Expat Tax Advisor — US & Canadian Expat Tax Planning and Preparation

What is expat tax?

Expat tax is the combined US (or Canadian) tax treatment of a citizen or resident living abroad. For US citizens, it is federal tax on worldwide income regardless of where they live, plus FBAR, FATCA, and state considerations. For Canadians, it is residency-based tax with departure-tax consequences on leaving.

Expat tax preparation is the annual filing. Expat tax planning is everything upstream — residency decisions, entity placement, asset timing — that determines what the annual filing looks like.

Do expats have to pay US taxes?

Yes, if they are US citizens or green-card holders. The US is one of only two countries that tax citizens on worldwide income regardless of residence. Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) reduce but rarely eliminate the obligation. State tax residency may continue to apply depending on the state and the facts of the move.

Renouncing citizenship is a real option for long-term expats, but it triggers exit-tax analysis under IRC §877A for covered expatriates. Do not renounce without a written analysis first — the tax on unrealized gains can be material.

How expat tax preparation actually works

A proper expat tax preparation engagement includes the Form 1040 return, Schedule B, Form 2555 (FEIE) or Form 1116 (FTC) depending on your position, FBAR (FinCEN 114), Form 8938 (FATCA) when thresholds apply, and any PFIC, GILTI, or Subpart F analysis triggered by foreign holdings.

Missing any of those is how expats end up with penalty notices two years later. The fee difference between "cheap" and "complete" expat tax preparation is usually the difference between filing and correct filing.

• Form 1040 with FEIE or FTC positioning
• FBAR (FinCEN 114) for foreign accounts over $10K aggregate
• Form 8938 (FATCA) when asset thresholds apply
• PFIC analysis for non-US mutual funds and some ETFs
• GILTI / Subpart F for owners of foreign corporations
• State residency analysis (not all states let you leave easily)

Why expat tax planning matters more than preparation

Preparation fixes last year. Planning fixes the next ten. A well-sequenced exit — residency severance, asset disposition timing, entity placement, new-country tax alignment — compounds annually. A badly sequenced exit triggers tax on gains you never realized, penalties on forms you did not know existed, and a state residency audit you cannot easily close.

The most common expensive mistake: moving first, calling an advisor second. Decisions made in the 90 days before departure are worth more than anything that happens after.

US expat tax planning — exit tax and covered-expatriate analysis

US citizens renouncing face IRC §877A exit tax if they meet covered-expatriate criteria: net worth over $2M, average annual tax liability over a threshold, or failure to certify compliance. Covered expatriates are taxed as if all worldwide assets were sold the day before expatriation.

Planning around this involves gifting strategies, entity restructuring, timing of renunciation relative to the tax year, and pre-expatriation asset repositioning. None of it works retroactively — the plan needs to start 12–24 months before renunciation.

Canadian expat tax planning — departure tax modeling

Canadian residents leaving Canada trigger a deemed disposition on most non-registered assets — a departure tax. Unlike US exit tax, this applies on residency severance, not on renunciation. Some assets (like certain real property, RRSPs under specific conditions) are excluded; others are not.

Departure-tax modeling before you sever residency tells you the tax cost of leaving, identifies assets worth restructuring before departure, and establishes the valuations CRA will use later. Skipping this step is how Canadians end up with five-figure departure-tax bills they did not expect.

Finding the right expat tax advisor

The "best expat tax advisor" is the one whose engagement letter covers both preparation and planning, who coordinates with an in-country accountant in your new jurisdiction, and who will tell you when a piece of your plan is outside their expertise.

Expat tax advisors near you geographically matter less than expat tax advisors aligned to your citizenship and new country. A CPA in Houston who specializes in US expats in Europe is more useful than a generalist two blocks away.

Who this fits

Entrepreneurs preparing for a sale and considering relocation afterward, high-income earners whose move is 12+ months out, families planning a multi-year international move, and digital-asset holders with material unrealized gains. Also: Americans or Canadians who have already moved but never engaged a planner and are now filing blind.

If the move is happening in under 90 days, call us immediately — several choices close fast, and some cannot be undone after departure.