US Expatriate Taxation

The United States is one of the few countries in the world that taxes its citizens on their worldwide income regardless of where they live. For the millions of Americans residing abroad -- including many with roots in Denver and Colorado -- this means that US tax filing obligations do not end when you leave the country. In fact, expat tax compliance is often more complex than domestic filing, with additional forms, elections, and reporting requirements that can create serious consequences if missed or handled incorrectly.

At Lanphier LLP, we have extensive experience preparing returns and providing tax planning for US expatriates in countries around the globe. Our Denver-based team understands the unique challenges that expats face: navigating the foreign earned income exclusion, claiming foreign tax credits, reporting foreign financial accounts, managing employer-provided housing benefits, and coordinating US obligations with local tax requirements in their country of residence. We work directly with our clients and, when needed, coordinate with their foreign tax advisors to deliver comprehensive, cross-border guidance.

Key Expat Tax Considerations

Foreign Earned Income Exclusion (FEIE)

The FEIE allows qualifying US expatriates to exclude a significant portion of their foreign earned income from US taxation. For 2024, the exclusion amount is over $126,000. However, the eligibility requirements are strict -- you must meet either the bona fide residence test or the physical presence test -- and the election must be made properly on your return. We help expats determine their eligibility, make the election correctly, and maximize the benefit.

Foreign Tax Credits

For expats in high-tax jurisdictions, the foreign tax credit may be more beneficial than the FEIE, or the two provisions may be used in combination. We analyze each client's situation to determine the optimal approach, taking into account the type of income, the foreign tax rate, and the interaction between the credit and the exclusion. This planning can save thousands of dollars annually.

Foreign Financial Account Reporting

US expatriates are required to report their foreign bank accounts and financial assets to both FinCEN (via the FBAR) and the IRS (via Form 8938). The thresholds, deadlines, and penalties differ between these two filings, and the consequences of noncompliance are severe. We ensure that all required disclosures are made accurately and on time.

State Tax Obligations

Leaving the United States does not automatically end your state tax obligations. Some states, including Colorado, have specific rules about when residency ends for tax purposes. We advise expats on their state filing requirements and help them properly sever state tax residency when appropriate.

Whether you recently moved abroad or have been an expat for years, our Denver team is here to help you stay compliant and minimize your combined US and foreign tax burden. Contact us to schedule a virtual consultation from anywhere in the world.