Expat & Nonresident Tax Returns
U.S. citizens and green card holders file a U.S. return on worldwide income no matter where they live. Relief comes from the foreign earned income exclusion or the foreign tax credit, which are chosen, not automatic. Nonresidents with U.S. income file Form 1040-NR instead. Blue Sage prepares both and the reporting that comes with them.
What's included
- Form 1040 for citizens and residents living abroad
- Form 1040-NR for nonresidents with U.S. source income
- Foreign earned income exclusion and housing exclusion
- Foreign tax credit calculations and carryovers
- Treaty position analysis and disclosure
- Substantial presence test and residency determination
- Streamlined filing procedures for taxpayers who fell behind
- Coordination with FBAR and foreign asset reporting
Who this is for
Americans working or living outside the United States, dual citizens who did not realise they had a U.S. filing obligation, and nonresidents earning U.S. rental income, business income, or gains on U.S. property.
It is also for people who have not filed for several years and want to become compliant without making the situation worse. Streamlined procedures exist precisely for taxpayers whose failure to file was not wilful, and using them is usually far better than filing quietly and hoping.
Deadlines and rules worth knowing
| Item | What applies |
|---|---|
| Who must file | U.S. citizens and green card holders, on worldwide income, regardless of where they live |
| Automatic extension | Taxpayers living abroad generally receive an automatic extension to file beyond the standard April deadline |
| Foreign earned income exclusion | Excludes a capped amount of foreign wages, but only if claimed on a filed return and only if you meet a residence or physical presence test |
| Foreign tax credit | Credits tax paid to another country against U.S. tax on the same income. Often better than the exclusion where foreign rates are high. |
| Nonresidents | File Form 1040-NR on U.S. source income only |
| Substantial presence | A day-count test that can make a visa holder a U.S. tax resident without them realising it |
| Behind on filing | Streamlined procedures may allow catching up with reduced or no penalties where the failure was not wilful |
How we work
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Review what exists
We read last year’s return and whatever records you have. Most of what needs fixing is visible quickly.
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Fixed quote in writing
Scope and price before anything starts, counting entities, states, and any cleanup needed.
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File and maintain
Returns prepared and filed, notices answered, and a projection before year end.
Questions
Do I have to file a U.S. tax return if I live abroad?
Yes, if you are a U.S. citizen or green card holder and your income is above the filing threshold. The United States taxes on citizenship, not residence. Relief from double taxation comes through the foreign earned income exclusion or the foreign tax credit, but both must be claimed on a filed return u2014 neither applies automatically.
What if I have not filed U.S. returns for several years?
Streamlined filing compliance procedures exist for taxpayers whose failure to file was not wilful. They generally require filing a limited number of back returns and foreign account reports, with reduced or no penalties. Coming forward through the correct procedure is almost always better than filing quietly or waiting to be found.
What is the substantial presence test?
It is a day-count test that determines whether a non-citizen is treated as a U.S. tax resident. It weighs days present in the current year and the two preceding years. Meeting it means filing as a resident on worldwide income, which surprises many visa holders who assumed their home country was the only one taxing them.
Last reviewed 11 September 2026 by Fahadun Nabi, Founder, Blue Sage Tax and Accounting Inc.. General information, not advice for your specific situation.
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