I am an American citizen living abroad in Italy - do I need to file US taxes?

Yes, the US is one of the few countries that taxes based on citizenship rather than residency. This means US citizens are required to file tax returns regardless of where they live in the world. The good news is that you likely won't owe any actual US taxes because of the Foreign Earned Income Exclusion (FEIE), which allows you to exclude up to $120,000 (for 2025) of foreign earned income from US taxation. Additionally, the Foreign Tax Credit can help offset US tax liability with taxes you've already paid to Italy. The bad news is you still have filing requirements. You'll need to file Form 1040 annually, and potentially Form 8938 (for foreign financial assets) and FinCEN Form 114 (FBAR) if you have foreign bank accounts that exceed certain thresholds.

I was in a similar situation (American born but living in Germany since I was 10). When I finally learned about the filing requirements at 26, I was freaking out! Then I found taxr.ai (https://taxr.ai) and it honestly saved me so much stress. They specialize in exactly these expat tax situations. Their system helped me understand which forms I needed to file and walked me through the Streamlined Foreign Offshore Procedures. They even have expertise in dual citizenship tax issues, which most regular tax services don't understand at all.

Just wanted to update after using taxr.ai from the recommendation above. I was skeptical at first because I'd been avoiding my US tax situation for almost 7 years, but it was WAY easier than I expected! The Streamlined Foreign Offshore Procedures were explained really clearly, and I was able to file my back taxes without any penalties. They even helped me understand that my Spanish pension plan had special reporting requirements I would have completely missed. If you're in the same boat as OP, definitely worth checking out. Wish I'd known about this years ago instead of stressing about it!

The worst part of dealing with US taxes abroad is trying to actually talk to someone at the IRS when you have questions. After waiting for WEEKS for a response to my question about FBAR filings, I found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was honestly shocked it worked. As an expat, it's nearly impossible to call the IRS international number without getting disconnected, but they somehow got me through right away. The agent was able to confirm exactly what forms I needed for my situation and gave me guidance specific to Italy-US tax situations.

I need to eat my words from my comment above. I was so skeptical about Claimyr that I decided to try it just to prove it wouldn't work... and I got connected to an IRS agent in 9 minutes! After 5 years of tax confusion as a US citizen in France, I finally got clear answers about my filing requirements. The agent confirmed I qualified for the Streamlined procedures and walked me through exactly which forms I needed. They even helped me understand that I don't need to renounce my citizenship like I was considering - the filing is annoying but not actually that bad once you know what you're doing. For anyone else in this situation - don't panic like I did for years! Get your questions answered and then handle the filing. It's not worth the stress of avoiding it.

Just wanted to add that renunciation of citizenship shouldn't be taken lightly. It costs $2,350 in fees, requires in-person appearance at a US embassy, and if you have significant assets, you might be subject to an exit tax. If your income is below the Foreign Earned Income Exclusion threshold (around $120,000 for 2025), you'd file but likely owe nothing. Many expats find that once they're caught up, annual compliance is just an annoyance rather than a financial burden.

Hey, Italian-American dual citizen here with personal experience on this exact issue! US taxes are definitely a pain, but it's manageable. For me, I use TurboTax to file each year. It costs about $100 for the version that handles foreign income. I take the Foreign Tax Credit instead of the FEIE because Italian taxes are higher than US taxes, so I never end up owing anything to the US.

As someone who went through this exact situation (dual US-Italian citizen who didn't know about filing requirements), I can tell you it's definitely stressful at first but totally manageable once you understand the system. The key thing is don't wait any longer - the longer you put it off, the more anxiety it causes. I was terrified for months before I finally dealt with it, and it turned out to be much less complicated than I imagined. Since you mentioned you're 24 and have never filed, you'll likely need to use the Streamlined Foreign Offshore Procedures that others mentioned. This is specifically designed for people in your situation who didn't know about the requirements. A few practical tips from my experience: - Gather all your Italian tax documents (they'll help show you've been paying taxes somewhere) - Make a list of all your bank accounts and their highest balances during each year - Don't stress about giving up citizenship yet - most dual citizens find the annual filing is just paperwork, not actual tax owed The Italian tax system is generally more aggressive than the US system, so between the Foreign Tax Credit and FEIE, you'll probably end up owing nothing. But yes, you still need to file the paperwork annually going forward. Feel free to ask if you have specific questions about the Italy-US situation!