2026 Expat Tax Updates: Filing Year Versus Income Year
The phrase “2026 tax season” mixes two different calendars: returns for 2025 income and planning for income earned during 2026. Put the tax year beside every limit and effective date before using it.
By Justin Malone, Co-Founder & CEOSources and review notes
Editorial source review, September 17, 2026: IRS: foreign earned income exclusion; IRS: US citizens and resident aliens abroad; IRS: 2026 Form 1099-DA instructions; IRS: remittance tax and April 2026 proposed regulations.
Quick Summary
The phrase “2026 tax season” mixes two different calendars: returns for 2025 income and planning for income earned during 2026. Put the tax year beside every limit and effective date before using it.
Key Takeaways
Use the right FEIE maximum
For 2025 income, the maximum foreign earned income exclusion is $130,000 per qualifying person.
Reconcile digital-asset statements
Broker digital-asset reporting is being phased in.
Review how overseas transfers are funded
The federal remittance transfer tax took effect January 1, 2026.
This article is part of our US Expat Tax Guide series. See also: Florida Residency for Expats
The phrase “2026 tax season” mixes two different calendars: returns for 2025 income and planning for income earned during 2026. Put the tax year beside every limit and effective date before using it.
Use the right FEIE maximum
For 2025 income, the maximum foreign earned income exclusion is $130,000 per qualifying person. For 2026 income, the maximum is $132,900. The latter generally belongs on a return filed in 2027. Eligibility, prorating and excluded-income limitations still apply. See the FEIE eligibility guide before using either figure.
Reconcile digital-asset statements
Broker digital-asset reporting is being phased in. Form 1099-DA reporting for transactions beginning in 2025 does not mean every broker reports basis for every asset. Basis reporting for certain covered assets begins under the 2026 rules. Transfers, older holdings and noncovered assets can leave gaps.
Match statements to wallet and exchange records. A missing form does not make a taxable transaction nontaxable, and proceeds alone do not establish gain. The crypto records guide explains the state-planning implications.
Review how overseas transfers are funded
The federal remittance transfer tax took effect January 1, 2026. The 1% tax targets covered transfers funded with cash, money orders, cashier’s checks or similar physical instruments. The IRS issued proposed implementing regulations in April 2026; proposed detail should not be presented as a finalized rule.
Check the funding-method guide and the provider’s transaction disclosure rather than assuming every overseas bank transfer is taxed.
Keep recurring obligations on the calendar
Worldwide-income reporting, foreign-account reporting and state residence reviews remain relevant. A new exclusion limit does not change where you actually lived or worked. Carry forward credit schedules, elections and prior-year balances, and ask whether foreign assessments have changed since the last US return.
Check what actually changed for you
- Which income year is being reported?
- Did the work location, employer, business structure or permanent home change?
- Were new foreign accounts or entities opened?
- Does a new reporting form omit information needed to calculate tax?
- Is a cited rule enacted, effective, proposed or merely announced?
Use the annual filing checklist to assign each resulting task.
Sources and scope
- IRS: foreign earned income exclusion
- IRS: US citizens and resident aliens abroad
- IRS: 2026 Form 1099-DA instructions
- IRS: remittance tax and April 2026 proposed regulations
Source review: September 17, 2026. This guide explains general rules and preparation steps. Your filing position depends on your facts and the rules for the relevant tax year.
FREE GUIDE
Get the FEIE Quick Guide
Understand your expat tax obligations in under 5 minutes.
- FEIE eligibility requirements
- Physical presence vs bona fide test
- Common expat tax mistakes
No spam. Unsubscribe anytime.
Frequently asked questions
- Which FEIE limit applies to a 2025 return filed in 2026?
- The 2025 maximum of $130,000, subject to eligibility and limitations.
- Are April 2026 remittance regulations final?
- The IRS release cited here describes proposed regulations; verify subsequent final guidance before relying on implementation details.
- Does Form 1099-DA always contain complete basis?
- No. Covered-asset rules and phased reporting can leave basis information incomplete.
Ready to make Florida your base?
Until you change it, your old state is still your domicile, and the burden of proving you changed it falls on you. We give you a real Florida street address, the paperwork that backs it up, and mail that follows you anywhere.
Billed annually, charged once. Cancel your renewal anytime. Or talk to us first
Stay Updated on Tax Home Compliance
Get monthly tips, IRS updates, and license tracking reminders delivered to your inbox.
No spam. Unsubscribe anytime.
Related Articles
Notarizing US Documents From Abroad: Why Identity Verification Fails and What to Do Instead
Remote online notarization is supposed to let Americans overseas sign US documents from anywhere. For long-term expats it often stops before it starts, because the identity check cannot generate questions about someone with no recent US data footprint. Florida law addresses this failure directly: if the databases do not hold enough information to authenticate you, the notary may not proceed. This guide explains the statutory requirements, why the wall exists, and the routes that still work.
Read Article2026 Remittance Tax: Check the Transfer Funding Method
The new federal remittance transfer tax does not apply to every payment sent abroad. Its practical screening question is how a covered remittance is funded: cash and specified physical instruments receive different treatment from qualifying account-funded transfers.
Read ArticleForeign Earned Income Exclusion: 2026 Eligibility and Limit
The foreign earned income exclusion is an election for qualifying foreign earned income. For tax year 2026, its maximum is $132,900 per qualifying person, subject to the qualifying period and other limits. Living overseas alone does not establish eligibility.
Read ArticleForeign Tax Credit: Income Categories and FEIE Coordination
The foreign tax credit can reduce US income tax attributable to qualifying foreign-source income that is also taxed abroad. The useful starting point is a country-by-country income and tax schedule, not a promise that every foreign tax payment produces a dollar-for-dollar refund.
Read ArticleUS Expat Filing Checklist: Returns and Foreign Accounts
An expat filing checklist should separate the income-tax return from foreign-account and entity reporting. A zero balance due on Form 1040 does not, by itself, remove the obligation to file either category.
Read ArticleMoving to Portugal: Coordinate Portuguese, US and State Taxes
A move to Portugal raises three connected questions: when Portugal treats you as resident, what the United States still requires, and whether your former US state retains a claim. Immigration approval answers none of those questions by itself.
Read ArticleRelated Services
Florida Residency for Expats
Maintain US ties while abroad. Florida address, mail forwarding, and tax documentation.
Learn MoreUS Expat Tax Calculator
Calculate federal taxes with FEIE ($132,900 exclusion) and Foreign Tax Credit.
Learn More