US Taxes After Moving to Spain

Reviewed August 2026. Moving abroad does not by itself end U.S. filing obligations. Citizenship, not residence, is what triggers them, which is why an American in Madrid still files a federal return while a German in Madrid does not. The useful preparation is not guessing a future tax bill; it is making sure a qualified adviser can reconstruct the year without chasing documents across two countries.

Three separate filings that get confused for one

Most of the confusion in the first year abroad comes from treating these as one obligation. They have different thresholds, different recipients and, in one case, a different agency.

Filing	Form	Goes to	Triggered when
Federal income tax return	Form 1040	IRS	Worldwide income exceeds the ordinary filing threshold for your status
Foreign bank account report	FinCEN Form 114 (FBAR)	FinCEN, not the IRS	Your foreign accounts together top $10,000 at any moment in the year
Specified foreign financial assets	Form 8938	IRS, attached to the 1040	Higher thresholds, listed below

The FBAR is not a tax form and is not filed with your return. Missing it is the most common first-year error.

The $10,000 FBAR threshold is aggregate and it is a high-water mark, not a year-end balance. One transfer to cover a rental deposit and six months of rent in advance can cross it on a single afternoon and put you in scope for a year in which your accounts were otherwise nearly empty.

The Form 8938 thresholds, if you live abroad

These are the thresholds for taxpayers whose tax home is abroad. They are substantially higher than the ones that apply to Americans living in the United States, and the two are frequently quoted interchangeably online.

Filing status	On the last day of the year	At any time during the year
Not filing jointly	More than $200,000	More than $300,000
Married filing jointly	More than $400,000	More than $600,000

Either column can trigger the requirement on its own. Source: IRS, “Do I need to file Form 8938?”, consulted 7 August 2026.

“Living abroad” has a definition here rather than a plain meaning: your tax home is in a foreign country and you were present in a foreign country for at least 330 days in a consecutive twelve-month period. Someone who moves in September does not meet it for that first calendar year, which means the lower domestic thresholds apply to the year of the move. This catches people.

The 2026 figures that decide whether you owe anything

Filing and owing are different questions. Two mechanisms exist to stop the same income being taxed twice, and which one suits you is a genuine decision with consequences that persist for years.

Mechanism	Form	Tax year 2026 limit
Foreign earned income exclusion	Form 2555	$132,900 per qualifying person
Foreign housing exclusion or deduction	Form 2555	$39,870 base limitation, higher in some cities
Foreign tax credit	Form 1116	No cap; credit for Spanish tax actually paid
Treaty-based return position	Form 8833	Disclosure, not a number

Both exclusion figures are adjusted for inflation every year. Source: IRS, “Figuring the foreign earned income exclusion”, consulted 7 August 2026. Confirm the current year’s figure before you file.

The exclusion only covers earned income: salary, wages, professional fees. It does nothing for dividends, interest, capital gains, rental income or most pension distributions. A retiree living on investment income can be well under $132,900 and still owe U.S. tax, which is the opposite of what the headline number suggests.

Spanish income tax rates generally run above U.S. federal rates at comparable income levels, so the foreign tax credit often produces a better outcome than the exclusion for salaried employees. It also does not require you to give up the child tax credit, which claiming the exclusion can. This is exactly the sort of question to put to an adviser with your actual numbers rather than settle from an article.

Deadlines, and the two that are not 15 April

Date	What is due	Notes
15 April	Tax payment	Interest accrues from this date even when the filing deadline is later
15 June	Form 1040, if you live abroad	Automatic two-month extension; no form needed to claim it
15 October	Form 1040 with Form 4868	Must be requested
15 October	FinCEN Form 114	Due 15 April with an automatic extension; nothing to file to obtain it

The June extension moves the filing date, not the payment date. That distinction is where the interest charges come from.

The order that avoids paying for the same work twice

Each step below produces something the next one needs. Run them out of order and you will pay an adviser to reconstruct information you could have captured for free.

Before you give notice. Establish whether the state you are leaving applies continuing domicile rules. California, New York, Virginia and New Mexico are the ones usually named; the rule that binds you is your own state’s, and severing domicile is much easier before departure than after.
Before you open a Spanish account. Ask your U.S. brokerage in writing whether it will keep serving a customer resident in Spain. Several close or restrict accounts on a change of address, and finding out after the transfer is a bad sequence.
From day one abroad. Log every account: institution, address, account number, opening date, and the highest balance it reaches. Retrieving twelve months of maxima later is tedious and sometimes impossible.
Throughout the first year. Keep a travel calendar with dates in each country. The 330-day physical presence test is counted in full days and cannot be reconstructed from memory.
Before the first Spanish filing. Have the U.S. and Spanish positions coordinated by people who have seen each other’s work. Contradictory positions on the two returns is the expensive failure mode.

Create the handover pack before departure

Prior three years of federal and state returns.
Wage, self-employment, pension, investment and rental-income records.
Acquisition dates and cost basis for investments and property.
A list of every financial account and the highest balance during the year.
Foreign exchange method used to convert euro amounts to dollars.
Travel calendar showing days in each country.
Equity compensation, company ownership, trusts or foreign funds flagged separately.

Flag the last item properly. A Spanish investment fund is very often a passive foreign investment company for U.S. purposes, which brings Form 8621 and a punitive default tax calculation. Spanish banks sell these routinely to new residents who have no reason to suspect the consequence. Ask before you buy, not at filing time.

Run two independent reviews

Ask a U.S.-qualified international tax professional about continued federal, state and foreign-account reporting. Separately, ask a Spain-qualified adviser when Spanish tax residence and filing obligations may arise. Do not assume that a treaty means there is only one return or one deadline. The U.S.–Spain treaty allocates taxing rights; it does not excuse anyone from filing.

Foreign accounts are a tracking problem

The IRS and FinCEN rules depend on the aggregate value of foreign accounts at any time during the calendar year. Record account opening and closing dates, account numbers, institution addresses and maximum balances from the first day. Reconstructing maxima later is unnecessarily difficult, and the penalty regime for a missed FBAR is severe enough that guessing is not a sensible option.

Questions worth asking before changing an address

Will the brokerage continue serving a customer resident in Spain?
How will tax forms be delivered after the move?
Does the state you leave apply continuing domicile rules?
Could a Spanish investment product create complex U.S. reporting?
Who will coordinate positions taken on the U.S. and Spanish returns?
Is the foreign tax credit or the exclusion better for your income mix, and what does switching later cost?

Every figure on this page is dated and comes from the IRS pages listed below, which are the authority for U.S. obligations. Amounts change annually. This is an organisation framework, not tax advice, and not a substitute for advice based on your facts.

Sources for the figures on this page

Every amount and threshold above comes from one of these pages, consulted on 7 August 2026. All of them are indexed or revised annually, so check the live page before you file rather than trusting the number here.

Internal Revenue Service — Figuring the foreign earned income exclusion: the $132,900 exclusion and $39,870 housing limitation for tax year 2026.
Internal Revenue Service — Do I need to file Form 8938?: the $200,000 / $300,000 and $400,000 / $600,000 thresholds for taxpayers living abroad, and the 330-day definition of living abroad.
Financial Crimes Enforcement Network — Report Foreign Bank and Financial Accounts: the $10,000 aggregate FBAR threshold and FinCEN Form 114.