(NOT) born in the US, never lived, worked or visited the US. Does that mean you still have to file taxes?
Do I have to file US taxes if I live outside the United States?
If you are considered a US person — for example because you were born in the United States, hold an American passport, or have a green card — you are required to file a tax return in the US every year, even if you live abroad.
On this page, we explain why, what it means for you, and how to avoid unnecessary stress or problems.
Tax liability
The United States is the only developed country in the world that imposes a tax obligation on its citizens, regardless of where they live or work — with or without a US passport, green card, or any other US status. On this page, we provide a brief explanation of the law, its practical consequences, and the emotional impact it can have on the people affected.
Yes, if you are considered a US person, you are required to file a tax return — based solely on your American citizenship.
Whether filing will result in you paying actual taxes in the US depends on personal circumstances, and double taxation treaties made with the country in which you live and or work.
Not filing taxes in the US is a criminal offense.
When did the worldwide US tax obligation begin?
The American worldwide tax system was introduced around 1860. At that time, the country was in the middle of a civil war, and many people tried to avoid military service by moving abroad.
To punish and discourage this, a law was passed to tax Americans even if they lived outside the country. After the war, the law remained in place, based on the idea that citizenship comes with a price — the honor and privileges of holding a US passport.
The law has now been in effect for more than a hundred years, but many people never knew about it (or chose to ignore it).
What is FATCA and why am I only hearing about it now?
In 2010, President Obama introduced FATCA (Foreign Account Tax Compliance Act) to track down American citizens hiding undeclared money abroad.
This law requires all financial institutions — banks, insurance companies, pension funds, etc. — worldwide to report the details of all American clients to the US government.
Failure to comply results in exorbitant fines. In addition, the US signed agreements with many governments to ensure enforcement of this law.
Initially, the law mainly affected Americans living in the US who had not declared their foreign bank accounts. These individuals could face fines of up to hundreds of thousands of dollars, not to mention criminal charges.
Why do I have to pay U.S. taxes if I live abroad?
American people living in America, who failed to report their foreign bank accounts, could expect high fines. These could rise to sometimes up to hundreds of thousands of dollars. Also, they were being charged with a criminal offense. Americans living abroad are now also being actively investigated (often for the first time).
Fortunately, the American government and its Tax Authorities (IRS) do make allowances for this group. Americans living abroad, who were unaware of this law, have the one-time option to file their taxes via a special amnesty program. This prevents fines and is called Streamlined procedure.
This can’t be true?
We, the founders of Americans Overseas, were born in the Netherlands and received our passports via our (American) mother. When we heard about this law for the first time in 2012, we did not believe it was true (this cannot be happening). We felt anger (why are they allowed to do this), fear (will I be fined or get into trouble), and panic (what should I do?). Unfortunately, indeed, there is a global American tax duty. We could not find any information when asking the local government. We were told to contact the IRS by the consulate and the IRS itself proved impenetrable.
Why we started Americans Overseas
That’s why we started this initiative: to provide reliable information, prevent unnecessary panic, and offer no-obligation assistance through a network of affordable professionals.We are now also a recognized discussion partner for multiple parliaments and government agencies on this issue.
There is still a long way to go before any real change happens — if it happens at all. But it may be comforting to know that in 90% of the cases we receive, the solution is straightforward, and there is no actual tax payment owed to the US.
Thanks in part to our efforts, some governments now provide basic information about US tax obligations, such as Rijksoverheid.nl in the Netherlands.
How does filing US taxes from abroad work?
If you are tax liable in the US but live abroad, you are required to file a Form 1040 each year.
You will often also need to include extra forms, such as:
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FBAR: for reporting foreign bank accounts
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Form 8938 (FATCA): for reporting foreign financial assets
You will often not have to pay anything due to exclusions or tax treaties — but the reporting obligation remains.
What if I’ve never filed before?
Almost everyone we speak to who hears about this for the first time ends up using the Streamlined Procedure.
It’s an amnesty program from the IRS that allows you to catch up without penalties.
This program has been available for some time, but it could continue for years — or be stopped tomorrow.
(The IRS generally communicates in a rather aggressive and anxiety-inducing way.)
What does the tax treaty between the US and other countries do?
The United States has tax treaties with many countries to prevent double taxation.
These treaties determine which country is allowed to tax specific types of income, such as wages, pensions, or dividends.
How the treaty applies depends on your specific situation. It often plays a key role in determining whether you actually have to pay taxes in the US or only file a return.
Do I have to report my savings or foreign bank accounts?
The US does not have a wealth tax like some countries do.
However, capital gains — for example from selling property or stocks — are taxable.
There are also reporting requirements for foreign bank accounts.
If you have more than $10,000 across one or multiple foreign accounts, you are required to file an FBAR each year.
Do you have questions or concerns?
We had many questions ourselves — and we can imagine you do too. Many of the questions we once had are now answered in our knowledge centre, such as:
- When am I liable to pay taxes
- Do I have to pay extra taxes
- Can’t I simply provide my passport
- What is FATCA?
- I received a notification from the bank, etc.
Still unsure? Call us for a free consultation, or speak directly with a qualified US tax specialist from our network — no strings attached.
Written by Daan Durlacher
Co-founder
Daan Durlacher, co-founder of Americans Overseas, belatedly discovered his US Person status and associated tax liability. He founded the company with Michael Littaur in 2012 to inform and assist others with U.S. tax issues.
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