US Tax Filing for Americans Living in Portugal
Portugal has become one of the most popular destinations for American expats, offering a favourable climate, relatively low cost of living, and — until recently — the attractive Non-Habitual Resident (NHR) tax regime. Regardless of Portugal's local tax rules, US citizens and green card holders must still file a US federal tax return every year. We handle your FEIE, Foreign Tax Credit, and FBAR obligations, applying the right strategy for your Portugal-based income and assets.
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What this filing may involve
Every situation is different. The forms below commonly apply — your specific filing may vary.
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- ✓Everything in Standard
- ✓Schedule C & SE for self-employment
- ✓Multiple income sources and currencies
- ✓Everything in Premier
- ✓Foreign Earned Income Exclusion (Form 2555)
- ✓Foreign Tax Credit (Form 1116)
- ✓FBAR filing (FinCEN 114) included
- ✓Everything in Expat
- ✓Schedules D & E for investments and rentals
- ✓Foreign asset reporting (Form 8938)
- ✓FBAR filing (FinCEN 114) included
Frequently asked questions about US Tax Filing for Americans Living in Portugal
Do I still owe US taxes if I pay taxes in Portugal?
You may still need to file, but you won't necessarily owe US tax. The Foreign Tax Credit allows you to offset US tax liability by the amount of Portuguese income tax you paid. Many Americans in Portugal owe little or nothing to the IRS as a result, though the filing obligation remains.
Does Portugal's NHR status affect my US filing?
NHR affects your Portuguese tax obligations, not your US filing requirement. However, it does affect the strategy we use: since NHR can result in lower Portuguese taxes on certain income, the Foreign Tax Credit offset may be smaller, making FEIE more attractive in some cases. We analyse this for your specific income mix.
I have a Portuguese bank account — do I need to report it?
Yes. If all your foreign financial accounts combined exceeded $10,000 at any point in the year, you must file FinCEN Form 114 (FBAR). If the total value of your foreign financial assets exceeds $200,000 (or $300,000 at any point in the year) you may also need Form 8938.
Can I claim the FEIE while living in Portugal?
Yes, provided you meet either the Physical Presence Test (330 qualifying days outside the US in a 12-month period) or the Bona Fide Residence Test (established residency in a foreign country for an uninterrupted period). Most Americans living full-time in Portugal qualify under the Bona Fide Residence Test.
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