On May 22, 2025, the U.S. House of Representatives passed the One Big Beautiful Bill Act (OBBBA) by a narrow margin. The bill now moves to the Senate, where revisions are expected. While the legislation includes sweeping tax and economic reforms, it offers no relief for Americans living overseas.
What’s in the One Big Beautiful Bill?
The OBBBA is a broad legislative package designed to make the tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) permanent. It also aims to reduce regulations and roll back provisions from previous Democratic tax policies. However, for U.S. citizens abroad, the bill does not address longstanding concerns.
Specifically, the bill:
Confirms citizenship-based taxation: U.S. citizens are still required to file annual tax returns with the IRS, regardless of where they live.
Leaves FATCA and FBAR rules unchanged: Reporting requirements for foreign bank accounts remain in full effect, with steep penalties for non-compliance.
In short: the current tax framework remains untouched—meaning American expats continue to face complex and often burdensome tax obligations simply due to their citizenship.
What About Residence-Based Taxation?
In late 2024, Representative Darin LaHood introduced the Residence-Based Taxation for Americans Abroad Act (H.R. 10468). This bill proposed a fundamental shift: taxing Americans based on residency rather than citizenship. For many expats, it was seen as a long-overdue solution.
However, the bill failed to pass before the close of the 118th Congress and officially expired on January 3, 2025. That said, there are indications the bill may be reintroduced this year with revisions to address cost and enforcement concerns.
Why It Matters
If you are a U.S. citizen living abroad, the passage of the OBBBA signals that the existing tax system isn’t changing anytime soon. You remain subject to U.S. tax reporting requirements—including FATCA, FBAR, and worldwide income filing—even if you haven’t lived in the United States for decades.
At Expats Overseas, we specialize in helping Americans navigate these challenges. If you’re unsure about your tax obligations or need help catching up, our team is here to guide you every step of the way—confidentially, affordably, and stress-free.
Need help? Contact us for expert support in getting compliant and staying compliant with U.S. tax law.
Expats Overseas
Navigating US expat tax obligations can be complex, but you don’t have to face them alone. Expats Overseas is your comprehensive solution for US expat tax filing, ensuring compliance with both US and local tax laws while helping you avoid double taxation.
Remember, the final FBAR deadline is a critical date on your expat calendar, and the penalties for missing it can be severe. By staying informed and timely filing your FBAR through our expert guidance, you can enjoy the expat life with peace of mind, knowing that your US tax obligations are in good hands. Contact Expats Overseas today to secure your financial future.
