Your first year abroad can put a bank account, a company and a different work arrangement onto the same US tax return. Your worldwide income generally remains subject to US income tax as a citizen, so check what the move adds before assuming it removes anything. 1

This is general information. Your CPA and counsel confirm the details for your case.

Use these ten risks as a priority checklist. Their order doesn't rank your potential losses. Identify which apply to your first year, attach the relevant records and put the unresolved items in front of the person preparing your returns. A missing form deserves attention before it becomes an urgent correction.

1. Treating June 15 as an interest-free payment extension

The IRS says interest on unpaid tax continues from April 15 even when you qualify for the automatic overseas filing extension to June 15. Separate the filing deadline from payment planning. Put both actions on your calendar rather than recording only the later date. 1

2. Assuming the FEIE removes self-employment tax

The foreign earned income exclusion reduces income tax, not self-employment tax. The IRS generally requires the latter when net self-employment earnings reach $400. Request a separate calculation if you work for yourself, even if an exclusion substantially changes your income-tax result. 2

3. Estimating your physical-presence days

The IRS requires 330 full qualifying days for the physical presence test. Illness, holidays or employer instructions don't ordinarily excuse a shortfall, and days over international waters don't count. Published adverse-conditions waivers are a separate question. Use actual travel records to establish the qualifying period. 3

4. Overlooking the FBAR on ordinary local accounts

An aggregate foreign-account value exceeding $10,000 at any time can trigger the FBAR requirement. FinCEN's published non-willful maximum is $16,536 at the 2025 level carried into 2026. In the 2023 Bittner decision, the Supreme Court held that the non-willful penalty accrues per report rather than per account. Review the whole account list; don't interpret that decision as permission to omit accounts. 4, 5

5. Assuming the FBAR also takes care of Form 8938

The IRS comparison gives abroad thresholds starting above $200,000 at year-end for single filers, with other thresholds depending on status and timing. It lists penalties of up to $10,000 initially and continued non-filing penalties after notice, for a potential maximum of $60,000. Check both forms separately. 6, 6

6. Leaving foreign family gifts out of the discussion

The IRS requires Form 3520 for more than $100,000 in gifts or bequests from a nonresident alien individual or foreign estate. The late-reporting penalty for this gift reporting is 5% per month, up to 25%. Record the receipt and its source, then establish the applicable reporting deadline. 7, 8

7. Buying foreign funds without a US reporting review

The IRS says a US shareholder of a passive foreign investment company files Form 8621 for specified distributions, dispositions and elections, or as an annual report under section 1298(f). Have the fund's US classification and tax treatment established before committing money; a product's local description doesn't complete that review. 9

8. Forming a company without assigning Form 5471 work

The December 2025 Form 5471 instructions describe a $10,000 penalty per foreign corporation and annual accounting period for failure to provide required information, with continuation penalties up to an additional $50,000. Before incorporation, identify the applicable filing categories and the person supplying the records. Don't leave the question between the formation provider and the return preparer. 10

9. Changing your FEIE election without looking ahead

Publication 54 explains that, after revoking an FEIE election, re-electing within five years requires an IRS ruling. If you're considering a different treatment, include the election consequences in the current-year comparison. A decision that looks attractive on one return deserves review against your existing election history. 1

10. Assuming departure settles state residency

California's 2025 rules include a residency presumption after more than nine months in the state and an employment-contract safe harbor involving 546 consecutive days abroad, subject to conditions. New York's 2025 instructions describe separate domicile exceptions, including a 548-day rule with detailed family and day limits. Ask a state-qualified CPA to assess the whole rule rather than treating one day count as a universal exit test. 11, 11, 12

What this means for you

Your first year abroad is the time to connect records that otherwise sit in separate folders. Put travel, foreign accounts, ownership, income and state ties on one checklist. That makes the next banking or structuring decision part of a documented plan rather than another reporting surprise.

What to do this month

  • Create a first-year change log covering your work, travel, accounts, investments, company ownership and family gifts. Put dates beside each change.
  • Match each change to a reporting question and a named person responsible for answering it. Put unanswered questions at the top of the return-preparation brief.
  • Gather supporting documents before the filing deadline approaches. Keep previous elections and state departure records with the current-year financial statements.
  • Review the next planned account, investment or entity against that same checklist. Resolve its reporting treatment before repeating an omission in a second year.

The FNC angle

Take that review sheet into any conversation about new banking, residency or company arrangements. FNC's structuring discussion should start with the practical problem you're trying to solve and the compliance questions your CPA has identified. Resolve what you can before adding another account or entity. The useful first-year outcome is an informed plan with clear responsibilities, not an assumption that moving abroad has made the reporting work disappear.