June 2025 webinar recap: Ask a CPA anything about US expat taxes
In June 2025, Taxes for Expats (TFX) hosted another live “Ask a CPA Anything” webinar designed specifically for US expatriates and returning clients with questions about international tax obligations.
Participants from around the globe joined the live session to get real-time answers from experienced CPAs. This session was led by Andrew Coleman, a seasoned CPA with a Master’s in Accounting and a valued member of the TFX expert team.
The session focused on unraveling the complexities of US taxation while living abroad – including how to minimize liability, navigate cross-border situations, and comply with IRS requirements.
The webinar recording is now available on our YouTube channel:
Key webinar insights
1. Filing obligations don’t go away with distance
Even if you’ve lived abroad for decades and never plan to return, US citizens must file annual tax returns. Renouncing citizenship is the only path to ending this obligation – and it involves its own tax and legal consequences.
2. Crypto reporting: What you need
To file crypto taxes, download your full transaction history and all Forms 1099-B/K from exchanges. Import the data into crypto tax software to generate Form 8949 and Schedule D for your return.
3. Local pension contributions & GILTI rules
Irish residents can reduce their taxable income by contributing to Irish-approved pensions. In Finland, expats can benefit from the GILTI high-tax exception if local taxes stay above 18.9%.
A drop below that threshold can trigger US tax on profits, unless strategic elections (like Section 962) are made.
4. Owning or sharing foreign property
Being listed on a property deed abroad could mean US reporting obligations if the property generates income through rent or sale.
5. Mixed-status marriages and filing choices
Married to a non-US spouse? Filing jointly can provide tax breaks if their income is low, but it also increases reporting complexity. In many cases, Married Filing Separately is simpler and avoids disclosing foreign income/assets of the non-US spouse.
6. SIPP and trust reporting in the UK
SIPPs (Self-Invested Personal Pensions) are often treated as foreign trusts by the IRS – triggering Form 3520 and 3520-A. These forms can be burdensome and increase audit risk.
7. FATCA Compliance and Help With Form 8938
Several attendees needed urgent help with Form 8938 deadlines. If you're in the same boat, contact TFX support to escalate and connect with a specialist fast.
Special focus: FEIE vs. FTC
1. What’s the difference?
- FEIE (Form 2555): Excludes up to ~$120,000 of earned income if you qualify via time-based tests. Best for low-tax countries.
- FTC (Form 1116): Reduces US taxes dollar-for-dollar based on foreign taxes paid. Ideal for high-tax countries and can be carried forward for 10 years.
2. How to qualify for FEIE
Physical presence test: Be outside the US for 330 full days in a 12-month period.
Bona fide residence test: Establish a tax home in another country for a full calendar year, with evidence of permanent residence.
3. Real-life FEIE example
If you earn $70,000 abroad and qualify for FEIE, you’ll report it on your Form 1040, but exclude it via Form 2555, reducing your US taxable income to $0.
4. When to use FTC instead
If you're taxed heavily in your host country, the FTC allows you to offset US tax liability without excluding the income. This keeps your US earned income on record – useful for mortgage applications and retirement account contributions.
5. Can you use both?
Yes – but not on the same income. A mixed strategy often works best: use FEIE for salary, FTC for investment income or bonuses taxed abroad.
6. How to choose
Choosing between FEIE and FTC depends on your income, tax rate abroad, and financial goals. Most professionals run both scenarios to see which saves you more – and you can amend past returns if needed.
Live Q&A highlights
High taxes in Ireland
Q: How do I reduce my tax burden while living in Ireland?
A: Maximize pension contributions and leverage FEIE or FTC to minimize US liability.
US–New Zealand treaty
Q: Is there a treaty between the US and NZ?
A: Yes. Signed in 1982, amended in 2008.
Capital gains in Germany
Q: Germany doesn’t tax long-term gains – do I still owe US tax?
A: Yes, the US taxes all worldwide capital gains. Losses can also be reported.
Foreign property ownership
Q: I’m listed on a deed with my wife’s inherited UK property. Do I have to report anything?
A: Only if you rent it out or sell it. Then you must report your share of the income.
Dividends as a non-US citizen
Q: I’m a Colombian investor. What US taxes do I owe?
A: 30% withholding on US-source dividends. Gains are generally not taxed unless you spend over 183 days in the US
US Social Security while abroad
Q: I’m 62 next year. Can I receive benefits while living outside the US?
A: Yes, if you meet eligibility rules. You should file via the Streamlined Procedure to get back into compliance.
Renouncing citizenship
Q: What are the tax consequences?
A: You may owe an exit tax if your net worth exceeds $2 million or you have high average annual tax liability.
Capital gains on primary residence
Q: I sold my home in the UK. Will the US tax me?
A: The US exempts up to $250K ($500K if married) of gain. If your gain exceeds that, tax may apply – reduced by available credits.
Bottom Line
The June 2025 Ask a CPA Anything webinar helped clear up the complicated reality of expat taxation – from choosing between FEIE and FTC to reporting crypto and cross-border investments.
Whether you're facing your first US return from abroad or managing complex offshore income, the TFX team is here to help.
