US Expat Tax Calculator 2025

The Foreign Earned Income Exclusion lets qualifying Americans abroad exclude up to $130,000 of foreign earned income from US tax for 2025. Only earned income such as salary and self-employment profit qualifies; investment income, pensions and rental income do not. The limit is indexed for inflation each year.

You must have foreign earned income, a tax home abroad, and meet either the Physical Presence Test or the Bona Fide Residence Test. The Physical Presence Test requires 330 full days outside the US in a 12-month period. The Bona Fide Residence Test requires being a genuine resident of a foreign country for a full tax year.

It depends on your host country. In low-tax countries, the Foreign Earned Income Exclusion often works best. In high-tax countries such as the UK, the Foreign Tax Credit usually eliminates more US tax and leaves credits to carry forward. Many higher earners are better off with the credit, and some combine both.

Yes. US citizens and green card holders must file annually based on citizenship, wherever they live, once income exceeds the filing threshold. Even if the FEIE or Foreign Tax Credit reduces your tax to zero, the return must still be filed, along with FBAR and FATCA forms where required.

No. The Foreign Earned Income Exclusion removes income from income tax, but it does not reduce US self-employment tax of 15.3%. Self-employed Americans abroad may avoid this through a Totalization Agreement if their country has one with the US, which shifts social security to the host country.

When you exclude foreign income, your remaining income is taxed as if the excluded amount had still counted for determining your tax bracket. In other words, the exclusion does not push your other income into lower brackets. This calculator gives a close estimate; a full return applies the exact Foreign Earned Income Tax Worksheet.

Yes. If both spouses have foreign earned income and each qualifies, they can each exclude up to the full limit, giving a combined exclusion of up to $260,000 for 2025. Each spouse must independently meet the residence or physical presence test.

No. Pensions, distributions and investment income are not earned income, so they fall outside the Foreign Earned Income Exclusion. These are usually handled through the Foreign Tax Credit and, where relevant, the tax treaty. Pension treatment is a frequent source of cross-border errors.

Income above the exclusion limit remains subject to US tax, though the Foreign Tax Credit can offset foreign tax paid on that excess. Higher earners therefore often rely on a combination of the exclusion and the credit, or on the credit alone. Modelling both routes is essential to minimise tax.

Often yes, but the Foreign Earned Income Exclusion can limit access to the refundable portion. Using the Foreign Tax Credit instead may preserve a larger refundable Child Tax Credit for qualifying families. This trade-off is one of the most valuable planning points for American families abroad.

The Physical Presence Test is met if you are physically present in a foreign country or countries for at least 330 full days during any 12-month period. Travel days and time in the US do not count. It is the most common way for newer expats to qualify for the exclusion.

Yes. If your combined foreign accounts exceed $10,000 at any point in the year, you must file an FBAR. Higher thresholds trigger FATCA Form 8938 as well. These information returns carry heavy penalties for non-compliance, independent of any tax owed.

It provides a strong estimate of federal income tax under the exclusion and the credit for salaried and self-employed income. It does not model state tax, the Net Investment Income Tax, the exact stacking worksheet, or investment income. For a precise figure, our advisers prepare your full return.

Americans abroad receive an automatic extension to 15 June, with a further extension available to 15 October. However, any tax owed still accrues interest from 15 April. Filing early avoids surprises, especially where FBAR and FATCA deadlines also apply.

For most expats, yes. The choice between the exclusion and the credit, the treatment of pensions and investments, and the information-return rules make expert help genuinely cost-effective. Specialist advice typically reduces tax and removes the risk of costly filing mistakes.