Live · For citizens and residents across a border
International Basics Desk
The United States taxes its citizens on worldwide income — the passport is the filing obligation, wherever you sleep. That single fact generates every question on this desk: the worker in Dubai asking what the exclusion covers, the family in Miami holding accounts back home and wondering which report is theirs, the spouse abroad with no Social Security number. The answers here are the basics, verified — and the desk stays basic on purpose, because cross-border years are where 'basics done right' ends and credentialed-pro territory begins.
Education only — not personal tax advice. Personal questions route to a credentialed pro.
Figures verified against IRS sources · Tax-year tables 2016–2026 · Re-verified each season by the Update Engine · Last review: November 7, 2026
Working abroad — the Foreign Earned Income Exclusion
If your tax home is in a foreign country and you earn income there, §911 lets you exclude a capped amount of the earned part — if you pass one of two tests. Both tests, the real caps, and the fine print:
The exclusion — $130,000 for 2025; $132,900 for 2026
A U.S. citizen or resident alien whose tax home is in a foreign country may exclude foreign EARNED income up to a cap that is inflation-indexed every year: $130,000 for tax year 2025 and $132,900 for tax year 2026. The cap is per person — two qualifying spouses each file their own Form 2555 and exclude up to their own cap on their own earnings. If you were abroad for only part of the qualifying period, the cap is prorated by qualifying days. The excluded income still sets your tax rate: the remaining income is taxed at the rates that would have applied had the excluded income been counted (the stacking rule on the Foreign Earned Income Tax Worksheet).
Form: Form 2555, attached to Form 1040
Authority: IRC §911; Rev. Proc. 2024-40 (2025); Rev. Proc. 2025-32 §4.39 (2026)
Test one — bona fide residence
You are a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year — January 1 through December 31. This test is open to U.S. citizens (and to resident aliens who are citizens of a country with a U.S. tax treaty). Residence is a life question, not a day count: your home, family, and intentions abroad. A statement to foreign authorities that you are NOT a resident of their country breaks it, and time in a country under certain official restrictions (periods the IRS lists for countries with unrest or sanctions) does not count.
Authority: IRC §911(d)(1)(A); Pub. 54, Bona Fide Residence Test
Test two — physical presence: 330 full days
You are physically present in one or more foreign countries for at least 330 FULL days during any 12 consecutive months. A full day is a continuous 24 hours beginning at midnight — days spent traveling over international waters between countries generally do not count as days in a foreign country, and a day in the United States breaks the foreign count for that day. The 12-month window is yours to choose: slide it to the window that gives you the most qualifying days. This is the test most digital nomads, rotational workers, and missionaries actually qualify under — keep a day log; the count is the claim.
Authority: IRC §911(d)(1)(B); Pub. 54, Physical Presence Test
The fine print that decides real cases
Four limits, each of which ends claims every year. (1) Earned income only: wages and self-employment income qualify; pensions, dividends, interest, capital gains, and rental income never do. (2) The exclusion does NOT reduce self-employment tax — a self-employed worker abroad still owes SE tax on the excluded earnings unless a totalization agreement (the separate Social Security treaties) applies. (3) Your tax home — the general area of your employment — must be in a foreign country; if your abode remains in the United States, you fail before either test begins. (4) The exclusion is an election made on a filed return; revoking it generally bars re-electing it for five years without IRS consent — do not toggle it casually. The companion tool is the foreign tax credit (Form 1116), which credits foreign income taxes paid; many workers abroad run both computations, because on high-tax-country income the credit can beat the exclusion, and the two can be combined on different portions of income.
Form: Form 2555 (exclusion) · Form 1116 (foreign tax credit)
Authority: IRC §§911, 901; Pub. 54
FBAR vs Form 8938 — the two reports, side by side
This is the confusion this desk exists to end. Money held abroad can trigger two different reports, to two different agencies, under two different laws — and filing one never counts as filing the other. The IRS publishes its own comparison chart; this is it, in plain language:
| FBAR — FinCEN Form 114 | FATCA — Form 8938 | |
|---|---|---|
| What it is | A Bank Secrecy Act report of foreign bank and financial accounts — financial interest in, or signature authority over, accounts outside the U.S. | A tax-code report of specified foreign financial assets — accounts, and certain foreign stocks, securities, partnership interests, and other assets. |
| The threshold | The AGGREGATE value of all your foreign financial accounts exceeded $10,000 at ANY moment during the year. Aggregate is the trap: five accounts of $3,000 each are a filing. | Depends on status and where you live. Living in the U.S.: more than $50,000 on the last day of the year, or more than $75,000 at any time (single / married filing separately); $100,000 / $150,000 married filing jointly. Living abroad (and meeting the §911 residence or presence tests): $200,000 / $300,000 single or MFS; $400,000 / $600,000 joint. |
| Filed with | FinCEN — the Financial Crimes Enforcement Network. NOT the IRS, and NOT with your tax return (e-file through the BSA E-Filing System). | The IRS — Form 8938 is attached to your annual tax return. |
| Due date | April 15, with an AUTOMATIC extension to October 15 — no request, no form. Miss April and nothing is late. | With your return — including its extensions. No separate automatic extension exists. |
| Does one satisfy the other? | No. The IRS says so in its own comparison chart: filing an FBAR never satisfies Form 8938, and filing Form 8938 never satisfies the FBAR. Many accounts belong on both. | No — the same answer from the other side. If your foreign accounts cross both thresholds, you file both reports, with both agencies, every year. |
| The penalty shape | Five-figure exposure per missed report even when the failure was not willful (the per-report amount is inflation-adjusted), and dramatically worse for willful failures — up to the greater of an inflation-adjusted six-figure amount or half the account balance. | $10,000 for failing to file, plus up to $50,000 more for continuing to fail after the IRS notifies you — and a 40% accuracy penalty on tax understatements tied to undisclosed assets. |
Sending money to family abroad is a different question from HOLDING accounts abroad — gifts home are not income and are not deductible; see the Sending Money Home playbook for the gift rules and the 2026 §4475 transfer-tax trap.
Deadlines, dual status, treaties, and ITINs
June 15 — the automatic two months
If you are a U.S. citizen or resident alien living abroad on April 15 — or on active military duty outside the United States and Puerto Rico — you automatically have until June 15 to file AND to pay, with no extension form and no request. Attach a statement to the return explaining that you qualified. The catch is printed in the IRS's own guidance and surprises people every year: interest on any unpaid tax still runs from the April due date, because the extension postpones the deadline, not the interest clock. Need longer? File Form 4868 by June 15 and filing extends to October 15 — payment obligations and interest run on the original schedule.
Form: Statement attached to the return; Form 4868 for October 15
Authority: IRS, “U.S. citizens and resident aliens abroad”; Pub. 54
Dual-status — one paragraph and a pointer
If you were a resident alien for part of a year and a nonresident alien for the rest — the classic first-year-in or last-year-out pattern — you file a dual-status return: one form as the return (Form 1040 or 1040-NR, depending on your status on December 31) and the other as an attached statement covering the rest of the year. The restrictions bite: a dual-status taxpayer generally may NOT claim the standard deduction, may not file jointly except by a specific election with a U.S.-citizen or resident spouse, and may not file as head of household. The mechanics are exact and the exceptions are treaty-flavored, so this desk's honest counsel is one paragraph and a pointer: read the IRS's dual-status guidance end to end, and bring the year you changed status to a credentialed pro — it is the highest-error return a relocating family files.
Authority: IRS, “Dual status aliens”; Pub. 519, U.S. Tax Guide for Aliens
Treaties — a pointer, on purpose
The United States has income-tax treaties with dozens of countries, and a treaty can change who taxes a pension, a salary, or business profits — sometimes overriding the Code itself. This desk prints no treaty outcomes, deliberately: a treaty position depends on the exact article, your residency under the treaty's own tie-breaker rules, and your facts, and a claim that contradicts the Code is generally disclosed on Form 8833. The IRS publishes the full treaty tables and texts; a cross-border year with real income in two countries is credentialed-pro work. Anyone who states a treaty result for your situation without reading your facts is guessing with your signature.
Form: Form 8833, Treaty-Based Return Position Disclosure (where required)
Authority: IRS, “Tax treaties” (tables and texts); IRC §6114
ITINs — the number for people without an SSN
Family members abroad who cannot get a Social Security number — a nonresident spouse, dependents in another country — are identified on a U.S. return with an Individual Taxpayer Identification Number, applied for on Form W-7. The platform's Forms Library carries the full W-7 entry — who needs one, the renewal rules, and the errors that delay it — and Lesson 102 in the Painful Lessons walks the common traps. Start there if the person on your return has no SSN.
Form: Form W-7 — see the Forms Library entry
Authority: IRS, “Individual Taxpayer Identification Number”; Form W-7 instructions
Every figure on this page, with its source
- FEIE caps — $130,000 for tax year 2025 (Rev. Proc. 2024-40) and $132,900 for tax year 2026 (Rev. Proc. 2025-32 §4.39); indexed annually; per-person; prorated by qualifying days; the stacking computation is on the Foreign Earned Income Tax Worksheet: IRC §911; IRS, “Foreign Earned Income Exclusion.”
- The two tests — bona fide residence (uninterrupted period including an entire tax year; citizens, and resident aliens of treaty countries) and physical presence (330 full 24-hour days in foreign countries during any 12 consecutive months): IRC §911(d)(1); Publication 54.
- Limits — earned income only; no reduction of self-employment tax (absent a totalization agreement); foreign tax home required, abode in the U.S. disqualifies; election revoked generally bars re-election for 5 years: IRC §911; IRS, “Foreign Earned Income Exclusion — What are the requirements?”.
- June 15 — automatic 2-month extension to file and pay for citizens and resident aliens abroad (and military on duty outside the U.S./Puerto Rico); statement attached; interest runs from the April date; Form 4868 extends filing to October 15: IRS, “U.S. citizens and resident aliens abroad.”
- Dual status — part-year resident / part-year nonresident; the other form filed as a statement; standard deduction generally unavailable; joint filing only by election: IRS, “Dual status aliens”; Publication 519.
- FBAR vs Form 8938 — every cell of the comparison above: IRS, “Comparison of Form 8938 and FBAR requirements” (FinCEN Form 114 under 31 U.S.C. §5314 and 31 CFR §1010.350; Form 8938 under IRC §6038D); FBAR due April 15 with an automatic extension to October 15 (FinCEN).
- Treaties — pointer only, no outcome stated: IRS, “Tax treaties”; disclosure of treaty-based positions on Form 8833 under IRC §6114.
A first cross-border year, a foreign pension, a business with foreign owners — these are the facts that move a return out of education and into practice. The Find a Pro directory exists for exactly that handoff.