You still file a US tax return every year after you move abroad. Most remote workers end up owing little or no US income tax by using the $132,900 foreign earned income exclusion (2026) or the foreign tax credit. But you may owe tax in your new country, self-employment tax still applies to freelancers, and foreign accounts over $10,000 need an FBAR.
Checked against the sources at the end on November 2, 2026. This is general information, not legal or tax advice. Rules and fees change, so confirm with the official source before you apply.
At a glance
| Item | What to know |
|---|---|
| Do I still file a US return? | Yes, every year. The US taxes citizens on worldwide income wherever they live |
| Filing deadline abroad | Automatic 2-month extension to June 15 if you live abroad on April 15. Interest on tax owed still runs from April 15 |
| Foreign earned income exclusion | Up to $132,900 of 2026 work income can be excluded (Form 2555), if you pass the residence or 330-day test |
| Foreign tax credit | Credit for income tax you pay abroad (Form 1116). Usually the better choice in higher-tax countries |
| Foreign bank accounts | FBAR if your foreign accounts total more than $10,000 at any point in the year |
| Self-employment tax | 15.3% US Social Security and Medicare tax still applies to freelancers, even with the exclusion, unless an agreement covers you |
| Your state | Some states keep taxing you after you leave unless you clearly cut ties |
| Your new country | Most of our countries tax you as a resident once you spend about 183 days a year there |
You still file every year
The US is one of only two countries that taxes its citizens wherever they live. Moving abroad doesn't end your US return. It changes which forms you file and, for many people, how much you owe.
- Same filing thresholds. If your income is above the normal filing threshold, you file a Form 1040, even if you end up owing nothing.
- June 15, automatically. If you live and work outside the US on April 15, you get an automatic 2-month extension to file and pay. Attach a statement explaining why. Interest on any tax due still starts April 15.
- October 15, on request. File Form 4868 by June 15 for more time to file (not to pay).
- Use an expat specialist. Your first return abroad is the one to get right, because some choices, like the exclusion, are hard to undo.
Two ways to avoid double tax
You normally use one of two tools so the same income isn't taxed twice. You can't use both on the same dollars.
| Foreign earned income exclusion (Form 2555) | Foreign tax credit (Form 1116) | |
|---|---|---|
| What it does | Excludes up to $132,900 of 2026 earned income from US tax | Credits income tax you paid abroad against your US tax |
| Who qualifies | Your tax home is abroad, and you're a bona fide resident of a foreign country for a full tax year, or physically present abroad 330 full days in any 12 months | Anyone who pays foreign income tax on foreign income |
| Works best | In low-tax or no-tax setups, such as Croatia's nomad exemption, Costa Rica, Panama or Paraguay | In higher-tax countries, such as Portugal, Spain, Italy and Greece, where local tax often exceeds US tax |
| Watch out | Covers work income only, not investments. If you claim it, you can't claim the refundable Additional Child Tax Credit. Revoke it and you generally can't use it again for 5 years without IRS consent | Unused credits can be carried back 1 year and forward 10. More paperwork |
A housing exclusion or deduction can add to the exclusion if your housing costs are high. For 2026 the base amount is $21,264 and the general cap is $39,870, with higher caps in some expensive cities.
Self-employment and Social Security
This is the one that surprises freelancers.
- Self-employment tax still applies. The 15.3% Social Security and Medicare tax on self-employment income isn't reduced by the foreign earned income exclusion.
- Totalization agreements stop double social security. The US has agreements in force with Portugal, Spain, Greece and Italy among our countries. Under them you pay into one system, not both. Get a certificate of coverage from whichever system covers you.
- No agreement with the rest. Croatia, Mexico, Colombia, Argentina, Thailand, Costa Rica, Albania, Panama and Paraguay have no US agreement, so in some cases you could owe into both systems. Check before you register locally.
- Employees of US companies usually stay on US payroll for Social Security, but your new country may still expect local contributions once you're resident. Ask your employer and a local adviser.
Reporting foreign accounts
These are information returns. Missing them can bring large penalties even when no tax is due.
| FBAR (FinCEN Form 114) | Form 8938 (FATCA) | |
|---|---|---|
| When it applies | Your foreign financial accounts total more than $10,000 at any time in the year | If you live abroad: more than $200,000 at year end or $300,000 at any time (single); $400,000 or $600,000 for married filing jointly |
| Filed with | FinCEN, online, separately from your tax return | The IRS, with your Form 1040 |
| Due | April 15, with an automatic extension to October 15 | With your tax return |
Count every foreign account you can sign on, including a local current account, savings, and some app-based accounts. Many people need the FBAR in their first year abroad.
Your state may not let go
Leaving the country doesn't automatically end your state residency. A few states are known for holding on, including California and Virginia, and they can keep taxing you if they still see you as domiciled there.
- Change your driver's license and voter registration, or let them lapse, depending on your state's rules.
- Close or move state-specific accounts, and don't keep a home available to you there.
- Use a mailing address in a state with no income tax, or a mail-forwarding service, if your state allows it.
- Move to a no-income-tax state before you leave only if you genuinely establish residence there. Ask a tax adviser.
Taxes in your new country
The visa decides where you can live. It doesn't decide where you owe tax. In most of our countries, spending more than about 183 days a year makes you a tax resident.
| Country | How residents are taxed | Worth knowing |
|---|---|---|
| Portugal | Worldwide income, progressive up to 48% | IFICI ("NHR 2.0") gives a flat 20% for 10 years on qualifying work, but only for set roles, so many remote employees won't qualify |
| Spain | Worldwide income, progressive | The "Beckham Law" special regime: 24% up to €600,000 for some inbound workers, including many on the nomad visa. Apply within 6 months |
| Greece | Worldwide income, 9% to 44% | A 50% income tax reduction for up to 7 years for people moving tax residence to Greece, with conditions |
| Italy | Worldwide income after 183 days | The nomad visa brings no tax break. The inbound-worker regime is a separate application with its own tests |
| Croatia | Exempt on foreign income while you hold the digital nomad permit | The exemption ends if you switch to another permit type |
| Mexico | Worldwide income if Mexico is your tax home | Temporary residents can become tax residents. Get advice before you register |
| Colombia | Worldwide income after 183 days in any 365 | Many digital nomads cross the line without noticing |
| Argentina | Worldwide income for residents | Exchange rules have changed often. Get local advice |
| Thailand | Residents (180+ days) can owe tax on foreign income they bring into Thailand | Rules on foreign income changed in 2024 and have been under review. Check the current position |
| Costa Rica | Territorial: only Costa Rican income is taxed | Nomad visa holders working only for foreign clients owe no Costa Rican income tax |
| Albania | Worldwide income for residents after 183 days | Rates are moderate. Ask how your visa-free stay counts |
| Panama | Territorial: foreign income isn't taxed | Panama uses the US dollar, which simplifies banking |
| Paraguay | Territorial, 8% to 10% | No wealth, inheritance or gift tax. See our Paraguay guide |
This table is a starting point, not tax advice. Each country's rules have conditions and change often, so confirm with a local adviser before you register.
If you work for a US company
Your employer has its own risks when you work from another country, so get permission in writing before you go.
- Tell HR early. Many companies have a remote-work-abroad policy, with approved countries and time limits.
- Ask about payroll and tax. Working abroad long-term can create obligations for your employer in that country, sometimes called a "permanent establishment" risk.
- Get the letter. Most nomad visas ask for a letter confirming you can work remotely. Our plans include a template for your HR team.
- Keep US withholding right. If you'll claim the exclusion, ask payroll whether they can reduce withholding with Form 673.
Banking that works abroad
Keep your US banking working, then add a local account once you have your tax number.
- Keep a US checking account and a US address. Some US banks close accounts when you switch to a foreign address. A trusted family address or a mail service avoids that.
- Use a card with no foreign transaction fees, and a debit card that refunds ATM fees, so cash costs you nothing extra.
- Always pay in the local currency. When a card machine offers to charge you in dollars, say no. That "dynamic currency conversion" costs more.
- Move money with a low-cost transfer service, rather than bank wires, for rent and bills.
- Keep your US phone number. Banks text verification codes to it. Port it to a low-cost plan or a number service before you go.
- Open a local account after you land. You'll need your local tax number first: NIF in Portugal, NIE in Spain, AFM in Greece, codice fiscale in Italy, OIB in Croatia, RFC in Mexico.
- Expect FATCA paperwork. Foreign banks report American customers to the IRS, so they'll ask for a Form W-9. A few banks turn Americans away; try another.
- Don't buy local investment funds. Foreign mutual funds and ETFs are usually "PFICs" under US tax law and are taxed punitively. Keep investing through your US brokerage if it lets you, and check its rules for customers abroad.
Your checklist
- Choose an expat tax preparer before your first tax season abroad
- Decide between the exclusion and the foreign tax credit with them
- Note your travel dates; the 330-day and 183-day counts depend on them
- Set a reminder for the FBAR if your foreign accounts may pass $10,000
- Get written approval from your employer, plus the remote-work letter
- Check your state's rules for ending residency
- Order a card with no foreign transaction fees and keep your US phone number
- Get your local tax number, then open a local account
Sources
Checked on November 2, 2026. Where sources disagree, we say so above.
- IRS: Foreign earned income exclusion
- IRS Notice 2026-25: 2026 exclusion amount and housing limits
- IRS Publication 54: Tax Guide for US Citizens and Resident Aliens Abroad
- IRS: Report of Foreign Bank and Financial Accounts (FBAR)
- IRS: Comparison of Form 8938 and FBAR requirements
- Social Security Administration: Totalization agreements in force
- Taxes for Expats: Costa Rica digital nomad visa and taxes
- International Tax Review: Thailand's foreign income tax changes
- Shoreward country guides (tax sections, with their own sources)
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