live abroad full-time, you’re still required to file a U.S. tax return annually if your income exceeds the threshold.

2. Not Reporting Foreign Bank Accounts (FBAR)

If you have over $10,000 in combined foreign accounts at any time during the year, you must file the FBAR (FinCEN Form 114). Missing this can result in hefty penalties.

3. Missing Out on Exclusions and Credits

Many expats don’t claim benefits like the FEIE, Foreign Tax Credit (FTC), or Housing Exclusion, which can dramatically reduce tax owed.

4. Using the Wrong Exchange Rates

The IRS requires you to convert all foreign income to USD. Using unofficial rates can trigger red flags.

5. DIY Tax Filing Without Expat Expertise

While online software can work for basic filings, expat tax cases often involve nuances such as multiple currencies, foreign employers, or dual taxation treaties.

Working with professionals experienced in U.S. expat tax law ensures accuracy, compliance, and peace of mind.