Do U.S. citizens with dual nationality still have to file annual federal tax returns if living abroad in 2025?
Executive summary
Yes — U.S. citizens who also hold another nationality generally must still file an annual U.S. federal tax return on their worldwide income when living abroad if their income exceeds the regular filing thresholds; the United States taxes on citizenship, not just residence, and offers tools such as the Foreign Earned Income Exclusion (FEIE) (up to about $130,000 for 2025) and the Foreign Tax Credit to reduce or eliminate U.S. tax owed [1] [2] [3].
1. Citizenship-based taxation: the rule that drives filing obligations
U.S. federal tax law applies to citizens regardless of where they live: being a dual national does not by itself remove the obligation to report worldwide income to the IRS — dual citizens “must file US taxes annually on worldwide income” and are subject to the same core filing rules as other U.S. citizens [4] [5]. The IRS guidance for U.S. citizens and residents abroad reiterates that people living overseas generally must file income tax returns and pay estimated tax the same as those in the United States [6] [7].
2. When you actually must file: thresholds and timing
Filing is required only when your income meets the standard thresholds tied to filing status and age — for 2025 guidance sources cite sample thresholds (for example, single filers’ thresholds in 2025 are quoted around $13,850–$14,600 depending on the source and year cited) — so not every expatriate automatically owes tax but many must still file a return because the U.S. uses the same gross‑income filing tests as residents [8] [9] [10]. U.S. citizens abroad receive an automatic two‑month extension to file (to mid‑June for calendar‑year filers), though taxes owed are due by the regular April date unless paid earlier; further extensions (to October 15 or even a discretionary December 15 in some cases) are available [11] [7] [12].
3. Relief: FEIE, foreign tax credit and tax treaties that often reduce liability
The IRS and tax practitioners point to three primary tools that often prevent double taxation: the Foreign Earned Income Exclusion (FEIE — cited around $126,500–$130,000 for 2025 in multiple guides), the Foreign Tax Credit (dollar‑for‑dollar credit for foreign taxes paid), and tax treaties the U.S. has with many countries. Firms and guides estimate a large share of expat filers end up with little or no U.S. tax after applying these mechanisms (examples given: FEIE amounts and the claim that roughly 75% of U.S. citizens abroad end up with zero U.S. tax liability in one industry analysis) [2] [3] [13].
4. Reporting beyond Form 1040: FBAR, FATCA and extra forms
Filing a Form 1040 may not be your only duty. Expats often must file FinCEN FBARs if foreign financial account balances exceed $10,000 at any point in the year and may have FATCA Form 8938 reporting thresholds for foreign assets — failure to file those can carry separate, sometimes steep penalties [4] [14] [15].
5. Special categories and exceptions — dual‑status, expatriation, and “accidental Americans”
There are special rules for people who become dual‑status taxpayers during a year, and the IRS has different filing mechanics for dual‑status returns (write “Dual‑Status Return” across the top, etc.) [16]. Formal expatriation (renouncing U.S. citizenship) is generally the only way to stop citizenship‑based filing and tax obligations, and that brings its own tax rules and potential exit tax considerations; sources note that merely holding another passport won’t end U.S. obligations [5].
6. Common misunderstandings and enforcement context
A frequent misconception is that living abroad or holding another nationality automatically frees you from U.S. filing. Multiple practitioner and government sources stress that misconception can lead to penalties and that the IRS enforces information reporting (FBAR/FATCA) and has compliance pathways such as the Streamlined Filing Compliance Procedures for those who were unaware [8] [15] [12].
7. Practical takeaway and limits of this brief
If you are a U.S. citizen with dual nationality living abroad in 2025, confirm whether your worldwide gross income exceeds the filing threshold for your status — if it does, you must file Form 1040 (and possibly FBAR/FATCA forms) and you should evaluate FEIE or foreign tax credits to reduce tax owed [6] [2] [14]. This summary uses government guidance and expat‑tax practitioners’ reporting; it does not replace individualized tax advice and available sources do not mention your personal income, filing status, or whether you qualify for specific exclusions or treaty relief [7] [2].