US Tax Filing for American Retirees Living Abroad
Retiring abroad is increasingly popular among Americans, but it introduces a new layer of tax complexity beyond the standard expat picture. Retirees must navigate how Social Security benefits are taxed (and whether a tax treaty modifies this), how foreign pension income interacts with US tax, IRA distributions taken from abroad, potential FBAR obligations, and the reality that Medicare does not cover overseas healthcare. We provide calm, expert guidance through every aspect of the retiring-abroad tax picture.
Get started with your filingWho this is for
- ✓ American retirees who have relocated abroad full-time
- ✓ US citizens living abroad and receiving Social Security, pension, or IRA distributions
- ✓ Retirees with foreign bank accounts, property, or investment income overseas
- ✓ Americans who are considering retiring abroad and want to understand their tax obligations
- ✓ Surviving spouses of US citizens abroad dealing with inherited retirement accounts
What this filing may involve
Every situation is different. The forms below commonly apply — your specific filing may vary.
- 1 Form 1040 — US Individual Income Tax Return (required even in retirement if income exceeds thresholds)
- 2 Form 2555 — Foreign Earned Income Exclusion (if still earning foreign earned income in retirement)
- 3 Form 1116 — Foreign Tax Credit for local taxes paid on pension or investment income
- 4 FinCEN Form 114 (FBAR) — foreign bank and financial accounts over $10,000
- 5 Form 8938 — FATCA reporting for foreign financial assets above thresholds
- 6 Form 8833 — treaty-based position if a tax treaty affects Social Security or pension taxation
Documents usually needed
- 📄 SSA-1099 (Social Security Benefit Statement)
- 📄 1099-R for IRA, 401(k), or pension distributions
- 📄 Foreign pension statement or equivalent from overseas pension authority
- 📄 Foreign bank account statements
- 📄 Investment account statements (US and foreign)
- 📄 Prior year US tax return
- 📄 Residency documentation (lease, visa, foreign ID)
How Nomadic.Tax works
AI-assisted preparation with licensed professional review — every time.
Tell us about your retirement income sources — Social Security, IRAs, pensions, investments
Upload your SSA-1099, 1099-R, and any foreign income documents
Our CPAs apply the correct treaty positions and credits to minimise US tax on retirement income
Your return is reviewed and e-filed — including FBAR if applicable
When human review matters
- ⓘ Some US tax treaties exempt US Social Security from US taxation for residents of certain countries — our CPAs check treaty applicability
- ⓘ Required Minimum Distributions from IRAs must begin at age 73 regardless of where you live — missing RMDs carry a 25% excise tax
- ⓘ Foreign pension income may qualify for a treaty exemption or credit — each country's treaty is different
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Relevant plans
Choose the package that best fits your situation, or view all plans.
- ✓ Automatic online filing
- ✓ One federal + one state return
- ✓ W-2, 1099 and basic deductions
- ✓ 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 American Retirees Living Abroad
Is my Social Security income taxable if I live abroad?
For most retirees living abroad, up to 85% of Social Security benefits may be taxable at the US federal level using the standard income tax calculation. However, several US tax treaties (e.g. with Canada, Germany, Italy) contain provisions that can exempt or reduce the US tax on Social Security for residents of those countries. We check treaty applicability for your country.
Do I need to take Required Minimum Distributions while living abroad?
Yes. RMD rules apply to all US persons regardless of where they live. If you have a traditional IRA or employer retirement plan, you must begin taking RMDs at age 73. Failure to take RMDs results in a 25% excise tax (reduced to 10% if corrected within two years) on the amount not distributed.
I receive a pension from a foreign country — how is this taxed in the US?
Foreign pension income is generally taxable in the US for US citizens, but tax treaty provisions often provide relief. The correct treatment depends on the specific treaty and the type of pension. German, Canadian, and UK pensions, for example, each have treaty provisions that our CPAs assess on a case-by-case basis.
Can I still contribute to a Roth IRA if I live abroad and use the FEIE?
No. Roth IRA contributions require earned income not excluded by the FEIE. If you use Form 2555 to exclude all of your foreign earned income, you typically cannot make new Roth or traditional IRA contributions for that year. However, you can continue to hold existing IRA accounts and they continue to grow tax-free.