Living overseas can make your tax situation more complicated. Here are some common errors U.S. expats fall into—and how you can stay in compliance:

1. Not Filing a U.S. Tax Return 

It's easy for expats to assume they don't need to file if they earn foreign income. But as a U.S. citizen or green card holder, you must file, regardless of where you live.

2. Forgetting FBAR and FATCA

If your foreign bank accounts exceed $10,000, you must file an FBAR. If they exceed $50,000 ($100,000 on joint returns), FATCA Form 8938 may be necessary. Not filing these carries severe penalty fees.

3. Missing Exclusions or Credits

You may also be eligible for the Foreign Earned Income Exclusion (to $120,000+ in 2024) or Foreign Tax Credit. These can amount to a savings of a considerable amount of taxes owed—if you only claim it properly.

4. Not Completing State Taxes

A few states like California, New York, or New Mexico are "sticky" and will continue considering you a resident. You do need to break ties with your old state for you to avoid unnecessary tax.

Be proactive—filing late or in error can cost you. Use an expat tax professional familiar with both the U.S. and foreign systems.