Part 5 of 31 Things Americans Should Think About Before Moving Abroad : US Taxes Abroad

Taxing Realities: What Every American Abroad Needs to Know

If you’re an American planning a move abroad, your dreams might be filled with new cities, new foods, and new adventures—but don’t forget to pack your paperwork.

I’m Darien, an American who moved to the Netherlands, and this is Part 5 of my 31-part series on the nitty gritty things Americans—especially those in the sandwich years—should consider when planning a move abroad.

Today’s topic? U.S. taxes. Yes, even from overseas.

You Can Leave the Country—But Not the IRS

If you’ve ever heard of FATCA—the Foreign Account Tax Compliance Act—you already know this isn’t going to be a fun topic. But it is an essential one.

The U.S. is one of the only countries in the world that taxes based on citizenship, not residency. That means even if you earn every dollar (or euro, or yen) outside of the United States, you’re still required to file a U.S. tax return every single year—and possibly pay U.S. taxes, too.

So while you’ll likely be paying income taxes in your new country of residence, you’re still accountable to the IRS. And if you’re a mid-career or older professional with anything beyond a simple W-2 situation—say, an investment property, business shares, or retirement savings—your tax filing is going to be even more complex.

Those Returns Aren’t Cheap

If you’re used to filing a straightforward 1040, brace yourself. Once you add in forms related to FATCA, foreign earned income exclusions, or foreign tax credits, the cost of hiring a qualified accountant goes up fast.

If your situation is complex, this isn’t something you want to DIY. You’ll want an accountant who understands the tax laws in both your home and destination countries, especially if you're dealing with international income, retirement accounts, or business ownership.

And yes, this is one more thing to budget for before you make the move.

Start Building Your Support Network Early

The good news? You're not alone. Americans all over the world are navigating this exact issue—and many are willing to share their advice.

Start by networking in your target country—online or in-person. Look for expat Facebook groups, relocation forums, or other digital communities. Chances are, someone else has already solved the problem you’re facing—and they might be able to recommend the perfect tax professional.

A great accountant may not be the most exciting part of living abroad, but when it comes to building a successful life abroad, they’re an invaluable piece of the puzzle.

Did you find this helpful? Are you planning a move abroad? Work with me to make your move from a place of clarity and organization.