An expat, short for expatriate, is someone who lives outside their country of origin or citizenship, either temporarily or permanently.
For Americans, becoming an expat does not end US tax obligations, because US citizens are generally taxed on their worldwide income wherever they live.
Millions of people live outside the countries where they were born or hold citizenship. Some relocate for career opportunities, others move to join family, retire overseas, or experience life in another country.
These individuals are often described as expats or expatriates.
But what exactly makes someone an expat? Is an expat different from an immigrant? And does moving abroad change your tax responsibilities?
Although the term is commonly used to describe Americans living overseas, it applies to people of many nationalities.
For US citizens, understanding the meaning of expat is particularly important because living abroad can create additional tax and financial reporting responsibilities.
Key Takeaways: What It Means to Be an Expat
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Expat is short for expatriate and generally refers to someone living outside their home country.
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Expats may live abroad temporarily or permanently.
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Expat, immigrant, and digital nomad describe overlapping but different circumstances.
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Becoming an expat does not automatically change your citizenship.
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US citizens generally remain subject to US tax filing rules while living abroad.
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Foreign tax credits and exclusions may help reduce double taxation.
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Foreign bank accounts, investments, and businesses can create additional reporting requirements.
Expat Meaning and Key Characteristics
| Question | Explanation |
|---|---|
| What does expat mean? | A person living outside their country of origin or citizenship |
| Full term | Expatriate |
| Is an expat always American? | No, people of any nationality can be expats |
| Must an expat work abroad? | No, retirees, students, and family members may also be expats |
| Is an expat a permanent resident? | Not necessarily |
| Does becoming an expat change citizenship? | No, not automatically |
| Do American expats file US taxes? | Generally, when applicable filing requirements are met |
| Can expats avoid double taxation? | Often, through applicable credits, exclusions, or treaty provisions |
What Does Expat Mean?
The word expat is an abbreviation of expatriate, a term commonly used for someone who lives outside their native country or country of citizenship.
For example, an American who moves to Germany for employment may describe themselves as a US expat.
Similarly, a British citizen retiring in Spain or an Australian relocating to Singapore may be considered an expat.
The term does not have a universal legal definition. It is primarily a description of someone’s circumstances rather than a formal immigration or tax status.
Common Reasons People Become Expats
People move abroad for many reasons, including:
- Employment: Accepting a position with an overseas employer or transferring to an international office.
- Remote work: Working from another country while employed by a company elsewhere.
- Retirement: Moving to a country with a preferred lifestyle, climate, or cost of living.
- Family: Relocating because of marriage, a partner’s employment, or family connections.
- Education: Studying overseas for an extended period.
- Business: Starting or managing a company in another country.
An expat may remain abroad for a few months, several years, or the rest of their life.
Expat vs. Immigrant: What’s the Difference?
The terms expat and immigrant are sometimes used interchangeably, but they often carry different connotations.
An expat is generally described in relation to the country they left, while an immigrant is described in relation to the country they moved to.
For example, an American who relocates permanently to France could accurately be described as both an American expat and an immigrant in France.
| Term | Common meaning | Example |
|---|---|---|
| Expat | Someone living outside their home country | An American living in Japan |
| Immigrant | Someone who moves to another country to live there | An American settling in Canada |
| Digital nomad | Someone who works remotely while traveling or living in different locations | A freelancer working from Portugal |
| Nonresident | A legal or tax classification defined by a particular country | Someone classified as a nonresident under local tax rules |
There is no universal rule that expats must be temporary residents while immigrants must stay permanently.
The distinction is often based on context, personal preference, and how people describe their experience.
Types of Expats and Examples
Not all expatriates have the same lifestyle or legal circumstances.
Working Expats
Working expats relocate to another country for employment or business opportunities.
For example, an American software engineer might accept a position in Ireland and live there for several years.
Their income may be subject to Irish taxes while also remaining reportable under US tax law.
Retired Expats
Retired expats move abroad after leaving the workforce.
An American retiree living in Mexico may receive US Social Security benefits, pension payments, and investment income.
Although they no longer work, they may still have US tax filing obligations depending on their income.
Digital Nomads
Digital nomads work remotely while living or traveling abroad.
Some stay in one country for an extended period, while others frequently change locations.
Digital nomads may be expats, but their immigration status, tax residence, and employment arrangements can differ considerably.
Working remotely overseas does not automatically exempt someone from US or foreign tax obligations.
Long-Term and Permanent Expats
Some Americans move abroad permanently, marry local citizens, acquire another nationality, or establish businesses overseas.
Even after decades abroad, they generally remain US citizens unless they formally relinquish citizenship under applicable law.
What is an American Expat?
An American expat is generally a US citizen who lives outside the United States.
This includes Americans who relocate overseas for employment, retirement, family, or other reasons.
For example, someone born in Ohio who moves to Spain and lives there permanently may be considered an American expat.
The term can also describe Americans who grew up overseas and have spent most of their lives outside the United States.
However, being an American expat is not an official IRS classification.
For tax purposes, citizenship, residency status, income, and applicable tax rules are more important than whether someone describes themselves as an expat.
Do US Expats Still Have to Pay US Taxes?
US citizens generally remain subject to federal income tax on their worldwide income regardless of where they live.
This means an American expat may need to report income earned in another country, even if they have no US employer or US-source earnings. The US tax filing requirements for Americans abroad depend on factors such as income, filing status, and age.
Examples of reportable foreign income include:
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Salary from a foreign employer.
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Self-employment or business income earned abroad.
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Interest and dividends from overseas accounts.
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Capital gains from foreign investments.
However, having to file a US tax return does not necessarily mean owing US income tax.
Several provisions can help qualifying Americans abroad reduce double taxation.
Foreign Earned Income Exclusion
The Foreign Earned Income Exclusion allows eligible taxpayers to exclude a portion of qualifying income earned from working overseas.
For the 2026 tax year, the maximum exclusion is $132,900 per qualifying individual.
Eligibility depends on requirements involving foreign earned income, a foreign tax home, and either the bona fide residence test or physical presence test.
Living Abroad and Unsure What to File?
Universal Tax Professionals prepare US tax returns for Americans in 150+ countries and make sure you claim every exclusion and credit available.
Foreign Tax Credit
The Foreign Tax Credit may reduce US income tax when a taxpayer pays qualifying income taxes to another country. It is particularly relevant to Americans living in countries with relatively high income tax rates.
The appropriate treatment depends on the type of income, foreign taxes paid, and applicable limitations.
Understanding how the credit fits into the broader US expat tax filing rules can help Americans abroad determine which tax benefits apply to their situation and what additional reporting requirements they may have.
Foreign Financial Reporting for American Expats
Living abroad often means opening local bank accounts, investing through foreign institutions, or participating in overseas retirement plans.
Some of these assets may create additional US reporting obligations.
FBAR Reporting
American expats generally must file a Foreign Bank Account Report (FBAR) if the aggregate maximum value of their reportable foreign financial accounts exceeds $10,000 at any point during the calendar year.
The threshold applies to the combined value of the accounts, not each account separately.
The FBAR reporting requirements explain which foreign accounts count toward the threshold.
FATCA and Form 8938
Certain expats must also report specified foreign financial assets on Form 8938 when their aggregate value exceeds applicable thresholds.
The thresholds depend on filing status and whether the taxpayer qualifies as living abroad.
The FATCA reporting rules for expats explain how this requirement differs from the FBAR.
Americans who own foreign companies or certain investments may have additional filing obligations.
Does Moving Abroad Change Your US Citizenship?
Moving to another country does not automatically affect US citizenship.
An American can live overseas permanently, obtain foreign residency, or acquire another citizenship while remaining a US citizen.
For example, a US citizen who moves to Italy and later becomes an Italian citizen may hold both nationalities, subject to applicable laws.
Simply becoming a permanent resident of another country does not end US tax obligations.
Formally relinquishing US citizenship is a separate legal process and may involve additional tax requirements.
Planning Your Move Abroad?
Talk to a US expat tax professional before you relocate so your filings, accounts, and income are set up correctly.
Becoming an Expat: What to Consider Before Moving
Relocating abroad involves more than choosing a destination.
Before moving, Americans should consider several practical matters.
- Immigration and residency: Determine whether you need a visa, residence permit, or work authorization.
- Local taxes: Understand when your new country may treat you as a tax resident and which income it may tax.
- US tax obligations: Review how your employment, investments, and other income will be reported after moving.
- Banking and investments: Consider whether your existing financial institutions will continue serving you overseas.
- Healthcare and insurance: Review local healthcare eligibility and any private coverage requirements.
- Retirement planning: Understand how moving abroad may affect retirement accounts, pensions, and future withdrawals.
Tax residency and immigration residency are not necessarily the same. A person may qualify as a resident under one country’s tax laws without holding permanent immigration status there.
