Guide
Returning to the United States: The Tax Checklist for the Year You Move Back
Returning to the United States does not change whether you file — a citizen was already filing — but it changes almost everything about how. The year of the move can split into two periods with different rules, the foreign earned income exclusion is prorated or lost, and the Form 8938 thresholds drop sharply once you no longer live abroad.
- The move year is the hard year. Two sets of rules can apply to one calendar year.
- The foreign earned income exclusion is tied to qualifying days abroad, so a mid-year move usually prorates or eliminates it.
- Form 8938 thresholds fall by three quarters or more once you no longer qualify as living abroad.
- The FBAR does not care where you moved. It follows the calendar year and the accounts.
- Records held abroad get harder to obtain the longer you wait. Gather them before you go.
- Several choices around the move expire once you have landed. The useful conversation happens before the flight.
Who this applies to
- U.S. citizens and green-card holders moving back after a period living abroad
- People who returned in a recent year and have not yet filed for it
- Anyone closing foreign accounts, pensions or investments as part of the move
- People arriving in the United States and becoming tax resident for the first time
Who this may not apply to
- Short trips home that do not change your tax home or your residency status
- People who never established a tax home abroad, for whom the exclusion was never in play
- Non-tax immigration questions, which are a different profession entirely
Why the year of the move is the difficult one
For a U.S. citizen, moving back does not switch the filing obligation on — it was already on. What it does is end the set of reliefs that depended on living abroad, usually part-way through a tax year. The result is a single calendar year in which the first months and the last months are governed differently, and where a rule applied to the whole year gives the wrong answer.
For someone who is not a citizen or green-card holder, the move can create a dual-status year: a nonresident for part of the year and a resident for the rest. The IRS describes dual status as being both a resident and a nonresident alien in the same year, taxed on worldwide income for the resident portion and on U.S.-source income for the nonresident portion. Dual-status filers face real restrictions — no standard deduction, and head of household and joint filing generally unavailable — which is why the return often looks worse than expected before anyone has done anything wrong.
What changes, and in which direction
| Item | While living abroad | After returning |
|---|---|---|
| Foreign earned income exclusion | Available if the bona fide residence or physical presence test is met | Prorated to qualifying days, and unavailable for income earned after the tax home returns to the U.S. |
| Form 8938 threshold (unmarried) | More than $200,000 at year end, or more than $300,000 at any time | More than $50,000 at year end, or more than $75,000 at any time |
| Form 8938 threshold (married filing jointly) | More than $400,000 at year end, or more than $600,000 at any time | More than $100,000 at year end, or more than $150,000 at any time |
| FBAR | Required above $10,000 aggregate at any time in the calendar year | Unchanged — same threshold, same calendar year |
| Filing deadline | Automatic extension to June 15 | Ordinary April deadline returns |
The checklist
Dates and presence
Fix the dates before memory blurs them. The date you gave up your foreign tax home, the date you arrived, and a day-by-day record of presence for the year of the move and the year either side. The foreign earned income exclusion tests turn on an uninterrupted period of bona fide residence or on 330 full days in a 12-month period, and neither can be reconstructed from an impression.
Account maximums, not closing balances
For every foreign financial account held at any point in the calendar year, record the highest value during the year, not the balance when you closed it. FBAR and Form 8938 both report maximum values. An account closed in March still has a reportable high-water mark, and a foreign bank that has lost you as a customer is markedly less helpful about historic statements.
Foreign tax records
Foreign tax returns, assessments and proof of tax actually paid or accrued, with dates. These support the foreign tax credit, and the credit is often what reduces the U.S. bill to nothing. Getting them later, from abroad, in another language, is materially harder than getting them now.
Pensions, investments and anything unusual
Foreign pension statements, employer scheme documents, and details of any foreign mutual funds or pooled investments. These are the items most likely to carry reporting requirements beyond the ordinary return, and the ones most likely to need specialist review. Flag them early rather than discovering them at filing time.
Anything already filed, and any IRS contact
Copies of returns and FBARs already filed for the relevant years, and any letters received from the IRS. If the IRS has already made contact about a year, that fact changes which routes remain open, so it needs to be on the table at the first conversation rather than the third.
Decisions that are easier to make before you land
Some of the choices around a move stop being available once it has happened, which is why the tax conversation is more useful before the flight than after it. None of what follows is a recommendation — each cuts both ways depending on rates, timing and what else is going on in the year — but they are the questions worth having answered in advance rather than discovered in April.
- Whether income realised before or after the residency change lands in a materially different position, and whether any of its timing is actually within your control
- What happens to a foreign pension on the move, and whether any election or transfer decision has a deadline attached to it
- Whether foreign pooled or mutual fund holdings should be reviewed before the move, since these carry reporting consequences that are harder to unwind once you are back
- Whether closing foreign accounts is worth the loss of easy access to historic statements you will need for the reporting
- Which state you are landing in, and when its residency clock starts
- Whether foreign tax on income earned in the move year will be assessed in time to be claimed, and what happens if it is not
The common thread is that the reporting looks backwards over the whole calendar year while the decisions only work forwards. Once the year has closed, the only remaining question is how to report what happened.
Common mistakes on the move year
- Claiming the full foreign earned income exclusion for a year in which you only qualified for part of it
- Applying the higher living-abroad Form 8938 threshold to the year you came home
- Treating the FBAR as ending on the day of the move rather than covering the calendar year
- Missing the ordinary April deadline because the June 15 date had become habit
- Closing foreign accounts before recording their peak values for the year
- Assuming foreign tax paid late in the year can no longer be credited without checking how it accrues
When to get specialist help
A dual-status year, a foreign pension of any complexity, foreign pooled investments, an interest in a foreign company or trust, or several unfiled years behind the move all warrant review beyond an ordinary return. So does any prior IRS contact about the years in question.
Sources
This page is general information about how the U.S. rules are written. It is not advice about your return, and it does not create a client relationship. Which rules apply to you depends on facts this page cannot see — your citizenship and residency history, where you lived and worked in each year, what you own and where it is held, and what has already been filed.
The information on this site is general in nature and is not tax, legal, or accounting advice for your situation. Tax law changes and the right answer depends on facts we would need to review with you. Please speak with a qualified professional before acting on anything you read here.
Questions people ask about this
Does returning to the U.S. change my international reporting?
Yes, substantially. The Form 8938 thresholds drop once you no longer qualify as living abroad, the foreign earned income exclusion is prorated to your qualifying days or lost, and the automatic June 15 filing extension no longer applies. The FBAR is the main thing that does not change.
Can I still claim the foreign earned income exclusion for the year I moved back?
Often partly. The exclusion depends on meeting the bona fide residence or physical presence test, and the maximum is prorated by qualifying days. Income earned after your tax home returns to the United States is not foreign earned income at all. The calculation is fact-specific and depends on exact dates.
I closed my foreign accounts when I moved. Do I still file an FBAR?
If the aggregate value of your foreign financial accounts exceeded $10,000 at any time during that calendar year, yes. The test is a high-water mark across the year, not the balance at year end, so a closed account still counts for the period you held it.
What if I have not filed for the years I was abroad?
There are established procedures for coming back into compliance, and which one fits depends on the facts — particularly whether the failure was non-willful and whether you were living outside the United States. See the guide on Streamlined and other delinquent filing paths.
Which records are hardest to get later?
Historic bank statements showing peak balances, foreign tax assessments, and pension scheme documentation — particularly from institutions in countries you no longer live in and where you are no longer a customer. Gather these before you move if you can.
What should I bring to a first conversation?
Dates of the move, a presence record, the highest value of each foreign account during each year, foreign tax paid, pension and investment statements, and copies of anything already filed. Do not send account numbers or tax documents through a website form — see the documents to bring to your CPA.
Keep reading
- International tax: the overviewHow the return, the FBAR and Form 8938 fit together, and which path applies to you.
- Dual citizenship and U.S. tax filingYes — a dual citizen who holds U.S. citizenship generally files a U.S. return on worldwide income, no matter which passport they travel on or where they live. Citizenship is what creates the obligation, so acquiring another nationality does not end it. What usually changes is how much tax is owed, not whether a return is due.
- Form 1116 vs. Form 2555Form 2555 excludes a capped amount of foreign earned income from U.S. tax. Form 1116 credits foreign income tax you actually paid against your U.S. liability. They relieve double taxation differently, they reach different kinds of income, and you cannot take a credit for tax on income you have excluded. Which is better depends entirely on your facts.
- Personal Tax1040 preparation, tax-saving strategy, and multi-state or expatriate filings.
- Tax Planning & AdvisoryThe plan that ties entity choice, timing, property and exit decisions together.
- Documents to bring to your CPAWhat to gather before a first conversation — and what not to send through a website form.
Talk to a tax expert
Tell us what you are dealing with and we will tell you how we would handle it.