Best Tax Software for Expats and Nomads Compared

Navigating taxes as an expat or digital nomad can feel overwhelming, with rules about reporting worldwide income, foreign tax credits, and special forms like the FBAR and FATCA. Fortunately, tax software designed specifically for U.S. citizens living abroad makes it easier to file accurately and on time. 

Whether you’re a first-time filer abroad or a seasoned traveler with complex financial arrangements, choosing the right tax software is key to simplifying the process. In this article, we’ll explore the best tax software options for expats and digital nomads, highlighting features, pricing, and how they cater to international taxpayers.

How We Chose Them

We generated our shortlist of tax software by gathering intel on digital nomad, expat, and tax-related forums. The providers on this list were chosen based on positive recommendations and discussions from actual users. When comparing these five options, we focused on key factors such as price, ease of use, and features. Particular attention was given to expat-specific tax forms, including those required for overseas business owners, freelancers, and the self-employed. 

Note that Nomad Deals receives affiliate revenue from some (but not all) of these providers, which helps support the free content provided on this site. However, this arrangement does not influence our reviews, and we are careful to highlight both the pros and the cons of each service. 

Compare Popular Tax Filing Software

MyExpatTaxes

Expatfile

TurboTax

H&R Block Expat Tax

IRS Free File

Guided to Choosing Tax Filing Software for Expats and Nomads

The U.S. tax code is widely recognized as one of the most complicated in the world, with stiff penalties for payment oversights. Expats and digital nomads living overseas face even more tax complications than the average American, which underscores the need to choose tax software carefully. 

Common tax forms for expats and nomads

Before you purchase tax prep software, ensure that it supports the forms that you will need to file. Here is a list of common U.S. tax forms for filers living overseas: 

Form 114 (FBAR – Report of Foreign Bank and Financial Accounts)

• Purpose: To report foreign financial accounts that exceed $10,000 in aggregate value at any point during the calendar year. This includes bank accounts, brokerage accounts, mutual funds, or other financial accounts held overseas.
• Filing Deadline: April 15 (automatic extension to October 15).
• Who Must File: U.S. citizens, residents, and entities (such as corporations, partnerships, or trusts) with foreign accounts meeting the threshold.
• Filed With: The Financial Crimes Enforcement Network (FinCEN), not the IRS. Some (but not all) tax prep software programs include a built-in filing tool, otherwise you will need to do so separately. 

Form 8938 (Statement of Specified Foreign Financial Assets)

• Purpose: To disclose foreign financial assets, such as bank accounts, foreign stocks, or interests in foreign entities, when their value exceeds certain thresholds.
• Filing Thresholds: Vary depending on filing status (e.g., $50,000 for single filers, $100,000 for married filing jointly, and higher for those living abroad).
• Who Must File: U.S. taxpayers (individuals, partnerships, trusts) who meet the reporting thresholds.
• Filed With: Attached to the taxpayer’s annual Form 1040.

Form 2555 (Foreign Earned Income)

• Purpose: To exclude up to a specific amount of foreign earned income ($126,500 for tax year 2024) or claim a deduction for foreign housing expenses.
• Eligibility: Requires meeting the physical presence test (330 days in a foreign country out of any 12-month period) or bona fide residence test (living abroad for an entire tax year). 
• Who Must File: U.S. citizens or residents living and working abroad.

Form 1116 (Foreign Tax Credit)

• Purpose: To claim a credit or deduction for foreign taxes paid on income that is also subject to U.S. taxes. This helps avoid double taxation.
• Who Must File: U.S. taxpayers with foreign income, such as wages, interest, dividends, or rental income, who pay foreign taxes on that income.
• Notes: The form calculates the foreign tax credit limit based on the taxpayer’s U.S. tax liability.

Form 8833 (Treaty-Based Return Position Disclosure)

• Purpose: To disclose when a taxpayer claims treaty benefits (e.g., reduced tax rates or exemptions) under an international tax treaty that modifies U.S. tax rules.
• Who Must File: Nonresident aliens, dual-resident taxpayers, or U.S. citizens claiming treaty positions that reduce their U.S. tax liability.
• Penalty for Non-Filing: $1,000 per undisclosed treaty position.

Form 8621 (Passive Foreign Investment Companies – PFICs)

• Purpose: To report investments in Passive Foreign Investment Companies (PFICs), which are foreign corporations generating primarily passive income (e.g., dividends, interest).
• Who Must File: U.S. taxpayers holding shares in PFICs.
• Complexity: Tax rules for PFICs are highly complex, and failing to file can result in significant penalties.

Form 8858 (Foreign Disregarded Entities and Foreign Branches)

• Purpose: To report ownership of foreign disregarded entities (single-member LLC equivalents abroad) or foreign branches, along with their income and transactions.
• Who Must File: U.S. persons or entities owning foreign disregarded entities or operating foreign branches.
• Filed With: Attached to the taxpayer’s Form 1120, 1065, or 1040.

Form 5471 (Foreign Corporations)

• Purpose: To report U.S. ownership or control of a foreign corporation and disclose information about its income, assets, and transactions with U.S. persons.
• Who Must File: U.S. citizens, residents, or entities owning 10% or more of the voting stock of a foreign corporation.
• Complexity: The form has several categories, and penalties for non-filing are steep (up to $10,000 per failure).

Form 8865 (Foreign Partnerships)

• Purpose: To report interests in foreign partnerships, including income, deductions, and transactions between the partnership and U.S. persons.
• Who Must File: U.S. persons owning 10% or more of a foreign partnership or engaged in transactions with it.
• Penalties: Similar to Form 5471, with steep fines for failure to file.

Other key forms

Beyond the expat-specific forms, many overseas filers – especially business owners, freelancers, and the self-employed – will need to fill out additional paperwork. These forms include (but are not limited to) the following: 

Schedule C (Profit or Loss From Business)

• Purpose: To report business income or loss for sole proprietors or self-employed individuals.
• Included Information: Gross receipts, business expenses (e.g., advertising, supplies, home office), and net profit or loss.
• Filed With: Form 1040.
• Notes: Often accompanied by self-employment tax forms (Schedule SE).

Schedule K-1 (Partner’s/Shareholder’s Share of Income, Deductions, Credits, etc.)

• Purpose: To report each partner’s or shareholder’s share of income, deductions, and credits from partnerships, S corporations, estates, or trusts.
• Who Issues It: The partnership or S corporation issues this to each partner or shareholder.
• Filed With: The recipient includes the information on their individual tax return (Form 1040).

Schedule D (Capital Gains and Losses)

• Purpose: To report gains and losses from the sale or exchange of capital assets, such as stocks, bonds, or real estate.
• Filed With: Form 1040.
• Notes: Long-term gains (assets held for more than a year) are taxed at lower rates than short-term gains.

Form 1040NR (U.S. Nonresident Alien Income Tax Return)

• Purpose: Used by nonresident aliens to report U.S.-sourced income (e.g., wages, dividends, rental income) and calculate taxes owed.
• Who Must File: Nonresident aliens earning income from U.S. sources.
• Key Distinction: Unlike Form 1040 (for U.S. citizens/residents), this form applies only to income sourced in the U.S.

State taxes

Most U.S. states require residents and individuals with income earned in the state to file a state income tax return. These returns typically follow the same tax year as federal taxes (January 1 to December 31). Each state has its own rules for who must file based on income level, residency, and source of income.

Expats and nomads who live permanently overseas may still need to file state taxes, even if they no longer live there. Not all providers support state tax filing, so be sure to check if you are required to file. 

If your last residence was in one of the following nine states without state income tax, you generally don’t need to file state taxes as an expat:

• Alaska
• Florida
• Nevada
• New Hampshire (taxes only dividends and interest income)
• South Dakota
• Tennessee 
• Texas
• Washington
• Wyoming

Current year tax amendments

A tax amendment is a correction to a previously filed tax return when you discover errors or omissions, such as unreported income, missed deductions, or incorrect filing status. To amend a federal tax return, you must file Form 1040-X (Amended U.S. Individual Income Tax Return). This form allows you to report the changes and provide a clear explanation of why you’re amending your return.

Not all tax filing software supports current year tax amendments, so look for this feature if you anticipate filing an amended return in the future. 

Unfiled tax returns

Some tax software companies provide special packages for people filing late returns. Due to the specialized knowledge required for navigating these situations, software companies typically charge a hefty fee for professional guidance. 

Professional accounting help

Tax software is designed for filers that want to prepare their own taxes, but many software companies provide personalized guidance from a professional for an additional fee. This can range from review and signoff to full service tax preparation. 

Getting free tax software

Through the IRS Free File program, eligible U.S. taxpayers can obtain tax filing software at no cost. For 2024, the cutoff is set at adjusted gross income of $84,000 or less. Although 70% of U.S. taxpayers are eligible for the program, most aren’t aware of it and only a small fraction actually participate. You can obtain free software from Free File Alliance members directly. The following tax software providers participate in the Free File Alliance:

• 1040Now
• Drake (1040.com)
• ezTaxReturn.com
• FileYourTaxes.com
• On-Line Taxes
• TaxAct
• TaxHawk (FreeTaxUSA)
• TaxSlayer

Many digital nomads and expats face tax challenges that exceed the capabilities of these more generalized providers, so make sure that any free software offers the tax forms that you need. 

Alternatives to Tax Software

If buying and using tax software doesn’t sound like an appealing option, you have two other options for preparing your taxes – do-it-yourself or professional service. 

Do-it-yourself

A small percentage of U.S. taxpayers fill and file forms on their own.The IRS provides Free File Fillable Forms, which are electronic versions of IRS forms for taxpayers who are comfortable preparing their own taxes without software guidance. 

For taxpayers who prefer or need to file manually, the IRS accepts paper returns. Self-preparers can download and print tax forms and instructions from the IRS website (www.irs.gov) or request forms by mail. Once completed, paper forms must be signed and mailed to the appropriate IRS processing center, based on the taxpayer’s location and the type of form being filed. The mailing address can be found in the instructions for the specific form.

Professional tax preparation service

Digital nomads and expats with complex tax situations may find that software solutions are inadequate. Around a quarter of taxpayers hire tax professionals to prepare and file taxes on their behalf. Although this method comes at a much higher cost, often hundreds or even thousands of dollars, it ensures timely and accurate returns. Many professionals will also represent you in the event of an audit or inquiry from the IRS. 

Expat and digital nomad taxes remain a niche corner of the tax preparation industry, so ensure that your accountant or service provider is familiar with the space before you proceed. A few nationwide tax prep services specialize in expat taxes: 

• Greenback Expat Tax Services
• Taxes For Expats (TFX) 
• Expat Tax Professionals 
• 1040 Abroad

FAQs

Do digital nomads and expats need to file U.S. taxes?

Yes. The U.S. follows a citizenship-based taxation system, meaning citizens and residents must report their worldwide income to the IRS regardless of where they live. This applies even if they earn all their income abroad or pay taxes in a foreign country.

In addition to federal filing, most U.S. states also require that residents and domicile holders file taxes. Exceptions are U.S. states that do not levy a personal income tax. 

How long do expats have to file U.S. tax returns?

Expats are granted an automatic two-month filing extension beyond the regular tax deadline (April 15). For most expats, the tax filing deadline is June 15. However, taxes owed are still due by April 15 to avoid interest charges on late payments.

If expats need additional time, they can request an extension to October 15 by filing Form 4868. This extension applies to the filing of the return, not the payment of taxes owed.

What tax benefits are available to expats and digital nomads?

Expats and digital nomads can access several U.S. tax benefits to reduce or eliminate tax liabilities while living abroad:

1. Foreign Earned Income Exclusion (FEIE):
   • Excludes up to $120,000 (in 2025) of foreign-earned income if you meet the Physical Presence Test (330+ days abroad) or the Bona Fide Residence Test (full-year foreign residency).
2. Foreign Housing Exclusion/Deduction:
   • Allows for the exclusion or deduction of qualifying housing expenses above $19,200 (2025), with higher limits in high-cost locations.
3. Foreign Tax Credit (FTC):
   • Offers a dollar-for-dollar credit for income taxes paid to foreign governments, applicable to earned and unearned income.
4. Tax Treaties:
   • Prevents double taxation and provides benefits for specific types of income (e.g., pensions or business profits) under agreements between the U.S. and other countries.

Do digital nomads and expats pay foreign taxes?

Many countries tax individuals based on residency. If a digital nomad or expat spends enough time in a foreign country (typically more than 183 days in a tax year), they may become a tax resident and be subject to that country’s income taxes.

Whether digital nomads and expats pay foreign taxes depends on their country of residence and the tax laws of that country. In some cases, digital nomads and expats may be taxed only on income earned within the foreign country, such as income from a local job or business. Tax treaties between the U.S. and other countries may help reduce or eliminate double taxation by defining where taxes are owed.