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.

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. For 2027 income, filed in 2028, it is $137,300 under IRS Rev. Proc. 2026-35; see the 2027 FEIE guide. Eligibility, prorating and excluded-income limitations still apply. See the FEIE eligibility guide before using any of these figures.

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.