Yes, they do.
As a U.S. citizen, your tax obligations don’t stop when you move abroad. Unlike most countries, the United States practices citizenship-based taxation. That means even if you live in most countries out of the US part or full-time, you are still required to file a U.S. tax return every year and report your worldwide income.
Why Citizenship-Based Taxation Matters
Most countries tax you based on residency. The U.S., however, taxes based on citizenship. If you hold a U.S. passport and earn income abroad—whether through employment, self-employment, or a business in another country—you’re required to file with the IRS.
What Needs to Be Filed?
At a minimum, you’ll likely need to file:
- Form 1040: Your U.S. tax return
- FBAR: If you hold over $10,000 in foreign bank accounts
- FATCA Form 8938: For high-value foreign assets
Additional forms may be required based on your financial situation
Don’t Panic, Plan
This doesn’t necessarily mean you’ll owe double taxes. The U.S. offers credits and exclusions that help expats reduce or eliminate their U.S. tax liability. The key is staying compliant and working with a professional who understands the cross-border tax system.
Failure to file timely may trigger SDO or SFO, see our website if you’ve not reported foreign income in the past on your US return.