Year-End Tax & Financial Planning Tips for US Expats with Global Income

As the year winds down, it’s the perfect time for US expats with foreign income to take stock and not just of their bank balances abroad, but of how their US tax, retirement, and investment strategies line up with their global lifestyle. In this episode of Passport to Wealth™, host Arielle Tucker, CFP®, EA, sits down with Emily Haines, CPA, founder of Xpatax Solutions LLC, to unpack smart year-end moves that can help expats stay compliant and build long-term financial health.

What’s different about expat year-end planning

Expats face a unique challenge: living and earning abroad means juggling two financial worlds. The US tax code, foreign earnings, currency changes, foreign pension systems, and local regulations that all interact in different ways. 

Emily emphasizes that small shifts (like exchange-rate changes or timing on contributions) can meaningfully affect how the US sees your income, credits, or retirement contributions. That’s why a dedicated “expat lens” makes all the difference before you hit submit on your return or make a financial move.

Nine Key Planning Moves to Review This Year

Here are the top strategies Emily and Arielle discuss useful whether you’re a seasoned expat or new to overseas living.

1. Re-evaluate FEIE vs. Foreign Tax Credit (FTC)

The decision to use the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit (FTC) isn’t “one-and-done.” With fluctuating currency rates and possible income changes, your optimal strategy may shift. If local income (when converted to USD) pushes you over thresholds or into a higher US tax bracket, FTC could offer better flexibility if you also have passive or investment income.

2. Time US Retirement Contributions Mindfully

A Roth IRA might seem appealing, but for expats it can be tricky. Income phase-outs, exchange rate effects, and local tax/treaty implications mean it could backfire. A traditional or rollover IRA may be safer if local country treatment of Roths is uncertain. If uncertain, waiting until you know final USD income (after exchange rate adjustments) can give you breathing room.

3. Review Foreign Pensions & Local Retirement Plans

Foreign pensions and local retirement accounts are common for expats, but they don’t always “play nice” with US tax rules. Whether it’s compliance, future distributions, or reporting, understanding how US law views those accounts now can save headaches down the road.

4. Audit All Foreign Financial Accounts — FBAR & FATCA

If you’ve opened new accounts (bank, brokerage, etc.) abroad, this is the moment to review them. FBAR requirements (and possibly FATCA) apply globally and with currency swings, thresholds can be triggered even if balances “feel” similar. Having a clean, up-to-date records list is a must-have expat “skill.”

5. Ensure US Tax-Form Delivery & Avoid Missing 1099s

If you still rely on a US mailing address (friends, family, etc.), you risk missing critical tax forms (1099, K-1, etc.). That can trigger IRS letters or late filings. Instead: switch to electronic delivery now and keep a checklist of what financial institutions you use such as a brokerage for US-based investments.

6. Think Twice Before Harvesting Gains or Losses

Selling US investments to harvest gains/no-gains, which is a common end-of-year move, may have unintended local tax consequences depending on your country of residence. Before doing it, run a dual-country analysis: what happens in the US, and what does your residence country require.

7. Manage Currency Risk — Maintain Local Cash Reserves

With dollar-euro (or other currency) fluctuations, what was a healthy savings cushion can shrink fast. Especially if you receive US-dollar income but spend in local currency having local-currency reserves can help you ride currency swings without stress.

8. Review Estate Planning, Gifting & Cross-Border Tax Implications

Gift- and inheritance-tax rules vary widely across countries. The US annual gift exclusion (e.g. USD 19,000 per recipient in 2025) may seem generous, but local tax law might trigger obligations. If you’re giving or receiving money across borders now’s the time to check both US and local rules.

9. Prepare for Next Year: Stay Updated & Flexible

Changes in exchange rates, global tax laws, and even staffing at tax authorities (like delays or system shutdowns) can affect filings. A light “check-in” mindset and flexible financial planning can help protect you from unexpected headaches.

Final Takeaway

If you’re living abroad don’t treat year-end like a typical US resident. For expats, thoughtful planning means looking at the interplay between currencies, local laws, retirement systems, and US reporting obligations. As Emily says, “small details” like exchange rate shifts, when you contribute to an IRA or how you hold savings can matter a lot.

If you take nothing else from this post: review your global finances before December 31 and make your next year easier and more secure.

Connect with Our Guest

Emily Haines, CPA, is the founder and CEO of Xpatax Solutions LLC, a firm dedicated to helping US expats manage the complexities of cross-border tax and financial planning. If you’d like to learn more or get personalized advice, check out her website or connect with her on LinkedIn.

More About Our Author

Arielle Tucker, CFP®, EA, is the host of Passport to Wealth™ and a cross-border financial planner committed to helping US expats and globally mobile professionals navigate tax, investment, and relocation challenges with confidence.

FAQs for US Expats 

What’s the best tax strategy for US expats: FEIE or Foreign Tax Credit?

It depends on your income, tax bracket, currency changes, and local tax rate. FEIE helps in low-tax countries; FTCs often work better in high-tax countries or for expats with investment income. Many expats reassess this annually.

Can US expats contribute to a Roth IRA?

Yes, but eligibility depends on your USD-converted income and whether your country treats Roths unfavorably. Many expats wait until the IRS publishes the official average exchange rate before contributing.

Do foreign pensions get taxed by the US?

Often, yes. The US may tax contributions, growth, or distributions depending on treaty rules and plan structure. Each pension must be reviewed individually.

When do expats need to file an FBAR?

You must file an FBAR if your combined foreign accounts exceed $10,000 at any point in the year. This includes checking, savings, investment accounts, and sometimes even foreign payment platforms.

How do exchange rate changes affect my expat tax return?

The IRS requires foreign income and taxes to be reported in USD. If the dollar weakens, your foreign income may appear higher in USD terms potentially affecting tax brackets, credits, and eligibility.

Are foreign investment accounts subject to PFIC rules?

Many non-US mutual funds and ETFs are considered PFICs, which can cause punitive U.S. tax treatment. Always check with a tax professional before investing in local funds abroad.

What should expats keep in local currency?

Emergency funds and near-term expenses (1–3 years) should be kept in local currency to avoid currency-risk surprises, especially in volatile years.

Are gifts from family taxable if I live abroad?

In the U.S., gifts under the annual exclusion aren’t taxable, but many countries impose their own gift tax rules. Even receiving money from abroad can create filing requirements.

When does the IRS e-file system shut down for expats?

Generally late November–January, though timelines shift year to year. If e-file is closed, you may need to mail in returns or wait until the system reopens.