Living abroad doesn't end your U.S. tax obligations

Summary

CNBC's Sharon Epperson reports on the US tax obligations facing Americans who study, live, or work abroad. The segment explains that US citizens must report worldwide income to the IRS and disclose foreign bank accounts of $10,000 or more, even though the foreign earned income exclusion can eliminate taxes owed for those earning under about $132,900. A University of Virginia student who studied in Spain says the tax implications would shape any decision to move abroad, and the IRS taxpayer advocate calls expat tax challenges one of the most serious problems for American taxpayers.

• Nearly one-third of surveyed Americans abroad did not know they must file US taxes.
• US citizens generally must report worldwide income to the IRS regardless of where they live.
• The foreign earned income exclusion can offset US taxes on income under about $132,900.
• Foreign bank accounts holding $10,000 or more must be reported as a filing requirement.
• The IRS taxpayer advocate calls challenges facing taxpayers abroad one of the most serious problems.
• Experts advise consulting tax professionals in both the US and the country of residence before moving.
• A student studying in Spain says tax consequences would affect a future decision to live abroad.