Moving abroad comes with a very specific kind of optimism. New city. New routine. A fresh start that feels lighter somehow. Taxes, understandably, don’t make the emotional cut. They feel like something you’ll circle back to once the important stuff is sorted
tax return
Moving abroad comes with a very specific kind of optimism. New city. New routine. A fresh start that feels lighter somehow. Taxes, understandably, don’t make the emotional cut. They feel like something you’ll circle back to once the important stuff is sorted.
That delay is where most first-year surprises begin.Not because expats are careless, but because no one really sits you down and explains how quietly different the rules can be once the move is done.
Surprise #1: Paying tax locally doesn’t end your U.S. filing obligation
This one catches people off guard, even those who consider themselves fairly organized.
The U.S. taxes based on citizenship, not where you live. Most countries do the opposite. So when you start paying tax in your new home country, it feels logical to assume the U.S. side fades out.
It doesn’t.
You may still need to file a U.S. tax return, even if you owe nothing. Filing and paying aren’t the same thing, but they often get mentally bundled together. That’s how people end up skipping both.
Plenty of expats only learn this after their first year is already behind them. It’s common. It’s also easier to handle early than later.
Surprise #2: The “temporary year” still counts
The first year abroad often feels provisional. Maybe the job is a contract. Maybe the visa is short-term. Maybe you’re testing the waters.
From the IRS’s perspective, though, income earned is income earned. Whether you planned to stay six months or six years doesn’t really change the filing expectation.
What makes this tricky is that first-year decisions quietly become templates. Skip filing once and it feels easier to skip it again. File casually without understanding what matters, and that approach tends to stick.
By the time the move feels permanent, the habits already are.
Surprise #3: FBARs exist, and no one warns you about them
This is the surprise almost everyone wishes they’d known sooner.
If your foreign bank accounts ever crossed a certain threshold during the year, the U.S. expects a separate disclosure called an FBAR. It’s not part of your tax return. It’s not a tax. And most local banks and accountants never mention it.
So people assume there’s nothing to do.
The first time many expats hear the term “FBAR” is years later, usually in a tone that suggests they should have known already. In reality, the system doesn’t exactly advertise itself. Awareness in year one avoids a lot of unnecessary stress later.
Surprise #4: Local tax advice doesn’t automatically cover the U.S.
Local accountants do exactly what they’re trained to do. They make sure you’re compliant where you live. That’s their job.
The gap appears when expats assume that local compliance equals global compliance. For U.S. citizens, that’s rarely true.
When someone says, “You’re all set,” it’s worth asking, “From a U.S. perspective too?” That question often doesn’t come up in year one. And without it, assumptions fill the space.
This isn’t about bad advice. It’s about incomplete advice, given across different systems.
Surprise #5: Year one is when records are easiest and people keep the least
In the early months abroad, everything is current. Bank logins work. Payslips are easy to download. Exchange rates are recent.
And yet, recordkeeping often feels like something to worry about later.
Later is when documents disappear. Employers change platforms. Banks merge. What once took five minutes becomes a multi-hour hunt. Reconstructing early years is rarely impossible, but it’s always more annoying than it needed to be.
A small amount of organization in year one saves a disproportionate amount of effort later.
Surprise #6: Catching up is possible, but prevention is quieter
The good news is that the IRS does recognize that many expats fall behind unintentionally. There are ways to catch up when mistakes weren’t deliberate.
Still, fixing things after the fact carries more mental weight than setting them up properly from the start. Prevention doesn’t make for dramatic stories, but it does make for calmer ones.
Getting support during your first year abroad
Most first-year tax surprises don’t feel urgent until they suddenly do. By then, the move feels settled and the clean slate doesn’t quite feel so clean.
Expat Tax Online works with Americans living abroad, including those navigating their first year overseas. If you’re unsure how U.S. tax rules fit into your new life or which surprises are worth addressing now, speaking with an expat tax specialist can help you sort through the noise and make informed choices early.
It’s easier to build good habits than to unwind assumptions later.
Subscribe today by clicking the link and stay updated with the latest news!" Click here!
