Family financial planning for American expats is critical when planning a move abroad with dependents in tow.
Moving your family abroad is exciting, but for high earners, careful planning is essential. Because the U.S. uses citizenship-based taxation, Americans must continue filing U.S. tax returns even after relocating, with few exceptions.
Your financial strategy, including how you file your expat taxes and plan for the future, will vary based on your new country of residence.
The following article outlines three key financial planning steps to help American expat families prepare for a smooth and compliant relocation.
Financial Planning for Moving Abroad

As we mentioned, one of the most surprising things people learn when they leave the U.S. is that they may have to continue filing a U.S. tax return.
1. Tax Obligations
Although commonly summarized as “citizenship-based taxation,” the filing requirement can impact non-U.S. citizens, too.
If you are moving abroad from the U.S., you will likely be liable for filing annual tax returns with the IRS if you are a:
- U.S. citizen
- Green card holder
- Non-U.S. business owner with U.S. dealings
- Owner or beneficiary of a U.S. trust
- Other U.S.-connected person
Take care not to conflate the tax filing requirement with paying tax; in most cases, expat tax credits and exclusions are available to reduce or fully eliminate your U.S. tax burden. (More on these below.)
Tip: Check if your target country has a Double Taxation Agreement with the U.S. and/or a Social Security Totalization Agreement.
As a result of the U.S. tax filing requirement, the government has negotiated dozens of intergovernmental agreements with individual countries that govern and guide expats and their CPAs on to which country tax is owed.
These agreements are formally known as Double Taxation Agreements (DTAs).
DTAs can be challenging to navigate because the tax rules vary from country to country.
For example
Say there were two identical U.S. families, and one was based in Germany and the other in Switzerland. The tax and financial planning approach would not be the same, even if their financial profiles were identical.
Parsing the nuances of individual double taxation agreements is why the Connected Financial Planning team specializes in planning for Americans in Germany and Switzerland.
Defining a financial plan for an expat family requires a baseline level of customization that exceeds standard planning needs, and focusing closely on two countries allows us to offer the highest level of service to our clients.
Foreign Tax Credit (FTC)
This credit is typically applied when a U.S. expat resides in a foreign country with tax rates higher than those in the U.S. The FTC provides a dollar-for-dollar reduction based on taxes paid to the foreign government, lowering your U.S. tax burden. This credit is non-refundable and claimed via IRS Form 1116.
Foreign Earned Income Exclusion (FEIE)
Allows for the exclusion of a portion of your foreign-earned income from taxation ($126,500 for 2024 and $130,000 for 2025).
Note that in this case, “foreign earned” income is that which is made while you are a legal tax resident of another country. So, even if you’re self-employed with U.S. clients, you can claim this exclusion if you are paying taxes in a foreign country. This exclusion is claimed via IRS Form 2555.
2. Consolidate Financial Accounts

Before moving, you’ll want to take stock of your financial accounts. This process will likely include consolidating retirement accounts, brokerage accounts, and banking relationships for streamlined management from abroad.
Tip: Don’t Forget About U.S. Subscriptions
Review your credit card statements for recurring charges associated with subscriptions or memberships and make a note to cancel them before moving abroad.
Thanks to a new rule enacted by the Federal Trade Commission called the “Click to Cancel” rule, from April 2024, it should be much easier to end recurring payments for subscriptions you no longer want or need. (1)
Prior to Moving, Select a U.S. Expat Tax Specialist to Work With
CPAs based in the U.S. with few to no expat clients are likely not equipped to navigate the complexities you will encounter as a U.S. expat abroad.
By selecting a U.S. expat tax specialist with clients living in your target country, they can make educated recommendations about how to organize your financial accounts to minimize your overall tax liability. A good litmus test is to ask a potential expat CPA whether they have any local accountant recommendations (e.g., a German accountant if you're moving to Germany), as this will indicate how familiar they are with the cross-border landscape in your target jurisdiction.
The recommendations your expat CPA makes will be rooted in the details of the DTA that governs taxation between the U.S. and your target country. They are especially important concerning expat retirement, navigating the net investment income tax, investments in general, and tax-advantaged accounts.
Consider Working with a Cross-border Financial Planner
Like your expat CPA, the planner you work with should have a client roster that reflects expertise in your target country.
They will also be able to advise on the best brokerage account for managing investments from abroad; due to legislation in effect since 2010, some U.S. brokerage accounts will refuse to continue serving Americans who move abroad. (2)
This same legislation can also result in a more time-consuming process when opening a foreign bank account.
Tip: Make a Plan to Maintain Your Credit Score Even While You’re Abroad
The U.S. places a unique emphasis on credit scores, which are critical for securing loans, mortgages, and favorable interest rates. While in Europe, eligibility for loans often depends on your work contract, income, and savings, your U.S. credit score remains essential if you plan to return stateside or maintain financial ties to the U.S.
To preserve your credit score, keep U.S. credit cards open and pay them off in full each month. Consider prioritizing travel-friendly cards that offer rewards and perks for globally mobile lifestyles! (3)
3. Cost of Living and Budgeting
Researching the cost of living in your destination country before moving is important for setting realistic expectations and planning your family budget. With respect to budgeting for a certain city or comparing cities, an online tool such as Numbeo can be incredibly helpful. (4)
Don’t Forget to Factor in the Up-Front Costs Associated with Moving

Some of these costs to consider may include:
- Hiring an immigration attorney streamlines your visa process, reviews your work contract, and provides other legal administrative support.
- Connecting with an international education consultant helps you understand the differences in schooling systems between the U.S. and your target country and determine the best fit for your children.
- Working with a local realtor to find your future home abroad.
- Investing in a language tutor for yourself and your children ensures you move abroad feeling confident in your ability to integrate
- Preparing your pets for the move, both administratively and logistically (5)
- Connecting with a currency specialist to minimize currency risk and support with high-dollar conversions from USD to your target currency, for example when wiring a large sum of money for a deposit on an apartment lease or a home purchase
- Working with professional movers allows you to send your household items to your new home abroad with peace of mind.
A note on currency conversions
While currency specialists are valuable partners when converting large sums of money, for smaller or everyday transactions, we recommend Wise (formerly Transferwise).
Wrapping Up
Moving abroad with family is an adventure that promises growth and enrichment, but the sheer volume of things to do can feel intimidating, particularly where reviewing and managing finances are involved.
To streamline your move and avoid financial pitfalls, consider consulting a cross-border financial planner who understands the complexities of expat life both professionally and personally.
With the right resources and support, you’ll be on your way to creating a fulfilling new life abroad for you and your family.
References
- Federal Trade Commission Announces Final “Click-to-Cancel” Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships | Federal Trade Commission
- Foreign Account Tax Compliance Act (FATCA) | Internal Revenue Service
- How Travel Credit Cards Work? - NerdWallet
- Cost of Living - Numbeo
- Relocating with pets 101 - Wise
Meet the Author
Arielle Tucker is a Certified Financial Planner™ and IRS Enrolled Agent with Connected Financial Planning. She's spent over a decade working with U.S. expats on U.S. tax and financial planning issues. She is passionate about working with U.S. expats and their families to help secure a financial future that is reflective of their core values. Arielle grew up in New York and has lived throughout the U.S., Germany, and Switzerland. Connected Financial Planning offers a complimentary introduction call for individuals and families seeking ongoing, comprehensive planning. You can schedule a call here.