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U.S. Persons with International Ties

Guides for U.S. citizens and residents with foreign accounts, companies, and income: Form 5471, PFICs and Form 8621, foreign gifts (Form 3520), tax treaties, and foreign tax credits.

Choose a topic from the list to see related guides.

Entity & Structure

Controlled Foreign Corporations (CFCs): How the U.S. Ownership Rules Work A foreign corporation becomes a CFC when U.S. shareholders own more than half of it, counting attribution from family and related entities. Here is how the ownership tests work, what CFC status triggers, and the planning options.

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Deductions & Credits

Form 1116 and the Foreign Tax Credit: How U.S. Taxpayers Offset Foreign Taxes Form 1116 claims the Foreign Tax Credit: a dollar-for-dollar credit for income taxes paid abroad. Here's which taxes qualify, how the limitation and income baskets work, and how the credit interacts with the FEIE.

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Form 2555 and the Foreign Earned Income Exclusion: Who Qualifies and How It Works The Foreign Earned Income Exclusion lets US expats exclude foreign wages from US tax. Here's who qualifies, the physical presence vs bona fide residence test, and when the Foreign Tax Credit is the better choice.

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FEIE vs. Foreign Tax Credit: Which Should U.S. Expats Take? The FEIE and Foreign Tax Credit both reduce your U.S. tax bill, but choosing the wrong one can cost you IRA eligibility, Social Security credits, and thousands in taxes.

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Compliance & Reporting

Form 1040-NR: The U.S. Tax Return for Nonresident Aliens Form 1040-NR is the U.S. income tax return for nonresident aliens with U.S. income: rental property, business profits, investments, or wages. Here's who must file, how the two tax regimes work, and the elections that matter.

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Form 5471 Categories of Filers: All Five Explained in Plain English Form 5471 has five filer categories, and which one you fall into determines the schedules you complete. Here is each category in plain English, with the ownership thresholds and attribution rules that decide it.

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Form 5471 Penalties: The $10,000 Problem and How to Fix It The Form 5471 penalty is $10,000 per form per year, can grow to $60,000 with continuation penalties, and keeps your entire return open to audit. Here is how the penalties work and every path back into compliance.

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Form 5471 Schedules Explained: What Each One Reports Form 5471 has more than a dozen schedules covering income statements, balance sheets, E&P, related-party transactions, and GILTI. Here is what each schedule reports, who completes it, and where the real preparation work hides.

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Form 8858: Foreign Disregarded Entities and Foreign Branches Form 8858 is required when a U.S. person owns a foreign disregarded entity or operates a foreign branch, including many self-employed expats. Here's who must file, what counts as a foreign branch, and the penalties.

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Form 8865: U.S. Persons with Foreign Partnerships Form 8865 is the reporting return for U.S. persons who control, own 10% of, or contribute property to a foreign partnership. Here's who falls into each filer category, what gets reported, and the penalties for missing it.

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W-8BEN and W-8BEN-E: What Foreign Individuals and Companies Are Certifying U.S. banks, brokers, and clients ask foreign payees for Form W-8BEN (individuals) or W-8BEN-E (entities) before paying them. Here's what the forms certify, how treaty rates are claimed, and the mistakes that trigger 30% withholding.

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Form 3520: Foreign Gifts, Inheritances, and Foreign Trust Reporting Form 3520 is required when US persons receive foreign gifts above the threshold, inherit from foreign persons, or have interests in foreign trusts. Here's who must file, the thresholds, and the penalties for missing it.

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Form 8938 and FATCA: Foreign Financial Asset Reporting for US Persons Form 8938 (FATCA) requires US persons with foreign financial assets above the threshold to report them annually. Here's how it differs from FBAR, the thresholds, and the penalties for missing it.

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Crypto Taxes: How the IRS Treats Bitcoin, Staking, NFTs, and DeFi The IRS treats crypto as property, so nearly every sale, swap, and purchase is a taxable event, and staking, mining, and airdrops are ordinary income. New broker reporting and per-wallet basis rules make 2025 the year sloppy records start to bite.

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FBAR (FinCEN Form 114): Who Must File and the Real Cost of Getting It Wrong If your foreign accounts together crossed $10,000 at any point in the year, you almost certainly have an FBAR to file. The penalties for ignoring it are far larger than most people expect, and missing prior years is usually fixable if you move first.

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Streamlined Filing Compliance Procedures: How to Catch Up on Late FBARs and Foreign Income If you missed foreign account reporting because you genuinely did not know the rules, the Streamlined Procedures let you catch up with limited or no penalty. The catch is that they require certifying non-willful conduct and only work before the IRS contacts you.

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Foreign Gifts and Inheritances: When Form 3520 Is Required U.S. persons who receive large foreign gifts or inheritances may need Form 3520 even when no tax is due. The key questions are who the donor really is, whether the transfer came from a trust, and how the amount should be documented.

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Form 8621: PFIC Rules for Foreign Mutual Funds and Non-U.S. Investments Foreign mutual funds, ETFs, and certain non-U.S. holding companies can trigger PFIC rules and Form 8621. The tax cost is often worse than investors expect, and the filing can follow you for years.

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Form 5471: U.S. Shareholders of Foreign Corporations Form 5471 is required when U.S. persons own or control a foreign corporation. Here are the five filer categories, the schedules, the GILTI connection, and the $10,000 penalty for missing it.

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International & Treaties

Form 8833: Treaty-Based Return Positions and When You Must Disclose Them Claiming a tax treaty benefit that overrides U.S. tax law often requires disclosure on Form 8833. Here's when the form is required, when it's waived, and why the treaty tie-breaker can be dangerous for green card holders.

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GILTI and Net CFC Tested Income: How the U.S. Taxes CFC Profits GILTI was renamed net CFC tested income for 2026, with a 40% deduction and a 90% foreign tax credit. Here is how the regime works for corporations and individuals, and how the Section 962 election and high-tax exclusion change the answer.

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PFIC Tax Rules: What U.S. Investors Need to Know About Foreign Funds U.S. persons who own shares in foreign mutual funds, ETFs, or pooled investment vehicles are likely holding a PFIC. The tax consequences are severe by default, but elections are available that can change the outcome significantly.

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U.S.-Mexico Tax Treaty: What It Covers and How It Applies The U.S.-Mexico tax treaty reduces double taxation on income earned across borders. This guide covers who it applies to, key provisions on dividends, interest, royalties, capital gains, and how it interacts with FBAR and FATCA.

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Residency & Status

Forms 8840 and 8843: How Snowbirds and Students Avoid U.S. Tax Residency The substantial presence test can make frequent visitors U.S. tax residents by day count alone. Form 8840 claims the closer connection exception and Form 8843 excludes days for students and others. Here's how both work.

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