IRA / Roth IRA abroad taxation

No — a US IRA is maintained by a US custodian under a domestic trust structure, so it stays a US account for FBAR purposes even if it holds foreign currency or foreign investments; the currency or assets inside the account don't turn it into a reportable foreign financial account. FBAR reporting is triggered by where an account is held, not by what it's invested in, which is the same reasoning that keeps a US 401(k) off the FBAR when you move abroad. TFX's 401(k)-abroad guide explains this US-custodian distinction in more detail.

Not on the excluded portion — income you shelter with the Foreign Earned Income Exclusion doesn't count as compensation for IRA contribution purposes, so if all your foreign earned income is excluded, you have no taxable compensation left to base a contribution on. If you earn more than the FEIE cap, though, the leftover taxable income above that cap still counts as compensation and can support a contribution — for example, an expat earning $162,900 who excludes the full $132,900 FEIE cap can still contribute based on the remaining $30,000. TFX's IRA and Roth IRA guide for expats walks through this compensation calculation.

Expats use the same IRA contribution limits as any other US taxpayer — $7,000 for 2024, or $8,000 if you're 50 or older — there's no separate, reduced, or increased limit just for living abroad. The real constraint for expats isn't the limit itself, but how much taxable compensation is left after applying the FEIE, since you can't contribute more than you have in remaining taxable earned income. TFX's IRA contribution limits guide and its expat IRA guide cover how the two interact.

You generally have three options: leave the 401(k) with your former US employer's plan, roll it directly into a traditional IRA to preserve tax deferral without triggering withholding, or withdraw the funds and pay ordinary income tax plus a possible 10% early-withdrawal penalty if you're under 59½. You can only keep contributing to the same 401(k) if you're still employed by the sponsoring US employer; once you're on a foreign employer's payroll, that plan's contributions stop, though the account itself can typically stay invested. TFX's 401(k)-abroad guide compares these three paths in detail.

Yes, as long as you have taxable compensation remaining after the FEIE and your modified adjusted gross income falls under the Roth phase-out range — and there's a quirk that works in expats' favor here: unlike most other MAGI calculations, the FEIE-excluded amount is not added back when figuring MAGI for Roth eligibility. That means claiming the exclusion can actually lower your MAGI and help you qualify for Roth contributions even as a relatively high earner, which is the opposite of how the FEIE affects most other income-based thresholds. TFX's Roth IRA guide for expats explains this MAGI calculation.

Tax law doesn't stop you, but in practice many US brokerages restrict or refuse to open new IRA accounts for customers with a foreign mailing address — so the real obstacle for expats is often finding a willing institution, not meeting the IRS eligibility rules. Brokerages like Charles Schwab International and Interactive Brokers are generally more expat-friendly, but policies vary by country and change over time, so it's worth confirming directly with the institution rather than relying on an outdated list. TFX's guide to investing as an American expat covers which brokerages accommodate overseas account holders.

IRA distributions are taxed the same way abroad as they would be in the US — traditional IRA withdrawals are ordinary taxable income (with a 10% penalty if you're under 59½ and no exception applies), while qualified Roth distributions remain tax-free. The practical wrinkle is that some custodians restrict sending distributions to a foreign bank account or require a US mailing address on file, which is why many expats keep a US bank account specifically for retirement account transactions; Required Minimum Distributions still apply on the same schedule regardless of where you live. TFX's IRA and Roth IRA guide for expats covers distribution mechanics in more detail.

Becoming an expat doesn't change how your IRA is taxed — growth inside a traditional IRA stays tax-deferred and Roth growth stays tax-free (for qualified distributions), exactly as it would if you'd stayed in the US, with no new tax triggered just by moving abroad. What does change is that your host country may separately tax IRA distributions under its own rules, so you could face taxation on the same withdrawal from both sides, with a tax treaty or the Foreign Tax Credit sometimes providing relief. TFX's expat IRA guide covers how US tax treatment carries over once you move abroad.