Expatriate Tax Services in New York: Managing Your US Obligations From Anywhere in the World
The United States taxes its citizens on their worldwide income regardless of where they live — one of only two countries that does so. For US citizens and Green Card holders living and working abroad, this means filing a US tax return every year for the rest of their lives, reporting every dollar of foreign salary, every foreign bank account, every foreign investment, and every foreign business interest to the IRS. Our expatriate tax specialists manage this continuous compliance burden while minimizing double taxation through the available treaty and exclusion mechanisms.
The Foreign Earned Income Exclusion: Your First Line of Defense Against Double Taxation
The Foreign Earned Income Exclusion (FEIE) under Section 911 allows qualifying US expatriates to exclude up to $126,500 (2024 limit, adjusted annually for inflation) of foreign earned income from US federal income taxation. To qualify, the taxpayer must meet either the Bona Fide Residence Test — establishing genuine legal residence in a foreign country for an uninterrupted period including a full tax year — or the Physical Presence Test — spending at least 330 full calendar days outside the United States in any 12-consecutive-month period that overlaps with the tax year involved.
The FEIE exclusion applies only to earned income — wages, salaries, tips, and self-employment income derived from personal services performed outside the US. It does not exclude investment income, dividends, capital gains, rental income, or passive business income. For an expatriate earning $300,000 in foreign employment income annually, the FEIE eliminates the US federal tax on the first $126,500, reducing the effective US tax burden on that salary by roughly $47,000 per year. However, the exclusion amount has a stacking effect with self-employment tax — SE tax applies to the full net self-employment earnings before the exclusion, meaning self-employed expatriates receive less benefit than employees from the FEIE. Our international tax team optimizes the FEIE election against the Foreign Tax Credit for every expat client.
FEIE vs. Foreign Tax Credit: Choosing the Right Strategy
The Foreign Tax Credit (FTC) under Section 901 provides a dollar-for-dollar credit against US federal income tax for income taxes paid to foreign governments on the same income. For expatriates living in high-tax jurisdictions — Germany, France, Switzerland, the UK, or Australia — where local income tax rates exceed US rates, the FTC typically eliminates the entire US tax liability without any income exclusion required. In fact, for high earners in those jurisdictions, electing the FTC instead of the FEIE often produces a lower overall tax burden because it preserves credits that can be carried forward against future US tax liabilities.
For expatriates in lower-tax or zero-tax jurisdictions — UAE, Singapore, Hong Kong, Qatar — the local tax rate is lower than the US rate, meaning FTCs are insufficient to offset the US tax liability. In these situations, the FEIE provides a direct exclusion that reduces US taxable income regardless of what the host country charges. The optimal strategy depends on the specific jurisdiction, income level, income composition, and state tax nexus considerations — particularly whether the expat still maintains a New York domicile that generates separate state tax liability even while living abroad. Our multi-state compliance specialists analyze the state nexus question for every departing New York resident.
FBAR and FATCA: The Offshore Reporting Obligations That Follow You Abroad
US citizens living abroad must still file the Foreign Bank Account Report (FBAR) annually for every foreign financial account with an aggregate maximum balance exceeding $10,000 at any point during the year. Living in Germany and having a German checking account? File the FBAR. Working in Singapore and accumulating savings in a local bank? File the FBAR. The FBAR follows US citizenship permanently — it does not matter that the account is in the country of residence, not in a secrecy jurisdiction. The penalty for non-willful failure to file a single FBAR on a single account is up to $10,000 per year.
Similarly, Form 8938 (FATCA reporting) attaches to the US tax return for expatriates who hold specified foreign financial assets exceeding $200,000 at year-end or $300,000 at any point during the year for those living abroad filing jointly. Our FBAR compliance specialists maintain the annual foreign account reporting calendar for every expatriate client, ensuring both FinCEN 114 and Form 8938 are filed correctly and on time.
Related Resources
International Tax Services
FEIE, FTC, and cross-border tax compliance for US expats worldwide.
Foreign Income & FBAR
Annual FBAR, Form 8938, and offshore account reporting.
IRS Streamlined Filing
Delinquent expat filers — zero-penalty SFOP compliance program.
Multi-State Tax Filing
Severing New York domicile before international relocation.