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Individual Tax / Foreign Tax Compliance

Foreign Tax Compliance Services for US Taxpayers Abroad

End-to-end foreign tax compliance services for US citizens, green card holders, and dual nationals. FBAR, FATCA Form 8938, foreign earned income exclusion, and streamlined disclosure handled by a CPA team that speaks to the IRS so you don’t have to.

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The Numbers-First Proof

How the Right Foreign Tax Strategy Can Cut Your Global Tax Bill in Half

US citizens and green card holders owe US tax on their worldwide income no matter where they live. Without proper planning, that can mean paying tax twice on the same dollar: once to the country where you earn and again to the IRS. With coordinated use of the Foreign Earned Income Exclusion, Foreign Tax Credit, and tax treaty positions, most of that double taxation disappears. To see how this works, let us assume a US citizen living in Singapore earning $250,000 of foreign salary and $40,000 of foreign investment income.
Without Foreign Tax Planning
Default US Filing with No FEIE and No FTC Election

$68,500

The full $290,000 of worldwide income flows through US brackets at up to 35% federal plus 3.8% Net Investment Income Tax. No Foreign Earned Income Exclusion is claimed because Form 2555 was never filed. Foreign taxes already paid in Singapore sit unused because Form 1116 was skipped. You pay the IRS on top of what you already paid abroad.
With Proper Foreign Tax Compliance
Coordinated FEIE + Foreign Tax Credit + Treaty Positions

$7,900

$126,500 of salary excluded under the Foreign Earned Income Exclusion (Form 2555). Remaining salary and investment income offset by Foreign Tax Credits from Singapore (Form 1116). Treaty positions applied where they strengthen the result. FBAR and Form 8938 filed on time, eliminating penalty exposure. Total tax savings: $60,600.
Let’s assume $290,000 of worldwide income earned abroad
Metric Without Planning With Compliance Strategy
Worldwide Income Reported $290,000 $290,000
Foreign Earned Income Exclusion $0 $126,500
Foreign Tax Credit Applied $0 $42,000
US Taxable Base $290,000 $121,500
Net US Tax Liability $68,500 $7,9000
Total Savings from Compliance Planning
$60,600
Net Tax = (Incomeworldwide × RateUS) – (FEIE + Foreign Tax Credit + Treaty Adjustments)
The Advisor Perspective

Where US Taxpayers Abroad Get Hit With the Biggest Penalties

Foreign tax compliance is the most aggressively enforced area of the US tax code. US citizens living abroad, dual nationals, green card holders, accidental Americans, foreign asset holders, cross-border investors, US executives on international assignment, and retirees overseas all face the same four exposures. The penalties for getting any one of them wrong can exceed the original tax owed by ten times or more.
⚠ FBAR Non-Filing

Missed FinCEN Form 114 Can Cost $10,000 Per Account Per Year

Any US person with foreign financial accounts exceeding $10,000 in aggregate at any point during the year must file FinCEN Form 114 (FBAR). Non-willful failures carry a $10,000 penalty per violation, and willful failures can reach the greater of $100,000 or 50% of the account balance. The IRS routinely assesses these penalties per account per year, meaning a single forgotten foreign bank account across five years can cost $50,000 or more in penalties alone.
⚠ FATCA and Form 8938

FATCA Reporting Runs Alongside FBAR, Not Instead Of It

Form 8938 under FATCA is a separate filing from the FBAR, with different thresholds (starting at $50,000 for domestic single filers, $200,000 for those living abroad) and different asset scope. Foreign pensions, foreign mutual funds, and cash-value foreign life insurance all count. The penalty for failing to file Form 8938 is $10,000 per year, rising to $50,000 for continued failure after IRS notice. Most international filers need to file both the FBAR and the 8938 every year.
⚠ PFIC Investment Traps

Foreign Mutual Funds Can Be Taxed at Over 50%

Passive Foreign Investment Company (PFIC) rules catch US citizens holding almost any foreign mutual fund, ETF, or pooled investment vehicle. Without a timely QEF or Mark-to-Market election, gains are taxed at the highest ordinary rate plus a punitive interest charge that can push the effective rate above 50%. Form 8621 is required annually for each PFIC held. Many expats hold PFICs for years without realizing it and face multi-year back-filings to correct the exposure.
⚠ Late or Missed Filings

Streamlined Disclosure Can Wipe the Slate Clean If You Qualify

US taxpayers who have fallen behind on foreign filings can usually resolve the situation through the IRS Streamlined Filing Compliance Procedures. Non-residents face zero penalty under the Streamlined Foreign Offshore Procedures if eligible. Domestic filers face a reduced 5% miscellaneous penalty rather than the full FBAR penalty stack. Timing matters: the program closes to anyone already under IRS examination, so acting before an IRS notice arrives is essential.
Who This Is For

The Foreign Tax Compliance Scope We Cover for Every Client

Every US taxpayer with foreign income, foreign assets, or time spent abroad has a different compliance profile. Here is the full scope we evaluate when onboarding a new client with cross-border tax obligations.
Foreign Tax Compliance Checklist

5 / 5 Complete

Who We Work With
We serve US citizens living abroad, green card holders outside the US, dual nationals, accidental Americans, US executives on international assignment, global mobility employees, digital nomads and remote professionals, retirees living overseas, cross-border investors, founders with foreign subsidiaries, high-net-worth families with international assets, and non-residents with US-source income. Engagements range from annual filings to multi-year streamlined disclosures and voluntary correction programs.
Annual Federal and International Return Preparation
Form 1040 preparation with Form 2555 for the Foreign Earned Income Exclusion, Form 1116 for the Foreign Tax Credit, Form 8833 for treaty-based positions, and coordinated state filings where residency remains. Every form is filed together so the positions reinforce rather than contradict each other.
FBAR and FATCA Reporting
FinCEN Form 114 (FBAR) for all foreign financial accounts exceeding the $10,000 aggregate threshold, Form 8938 (FATCA) for specified foreign financial assets above the applicable threshold, and Form 3520 and 3520-A for foreign trusts and large foreign gifts. Reviewed annually against updated account balances and filing thresholds.
PFIC and Foreign Entity Analysis
Identification of Passive Foreign Investment Company holdings, Form 8621 preparation for each PFIC, evaluation of QEF and Mark-to-Market elections, Form 5471 for controlled foreign corporations, and Form 8865 for foreign partnerships. We also flag Subpart F and GILTI exposure for any ownership position reaching 10% or more.
Streamlined Disclosure and Voluntary Correction
For taxpayers who have fallen behind, we prepare Streamlined Foreign Offshore or Streamlined Domestic Offshore Procedures submissions, IRS Delinquent International Information Return Submission Procedures packages, and reasonable cause statements. Our goal is to bring you into compliance with the lowest penalty exposure the facts allow.
Quick Eligibility Snapshot
Factor What We Look For
Filing status US citizen, green card holder, or US-source income earner
Foreign account aggregate $10,000+ triggers FBAR filing
Foreign asset value $50,000+ (domestic) / $200,000+ (abroad) triggers FATCA
Residency profile Living abroad, dual-resident, or multi-country year
Compliance history Current filers or catch-up via streamlined procedures

Get Ahead of the IRS Before the IRS Gets Ahead of You

Foreign account data is now shared automatically between more than 100 countries and the IRS. The window to come forward voluntarily is narrower every year. Start your compliance review before a notice arrives.
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Expert FAQs

What foreign tax compliance services do US taxpayers abroad actually need?
Most US taxpayers living abroad need five core services in place: annual Form 1040 filing with Form 2555 and Form 1116, FBAR (FinCEN Form 114) reporting, FATCA Form 8938 filing, PFIC analysis and Form 8621 preparation where applicable, and coordinated state residency planning. Capital Tax delivers all five under one engagement, with streamlined disclosure support available for taxpayers who need to catch up on prior years.
Yes. The United States is one of only two countries that taxes based on citizenship rather than residency. US citizens and green card holders must file a Form 1040 every year reporting worldwide income, regardless of where they live or where the income was earned. You may owe little or no US tax after the Foreign Earned Income Exclusion and Foreign Tax Credit, but the filing requirement itself is independent of what you owe.
The FBAR (FinCEN Form 114) is filed with the US Treasury’s Financial Crimes Enforcement Network and covers foreign financial accounts when the aggregate balance exceeds $10,000 at any point in the year. Form 8938 is filed with your federal tax return under FATCA and covers specified foreign financial assets, with filing thresholds that vary based on residency and marital status. The two reports have overlapping but not identical asset scope, and most international filers need to file both every year.
Yes, in most cases. The US tax code offers three primary tools to prevent double taxation: the Foreign Earned Income Exclusion (Form 2555), the Foreign Tax Credit (Form 1116), and tax treaty positions (Form 8833). Used together, they typically eliminate double taxation on salary, self-employment income, and foreign-taxed investment income. The right combination depends on your country of residence, income mix, and long-term plans. Capital Tax models each option before filing to make sure you claim the lowest legal tax liability across both jurisdictions.
The Foreign Earned Income Exclusion (Form 2555) allows qualifying taxpayers to exclude up to $126,500 (2024 amount, indexed annually) of foreign earned income from US taxation. To qualify, you must meet either the Physical Presence Test (330 full days in a foreign country during any 12-month period) or the Bona Fide Residence Test (establishing genuine residency in a foreign country for an uninterrupted tax year). The exclusion applies only to earned income such as salary and self-employment, not to investment income, pensions, or capital gains.

Disclaimer: This is not tax advice, and it is recommended to consult a tax professional, as every tax situation is unique.