🥁 Roll Call: US Citizens Abroad, It’s Tax Time

Happy Sunday, expat family 😎

I'm excited like a kid on Christmas eve… this week we launch The Expat Hustle Podcast! My first guest is going to help us unpack who we are in our new country, especially if this resonates:

You've gone from being highly competent and capable back home to just being another person who needs help filling out a form. Your sense of humour doesn't fit the cultural norms, and even the way you dress makes you stick out like a sore thumb. You've scaled the visa mountain, found a place to live, maybe even started learning the language. You're doing all the things you're supposed to do…

…but something drastic is missing.

If you've popped out the other side of the honeymoon phase and you're wondering why you're feeling a little bit lost or broken, welcome to where shit gets real. And if no one told you this before: This. Is. Normal.

How you handle this identity crisis, how you choose to move through it and rebuild who you are, that is where you start putting yourself together again. No, you'll never quite be the same. But you might be better for it.

This is your last chance to take part in our survey before I sit down with Gabriela Encina to unpack the expat identity and belonging journey. Your answers are kept confidential, and will guide our discussion.

On the menu today:

Let’s dive in, shall we?

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Cross-border taxes can feel confusing, even overwhelming, especially when two countries have very different systems and timelines. The good news is that with the right information, it’s entirely manageable. That’s why we’re so lucky to have our friends at Fresh Portugal answer our top tax questions in this guide today. Let’s hand things over to the experts, shall we?

🧮

If you are an American who has moved to Portugal, whether for Lisbon’s sunshine, Porto’s riverside charm, or the Algarve’s beaches, it is easy to assume that US taxes are now a thing of the past. Unfortunately, the IRS does not quite see it that way.

The United States is one of the few countries that taxes based on citizenship rather than residence. This means that even if your home, job, and daily life are now in Portugal, you are still required to file a US tax return every year. The good news is that with the right approach, you can stay compliant and avoid being taxed twice.

Do Americans living in Portugal still need to file US taxes?

Yes. All US citizens and green card holders must file a federal tax return each year, regardless of where they live or where their income is earned. Even if all your income is taxed in Portugal or you ultimately owe nothing to the IRS, filing is still mandatory if your worldwide income exceeds the standard deduction.

Do expats get extra time to file?

Yes. Americans living abroad receive an automatic two month extension, moving the filing deadline to June 15. You can also request an additional extension until October 15. Keep in mind, however, that any tax due is still payable by April 15, and interest starts accruing after that date.

Portugal’s tax calendar works differently. The Portuguese tax season runs from April 1 to June 30, and extensions are only granted in specific situations, typically when you are waiting for foreign tax documentation. Even when you file early in Portugal, the tax assessment is usually only issued in July and payable in August.

Because of these timing differences, the US October extension often becomes very useful, allowing proper coordination between both returns.

Portugal taxes residents on worldwide income, and so does the US. This is where planning becomes essential.

In most cases, avoiding double taxation involves a careful combination of the Foreign Earned Income Exclusion and the Foreign Tax Credit, always in line with the US Portugal tax treaty, which determines which country has primary taxing rights over each type of income.

Taxes paid in the US on US sourced income can generally be claimed in Portugal as a credit. However, if income is considered Portuguese sourced and US tax was paid first, Portugal will not allow that tax to be credited. This is particularly important for earned income, where determining the source is often less straightforward.

In many situations, it makes sense to file your Portuguese tax return first. Once the Portuguese tax liability is known, the Foreign Tax Credit can be accurately applied on the US return.

This coordination is especially important if you own property, investments, or a business. There is no one size fits all approach here. A proper filing strategy should always be assessed on a case by case basis by professionals familiar with both systems.

Even if you owe no US tax, additional reporting obligations may still apply.

You must file an FBAR if the total value of your non US financial accounts exceeds $10,000 at any point during the year. FATCA reporting, through Form 8938, applies at higher thresholds, starting at $50,000, and covers a broader range of assets, including investment accounts, business interests, and certain insurance products.

Many Americans living in Lisbon, Porto, or the Algarve meet the requirements for both filings, and the two often overlap.

The US and Portugal have a Totalization Agreement designed to prevent double social security contributions and to coordinate future benefits.

This agreement determines which country you pay into and how your benefits are calculated. If you are working in Portugal, you can request a Certificate of Coverage to confirm which social security system applies to you.

Managing taxes across two countries can feel overwhelming at first. The US and Portugal have different definitions of income, different deadlines, and different reporting rules. The key is to stay organized, plan ahead, and understand how the two systems interact under the tax treaty.

With the right use of tools such as the Foreign Tax Credit, the Foreign Earned Income Exclusion, and the Totalization Agreement, it is entirely possible to live in Portugal without paying tax twice.

The goal is not just to avoid penalties, but to align both systems so your financial life runs smoothly, wherever in the world you choose to call home.

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With thanks to our collaborators at FRESH Portugal, for their valuable insights and contributions to this article.

_{The legal team at Fresh Portugal is composed of experienced professionals with expertise in tax, immigration, real estate, estate planning, and corporate law. They advise individuals and businesses on relocation, investment, compliance, and tax planning. With extensive experience working with international clients, the team delivers clear, practical, and forward-thinking solutions to help expats thrive in Portugal.}

Email: [email protected]

A quick check-in on real expat life. 👇

Living abroad changes many things, but tax confusion seems to follow everyone. This one-click poll helps us see what weighs most on our community.

Wondering whether to say Tu or Você in European Portuguese? In this video, I break down when and how to use each form in European Portuguese, and why using Você might sometimes sound awkward or slightly rude!

✅ Learn the real-life difference between tu and você

✅ Understand how natives actually speak

✅ Get tips on speaking more naturally and politely in Portugal

Whether you're just starting to learn Portuguese or want to sound more native, this video will help you avoid one of the most common mistakes learners make.

🗣 Want to learn more phrases like this? Check out Mia’s free Portuguese course “Kickstart Your Portuguese - The Basics”.

💡 Mia from Mia Esmeriz Academy is a Portuguese teacher from Porto with more than 15 years of experience teaching foreigners. She helps expats become fluent in Portuguese in a clear and practical way. Alongside her courses, she also shares free content on Instagram, Facebook, and TikTok.

Thanks for reading! 💌

Hustle on!

Angelique🧞‍♀️

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