What Trump’s Latest Tax Bill Means for Americans Living Abroad

Core Points - The One Big Beautiful Bill (OBBB) introduces several tax provisions that significantly affect Americans living abroad, particularly in terms of foreign income taxation and business operations [1][3]. Group 1: Tax Provisions Impacting Expats - The new law raises the risk of exposure for expats operating businesses abroad, leading to higher taxes and more reporting requirements [3]. - A flat 14% tax rate is set on certain income from foreign companies, eliminating previous exemptions that shielded earnings tied to physical assets [5]. - The foreign earned income exclusion (FEIE) and the foreign tax credit remain unchanged but do not provide new relief for expats [7]. Group 2: Recommendations for Expats - Expats are advised to reassess their business structures and confirm reporting accuracy to optimize income flows [4]. - It is recommended to work with a cross-border tax advisor to identify risks and suggest solutions [6]. - Expats must stay compliant with reporting requirements, including filing the Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA) forms annually [6].