The United States taxes its citizens on worldwide income, regardless of where they live. Almost no other country does this. If you are a US citizen or green card holder living abroad, you have a filing obligation even if you owe nothing.

The deadlines

Deadline	Date for tax year 2025
Standard filing deadline	15 April 2026
Automatic extension for those abroad	15 June 2026 — no form required
Extension via Form 4868	15 October 2026

The two-month automatic extension applies if, on the regular due date, you were living and working outside the US and Puerto Rico, or on military duty outside them. You do not apply for it. Attach a statement to your return explaining which situation applies.

Interest still accrues from 15 April. Every one of these is an extension of time to file, not to pay. If you expect to owe, pay by 15 April.

Relief one: the Foreign Earned Income Exclusion

The FEIE lets you exclude foreign earned income — wages, salary, self-employment income — from US tax.

	Tax year 2025	Tax year 2026
Maximum exclusion per qualifying person	$130,000	$132,900
Housing expense limit (30% of the FEIE)	$39,000	$39,870

Claimed on Form 2555. The housing limit varies by the location of your foreign tax home. The housing exclusion is computed first; the FEIE is then capped at foreign earned income minus the housing exclusion.

To qualify you must meet one of two tests.

The bona fide residence test. An uninterrupted period of foreign residence that includes an entire tax year — 1 January to 31 December. Brief trips home are fine provided you clearly intend to return. You are disqualified if you tell the foreign tax authority you are not a resident and they accept that.

The physical presence test. 330 full days in a foreign country during any 12 consecutive months. The days need not be consecutive. A full day is 24 hours, midnight to midnight, entirely within a foreign country. Time over international waters does not count. Transit through the US of under 24 hours between two foreign points does not break it.

The 12-month window is yours to choose, and you can pick the one that maximises the exclusion. Overlapping periods across years are permitted.

Relief two: the Foreign Tax Credit

The FTC credits foreign income tax you have already paid against your US liability. Claimed on Form 1116.

Only income, war profits and excess profits taxes qualify. Not VAT, not social security contributions in most cases, not property taxes.

You may take foreign income taxes as a credit or as an itemised deduction. The IRS states that "in most cases it is to your advantage to take foreign income taxes as a tax credit."

You cannot claim the FTC on income you have excluded under the FEIE. The two reliefs cannot be applied to the same money.

When Form 1116 is not required: if your total creditable foreign taxes are $300 or less ($600 married filing jointly), all your foreign-source gross income is passive category income, and all of it was reported on a qualified payee statement such as a 1099-DIV or a Schedule K-1. Electing this forgoes carryovers for that year.

Standard carryover otherwise: one year back, ten years forward.

Which one to use

The decision turns on the tax rate where you live.

FEIE suits earned income in a low-tax or no-tax jurisdiction — the Gulf states, for instance. There is little or no foreign tax to credit, so excluding the income is the only relief available.

FTC suits high-tax jurisdictions — most of Western Europe. The foreign tax paid often exceeds the US liability outright, and unlike the FEIE the credit also covers unearned income such as dividends and rent, which the FEIE cannot touch.

Many people abroad use a combination across different income types. Getting the split right, and the interaction with the carryover rules, is where a preparer who specialises in expatriate returns earns their fee.

What else you may have to file

Two reporting obligations sit alongside the return and catch people out. See FBAR and FATCA: what US persons abroad have to report.