US Expat Tax Calculator (2025)
Compare the Foreign Earned Income Exclusion against the Foreign Tax Credit side by side, and see exactly what self-employment tax still applies.
Wages or net self-employment profit actually earned while working abroad.
This calculator assumes full-year qualification (no day-count proration), the standard housing exclusion ceiling (not high-cost-city limits), and doesn’t model state “sticky residency” tax, FBAR/FATCA filing, or FTC carryforward. See the methodology section below for the full list.
US Expat Tax Calculator
The US taxes its citizens on worldwide income no matter where they live — one of only two countries that does this. That means an American working in Lisbon, Singapore, or Mexico City still owes the IRS a return every year, even if they’re already paying local income tax on the same money. Two main tools reduce or eliminate the resulting US tax bill: the Foreign Earned Income Exclusion (FEIE, Form 2555) and the Foreign Tax Credit (FTC, Form 1116). This calculator estimates both side by side for 2025 so you can see which one actually lowers your bill, plus the self-employment tax that neither one touches.
Foreign Earned Income Exclusion (FEIE)
For 2025, you can exclude up to $130,000 of foreign earned income from US tax (IRS Rev. Proc. 2024-40) — a married couple who both work abroad and both qualify can exclude up to $260,000 combined. On top of that, a Foreign Housing Exclusion can cover housing costs above a $20,800 base amount, up to a $39,000 ceiling in most locations (higher in 137 IRS-designated high-cost cities, not modeled in this calculator).
The part almost every DIY calculator gets wrong: excluded income doesn’t just disappear from the tax calculation — it still affects the rate applied to whatever income isn’t excluded. The IRS’s “Foreign Earned Income Tax Worksheet” effectively stacks your excluded income at the bottom of the bracket ladder, so your remaining taxable income starts getting taxed from a higher point than it would in isolation. This calculator applies that exact mechanism rather than just subtracting the exclusion from taxable income.
Foreign Tax Credit (FTC)
Instead of excluding foreign income, the FTC gives you a dollar-for-dollar credit against US tax for foreign income tax you already paid, up to a limit (roughly, US tax multiplied by the share of your income that’s foreign-source). If you’re in a higher-tax country than the US, the FTC can wipe out your US tax bill entirely — and unlike the FEIE’s hard dollar cap, unused credit can carry forward up to 10 years. The tradeoff: it’s more paperwork (Form 1116), and you generally can’t claim both the FEIE and the FTC on the same dollar of income.
Self-Employment Tax: The Part FEIE Doesn’t Touch
If you’re self-employed abroad — a freelancer, contractor, or business owner, not a W-2 employee of a foreign company — you generally still owe US self-employment tax (15.3% of net profit, covering both the employer and employee halves of Social Security and Medicare) even after fully excluding your income tax with the FEIE. The one exception: if your country of work has a US Social Security Totalization Agreement and you hold a Certificate of Coverage from that country’s system, you’re exempt. W-2 employees of a genuinely foreign (non-US) employer typically owe no US FICA/self-employment tax at all, since there’s no US employer withholding it.
Example: $90,000 Self-Employed in a No-Totalization Country
A single filer earning $90,000 in net self-employment profit abroad, fully qualifying for the FEIE, no housing exclusion, no other income: the full $90,000 is excluded (under the $130,000 cap), leaving $0 federal income tax. Self-employment tax still applies: $90,000 × 92.35% = $83,115 SE-tax base, taxed at 15.3% (Social Security + Medicare) = $12,716.60 — and half of that, $6,358.30, becomes an above-the-line deduction that would reduce federal income tax if there were any non-excluded income to tax. Total US tax owed: $12,716.60, all of it self-employment tax, none of it income tax.
What This Calculator Doesn’t Model
Day-count computation for the Physical Presence Test or Bona Fide Residence Test (you self-declare qualification); partial-year proration of the exclusion; high-cost-city housing ceilings (IRS Notice 2025-16); state income tax for residency-“sticky” states like California, Virginia, New Mexico, and South Carolina; Foreign Tax Credit carryforward tracking across years; the Child Tax Credit or any other credits; and FBAR (FinCEN 114) / FATCA (Form 8938) foreign-account reporting requirements, which are separate filing obligations from either tax calculation shown here.
Frequently Asked Questions
Do I still have to file a US tax return if I live abroad?
Yes. The US taxes based on citizenship, not residency — Americans abroad must still file Form 1040 every year regardless of where they live or whether they owe any tax, and separately report foreign bank accounts over certain thresholds (FBAR/FinCEN 114, FATCA/Form 8938) if applicable.
Does the Foreign Earned Income Exclusion eliminate self-employment tax?
No. The FEIE and Foreign Housing Exclusion only reduce income tax — self-employment tax (15.3%) still applies to the full net self-employment profit, unless your country of work has a US Social Security Totalization Agreement and you hold a Certificate of Coverage.
Should I always pick the Foreign Earned Income Exclusion over the Foreign Tax Credit?
Not necessarily — if you pay foreign income tax at a rate higher than the US rate, the Foreign Tax Credit can wipe out your US tax entirely and carry forward unused credit for up to 10 years, while the FEIE has a hard dollar cap ($130,000 for 2025). Note: switching away from the FEIE after claiming it triggers a 5-year lock-out before you can re-elect it.
What is the difference between the Physical Presence Test and the Bona Fide Residence Test?
The Physical Presence Test requires being physically present in a foreign country (or countries) for at least 330 full days in any 12-month period. The Bona Fide Residence Test instead looks at whether you’ve established genuine residency in a foreign country for an uninterrupted period including a full tax year. Either one qualifies you for the FEIE — this calculator doesn’t compute day counts, you self-declare that you meet one of them.
This calculator provides a simplified estimate of the Foreign Earned Income Exclusion and Foreign Tax Credit for 2025. It is not a substitute for Form 2555, Form 1116, or a qualified expat tax preparer — actual outcomes depend on your specific facts, day-count qualification, state residency status, and other factors not modeled here.
