Whether you are a first-time filer or a seasoned traveller, having an expat tax compliance checklist can bring peace of mind when dealing with the IRS. Understanding your filing responsibilities as a U.S. citizen or Green Card holder living abroad helps you steer clear of penalties, keep your finances organized, and continue enjoying your life overseas without unnecessary stress.

Understand your filing obligations

You are still subject to U.S. income tax on worldwide income, even when you reside outside the United States. This means you must file an annual Form 1040 if your income exceeds the standard filing threshold. Confirm your personal filing requirement by reviewing US expat tax compliance requirements, especially if you earn wages, receive investment income, or have self-employment earnings abroad.

Confirm your residency

  • Determine if you are a bona fide resident of a foreign country or if you qualify under the physical presence test.
  • Ensure you meet the conditions necessary to claim tax benefits like the foreign earned income exclusion rules.

Keep track of your deadlines

Mark your calendar with the critical due dates for filing your federal return and any other required disclosures. You receive an automatic two-month filing extension until June 15 if you live outside the U.S., but taxes owed are still due by April 15 to avoid interest.

  • Check expat tax reporting deadlines for state filing requirements and special extensions, such as an additional extension to October 15.
  • Remember that late filing can trigger penalties, so keep a buffer to gather documents on time.

Gather must-have documentation

Good recordkeeping is the backbone of smooth tax compliance. Organize your U.S. and foreign income statements, bank records, receipts, and other proof of financial transactions.

  • Maintain a secure file (digital or physical) that includes pay slips, bank statements, and receipts for deductible expenses.
  • Use US expat tax documentation guidelines for a detailed list of must-have documents.

File the correct forms

A key part of your expat tax compliance checklist is identifying and submitting all the necessary forms. Here are the major ones to consider:

  1. Form 1040: Your main U.S. tax return, reporting worldwide income.
  2. Form 2555: For claiming the Foreign Earned Income Exclusion. Check IRS Form 2555 instructions to maximize your exclusion.
  3. Form 1116: For claiming the Foreign Tax Credit if you pay tax abroad.
  4. Form 8938: For reporting certain foreign financial assets if your account value meets the threshold.

Don’t overlook additional reporting

If you have foreign bank accounts that exceed $10,000 in total value at any point during the year, you must file the FinCEN Form 114, commonly known as the FBAR. Read FBAR filing requirements US expats if you are unsure whether this applies to you. Also, be aware of specialized disclosures if you own or invest in foreign corporations or partnerships.

  • Form 5471: If you control or hold significant interests in a foreign corporation.
  • Form 8865: If you hold a 50% or 100% stake in a foreign partnership or single-member LLC.
  • Keep in mind that failure to file these informational forms can trigger automatic penalties.

Make use of expat tax benefits

Several tax provisions can reduce or eliminate your U.S. tax liability:

  • Foreign earned income exclusion rules: Exclude up to $130,000 (for 2025) of foreign earned income if you qualify.
  • Foreign Tax Credit: Get credit for taxes paid in high-tax countries via Form 1116.
  • Additional deductions: Certain housing expenses may also be deductible under Form 2555.

Review expat tax reporting obligations to see how these exclusions interact, as you cannot claim both FEIE and FTC on the same income.

Stay ahead of potential penalties

Late filing and late payment can be costly. You could face a failure-to-file penalty of 5% per month on unpaid taxes up to 25%, along with a smaller monthly failure-to-pay penalty plus interest. If you have fallen behind, penalty relief options such as the IRS Streamlined Foreign Offshore Procedures might be available if your oversights were non-willful.

Request a compliance review or consultation

Managing all these forms and requirements may seem intimidating. Professional guidance can help you avoid errors, stay compliant, and take advantage of key benefits. At American Pacific Tax, we simplify the process, reduce your IRS risk, and handle the paperwork so you can focus on enjoying life abroad.

If you are ready for peace of mind, request a compliance review or consultation and let a dedicated expat tax expert ensure you meet every requirement. From optimizing your exclusions to filing the correct forms on time, getting personalized support can spare you stress and keep you compliant year after year.