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THIS WEEK ABROAD
If there’s one thing that nomads and expats regularly screw up, it’s taxes. And if there’s anything you don’t want to screw up, it’s what you owe the IRS.
We have everything you need to know in this week’s newsletter.👇
Tax & Money Corner
BIG EXPAT TAX ERRORS TO AVOID IN 2026
Living the dream, working from a beach in Bali or a cafe in Lisbon? Amazing. But here's the reality check: as a U.S. citizen or Green Card holder, your tax obligations follow you everywhere.
Let's break down the nine biggest tax traps and how to avoid them.
• Thinking You Don't Need to File
Every U.S. citizen or Green Card holder must file tax returns. Duh, right? But surprisingly, many people don’t realize they’re breaking the rules.
If you're self-employed (and many nomads are), you need to file once your net earnings hit just $400. Moreover, you’re still on the hook for 15.3% U.S. self-employment tax while living overseas. Even if you end up owing nothing, you still need to file to claim expat tax benefits.
• Ignoring the 183-Day Rule
Most countries use the 183-day rule for tax residency. Stay longer than that in a single tax year, and you're now a local tax resident who needs to report worldwide income. Some digital nomad visas offer temporary tax breaks, but they don't eliminate local obligations. Track your days carefully.
• Confusion on Tax Benefits
The Foreign Earned Income Exclusion (FEIE) lets you exclude up to $130,000 of foreign earned income—perfect for low-tax or no-tax countries. The Foreign Tax Credit (FTC) gives a dollar-for-dollar credit for foreign taxes paid, which is better for high-tax countries.
To qualify for the FEIE under the Physical Presence Test, you need to be outside the U.S. for 330 full days in a 12-month period. Even one miscounted day disqualifies you for the entire year. Track every border crossing and flight.
• Missing Foreign Bank Reporting Requirements
We recently covered the case of the New Zealand expat couple getting sued for millions by the U.S. DOJ, all because they failed to report their foreign bank accounts.
If your combined foreign bank balances exceed $10,000 at any point during the year, you must file an FBAR. This includes accounts with signing authority and closed accounts. Some expats also need Form 8938 (FATCA). Miss these filings? Expect significant penalties.
• Overlooking State Tax Obligations
Left California or New York? Your state might not have left you. Maintaining ties like a driver's license, mailing address, or bank accounts can keep you on the hook for state taxes.
For those who want to be free of these high-tax states forever, consider Savvy Nomad’s domicile service. Changing your residency to Florida can result in big tax savings over time.
Want more tax-saving strategies? Download our free 2026 Expat Tax Guide.
VIDEO OF THE WEEK
BEST EXPAT TAX SOFTWARE: EXPATFILE VS. MY EXPAT TAXES
Tax season is here, and if you're filing from abroad, you need software that actually understands expat tax situations. Two popular options are MyExpatTaxes and Expatfile—but which one fits your needs?
MyExpatTaxes starts at $175 for their base plan, with a Reviewed plan at $320 and Premium at $639. The standout feature? FBAR filing (Forms 114 and 8938) is included on all plans—something regular tax software like TurboTax doesn't offer. All plans support Schedule C for freelancers, and the Premium plan includes state filing plus access to corporate forms like 5471 and 8865.
Expatfile is more budget-friendly, starting at just $119 for their standard plan. The Premier plan ($159) adds Schedule C, while the Investor plan ($219) includes Schedule D and Form 8938. However, FBAR filing costs an extra $59, and many business forms aren't available at all.
Check out our new video review for a full breakdown of prices in 2026.
This newsletter is brought to you by SavvyNomad
Save an extra 4%-14.8% of your annual income with tax-savvy strategies. Change your domicile in the US: let Savvy Nomad help with the hassle.
