Navigate the complexities of US expat taxes, including the Foreign Earned Income Exclusion (FEIE), foreign tax credits, and relevant tax treaties.

If you’re building a new life in Europe, understanding your US tax responsibilities is key. You’re in good company—the rules affect thousands of Americans working and creating abroad, and once you know the basics, it gets a lot simpler.

Let’s kick off with one of the most important breaks for US expats, the Foreign Earned Income Exclusion (FEIE). For 2025, you can exclude up to $130,000 of foreign-earned income, which means you avoid paying US tax on most of your salary earned overseas. If you are married and both spouses qualify, your family can double that benefit. To take advantage, you’ll need to qualify under the Bona Fide Residence Test or the Physical Presence Test. The first looks at whether you’re truly settled in your new country for the tax year, and the second counts at least 330 full days you spent outside the US in any 12-month period.

You’ll also want to know about the Foreign Tax Credit. This credit helps you avoid being taxed twice on the same income. In simple terms, if you’re paying taxes in your host country, you can claim credits for those payments against what the IRS thinks you owe. Most US expats end up owing little or nothing because these credits and exclusions can work together.

Many countries have US tax treaties that make expat life smoother. Treaties might let you avoid social security taxes in both countries or give you relief from particular local taxes. Each agreement is different, so if you’re in France, Germany, or Spain, find out which special rules apply to you.

For every step, you’ll fill out a few key IRS forms. Expect to complete Form 2555 for the FEIE, Form 1116 for the Foreign Tax Credit, and possibly Form 8833 if you use a treaty benefit. Keep track of your time abroad and all local income—it will pay off at tax time. If you’re self-employed, make sure to review totalization agreements, which help you avoid paying social security taxes twice.

Remember, planning ahead makes the whole process easier. Take advantage of the tools and calculators that streamline your paperwork, and don’t forget to file even if you think you owe nothing. Put these strategies to work so you can focus on your European adventure, not your next IRS letter. Ready to take the next step? Schedule a consultation.