How Trump Tax Reform Affect U.S. Expats

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Changes are coming to the United States tax code, which will certainly affect everyone.  Some are wondering how these changes are going to affect expats and we are here to clear that up with a brief review on how these tax codes will affect expats. Most will not see too many changes under the new Trump plan, but there are some changes to be aware of. Based on our previous article, if you are using foreign corporations, there may be a few more complications and if you file every year you will pay less and you will also see a larger tax credit if you are filing for foreign tax credits.


  • Alternative minimum tax must be calculated with other formulas and the higher alternative minimum tax must be paid. $70,300 and $109,400 are the respective amounts for singles and married couples that require the AMT
  • The child tax credit is being increased to $2,000 which probably won’t affect expats if they use FEIE it makes no difference without a child tax credit
  • FEIE which is Foreign Earned Income Exclusion should be adjusted annually and still allows expats to earn $100,000 and use FEIE
  • Foreign tax credits- some countries have higher taxes and expats who live there and work earn some tax credits which amount is used when they return to the U.S.
  • The affordable care act is being repealed. That’s great news for expats who live in other countries with health insurance there or those who are not free from mandated insurance requirements.  It’s also good for those who have an international policy that don’t comply with regulations set out by the affordable care act.

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  • Foreign account tax compliance act (FATCA) is not changed at all. Foreign banks will still report on those accounts held by U.S. citizens.
  • Expatriation taxes and gifts means that expats who have a net worth of over $2million or who have not filed taxes pay taxes when they leave the country. Under the new guidelines, their amount to be paid will be calculated by the maximum of the estate tax.
  • Gift and estate taxes have been doubled from $5.49million to $10.98 million. It should also be noted that the $10.98 limit will be phased out by 2023.
  • The standard deduction is being doubled to try and minimize the individual deductions. Most expats don’t use itemized deductions anyway, so this isn’t a change.
  • The change in tax brackets for most Americans will be going from 7 brackets to three. For expats the brackets are 25% for $102,100 and 33% for $112,500 and above. 
  • E-commerce stores or expats who ship goods into the United States but have no physical location in the U.S. will be required to pay taxes.


All in all, these changes are pretty beneficial for everyone and that includes expats.  It will be interesting to see how these changes truly affect everyone as they are rolled out, but most people are pretty excited about them. 

Please,  contact us with your questions in relation to U.S. Expats Taxes.

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized in Tax Planning for Real Estate, Hedge/Equity Funds, Fintech, Crypto, Expats, IRS Debt Resolution and Offshore Strategies. You can email him to fa@fascpaconsultants.com and follow us on Facebook : FAS CPA & Consultants.

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