What's Happening?
The One Big Beautiful Bill Act, signed into law on July 4, 2025, introduces significant tax changes affecting U.S. expats. Key provisions include an increased Foreign Earned Income Exclusion limit, preservation of the Foreign Tax Credit, and a new 1% remittance tax on certain money transfers abroad. The Act also expands the Child Tax Credit and makes permanent the 2017 Tax Cuts and Jobs Act rates. Expats are advised to adjust their tax filing strategies to comply with the new regulations.
Why It's Important?
The tax changes under the One Big Beautiful Bill Act have substantial implications for U.S. expats, potentially reducing their tax liabilities and providing greater predictability in tax planning. The increased FEIE limit and preserved FTC offer relief from double taxation, while the remittance tax introduces new considerations for money transfers. Expats must navigate these changes carefully to optimize their tax positions and avoid compliance issues. The Act reflects broader efforts to reform the U.S. tax system and address fiscal challenges.
