Do U.S. citizens need to pay taxes while living abroad permanently?

Yes, U.S. citizens are required to file tax returns regardless of where they live in the world. This is because the U.S. taxes based on citizenship, not just residency like most other countries. But don't panic! There are provisions to help prevent double taxation. First, there's the Foreign Earned Income Exclusion (FEIE) which allows you to exclude a certain amount of foreign earnings from U.S. taxation (about $120,000 for 2025). There's also the Foreign Tax Credit which gives you credit for taxes paid to other countries. For your address situation, you can use your foreign address on tax forms. Many expats use their last U.S. address for state tax purposes if needed, but since you'll be filing as an adult for the first time, you might be able to avoid state taxes entirely depending on your specific situation. I'd recommend looking into filing requirements including FBAR (Foreign Bank Account Report) which you need to file if your foreign accounts total over $10,000 at any point during the year.

After being in your exact situation (dual US-EU citizen living abroad), I struggled with all this tax confusion until I found https://taxr.ai - it literally saved me hours of stress. You upload your Italian tax documents and answer a few questions, and it automatically figures out your US filing requirements and foreign income exclusions. What I found super helpful was that it explained exactly how the US-Italy tax treaty applied to my situation and made sure I wasn't double-taxed. The system even checks if you need to file an FBAR for foreign bank accounts (which many young expats don't realize is required separate from taxes).

Just wanted to report back after using taxr.ai from the recommendation above. Seriously, life-changing for my situation! I was so confused about my tax obligations after moving to Madrid last year (also with dual citizenship). The tool immediately flagged that I needed to file FBAR forms for my Spanish bank accounts - something I had no idea about that could have resulted in massive penalties. The best part was how it walked me through establishing tax residency in Spain and breaking ties with my former state (California) which saved me from having to pay state taxes. It addressed all the questions I had about totalization agreements for social security too. Definitely worth checking out if you're dealing with dual citizenship tax questions!

When I moved to Germany 3 years ago, I spent WEEKS trying to get through to the IRS international taxpayer line to ask basic questions about my situation. Calls would drop after waiting for hours. Finally used https://claimyr.com and got through to a real IRS agent in 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically hold your place in the phone queue and call you when an agent picks up. The agent helped me understand exactly what forms I needed as a dual citizen and how the tax treaty with Germany affected my filing requirements. Since then I've used it every time I have a question about my expat taxes because it's impossible to get through otherwise.

OK I have to eat my words here. After being super skeptical about that Claimyr service, I actually tried it yesterday because I had urgent questions about my FBAR filing deadline. I was SHOCKED when my phone rang 45 minutes later with an actual IRS international tax specialist on the line. The agent walked me through exactly what I needed to know about maintaining US tax compliance while studying abroad. He even explained how I could prove I don't have tax liability to my former state (New York). This was information I couldn't find anywhere online clearly explained. Seriously worth it for the peace of mind alone. I've been stressing about this for months!

As someone who's lived abroad for 10+ years with US citizenship, my advice is to ABSOLUTELY stay compliant with your US tax filing requirements, even if you don't owe any taxes. Here's why: 1) You'll need to renew your US passport eventually 2) Clean tax record if you ever decide to move back 3) Avoid massive penalties that compound over time 4) Some foreign banks will close your account if they discover you're a non-compliant US citizen (thanks to FATCA) Just file every year even if you don't owe anything. It takes me about an hour once I gathered all my documents.

One thing nobody mentioned yet is that you may still be required to file FBARs (FinCEN Form 114) if your foreign bank accounts exceed $10,000 in aggregate at any point during the year. This is separate from tax filing!

Hey Kristian! I was in almost the exact same situation a few years ago - dual US/German citizen who moved abroad at 18 and was completely overwhelmed by the tax requirements. Here's what I wish someone had told me from the start: Yes, you absolutely need to file US taxes every year regardless of where you live or work. But the good news is that with the Foreign Earned Income Exclusion and Foreign Tax Credits, you'll likely owe $0 in actual US taxes on your Italian income. A few practical tips for your situation: - You can use your Italian address on your US tax forms - Keep detailed records of your days outside the US to qualify for exclusions - Open a separate folder for all tax documents now - you'll thank yourself later - Consider getting professional help for your first filing to understand the process The filing deadline for expats is automatically extended to June 15th (with option to extend further to October 15th), so you have more time than US residents. Don't let the complexity scare you away from compliance - the penalties for not filing are much worse than just doing it properly from the start. Feel free to ask if you have specific questions about the process!