What Is An American Expat?

Written by
Amber Hobert
Published on
July 9, 2024
Table of Contents

If you're considering living abroad, you can either be an American expat, a resident alien or a migrant worker. Whichever country you decide to move to, you should be aware of its political and social climate.  It's also important to research the customs and traditions of your host country, so you can avoid any cultural missteps.

In this post, we’ll help you understand what an American expat is and also provide travel tips and a travel guide with the best countries for American expats. Let's get started.

Understanding What An American Expat Is

An expat or expatriate is someone living abroad in a temporary or permanent manner. This can either be for a couple of years or a lifetime. But who exactly is an American expat?

According to the U.S. taxes, an American expat is someone who has surrendered the benefits of their U.S. citizenship or green card. To become an American expat, there are specific steps you need to follow.

First, you'll need to fill out and submit form 8854. This proves that you've complied with your U.S. tax obligations from previous years. You can be considered an American expat if you meet certain thresholds in your income and wealth during the previous five years to when you decide to leave the country.

Travel Tips For American Expats

If you've decided to become an expat, there are certain things to know before moving abroad. To make it easier for U.S. citizens to live in a foreign country, here are some essential things you need to know before traveling.

American Expats Have to Pay Taxes and File Returns

The United States is the only country with a citizen-based taxation system. Therefore, it's a requirement for any citizen, including those living abroad, to pay and file taxes on their income. Failure to file taxes and other required forms may be considered a crime by the IRS.

Here is a list of those who should file returns:

  • American citizens and green card holders earning over $12,550 globally
  • Accidental Americans: All people with American passports, even if they've never lived in the United States.

If you've already moved abroad, you can easily find a U.S.-trained accountant with credentials and experience comparable to certified public accountants in the U.S. Knowing all the U.S. tax requirements, which includes reporting foreign bank accounts that have been recently opened, is essential. Failure to know which taxes to pay can be costly, and you may be charged double taxation on some money.

As an American expat living abroad, filing taxes is trickier than in the U.S. The main reason for this is that you must claim exemptions or credits to lower or completely get rid of your U.S. tax obligation. Here are some strategies for lowering your U.S. tax obligation:

Claim the Foreign Earned Income Exclusion

As of 2021, expats can claim the foreign earned income exclusion for the first $108,700. This applies whether you're paying taxes or not. Only earned income from salaries, self-employment, wages, or payment for services rendered is eligible for application. Rent, pensions, dividends, and other forms of passive income are not eligible for the Foreign Earned Income Exclusion.

To be eligible for the Foreign Earned Income Exclusion, you must pass the Bona Fide Residence Test and the Physical Presence Test.

You must demonstrate that you met the criteria for bona fide residence by showing that you lived there permanently during the tax year. You can demonstrate using your permanent residence visa or paying taxes locally.

On the other hand, to pass a Physical Presence Test, you must demonstrate that during a 365-day period that includes the tax year, you spent at least 330 days outside the U.S.

The Foreign tax credit and the Foreign Earned Income Exclusion cannot be used for the same income.

Make Use of the Foreign Tax Credit

As an American living abroad, you can claim tax credits in the U.S. up to the same amount as the foreign taxes you have previously paid in your country of residence.

However, overseas taxes paid on foreign sources of income are the only ones that qualify for the foreign tax credit. Tax credits cannot be claimed on income from pensions, rental income, or investments with an American base.

You can pay off your U.S. tax debts using the international tax credit. Any unused tax credits may be carried over and applied to subsequent tax years. It's crucial to keep in mind that even if you don't owe any U.S. taxes, you still need to file a tax return.

Claim Child Tax Credit if You Live with Your Children Abroad

You can apply for the child tax credit if you live abroad with your kids and are eligible for the foreign tax credit. Currently, it costs $3000 per dependent child.

You can claim a refundable $3000 tax credit per child in the form of a direct payment if you've already paid off your U.S. tax debt by claiming the foreign tax credit.

However, the dependent children must have U.S. social security numbers and be U.S. citizens.

As An American Expatriate, Healthcare Can Be Tricky

If you've already decided to temporarily move out of the country, you should be careful of your health and family. Also, as you move, you should know that there is no free healthcare for American expats living abroad.

US Medicare and Obamacare do not work for US citizens living outside the country. Also, few health insurance companies are willing to cover you when living abroad.

Several countries have excellent health systems. However, as an American expat, having access to national health programs can be tricky unless you are a permanent resident. The best option is having a long-term insurance option and includes medical evacuation.

Countries with many expatriates have two-tier health care systems—hospitals and clinics to cater for expats and residents. Therefore, healthcare geared toward expats can be more effective. However, it can be expensive.

It is essential to research all you can before choosing a hospital or clinic over the other. Expats with experience are a good source of information on this issue. Here are some tips to consider when choosing a plan from international health insurance companies.

  • Must Have Preventive Care: For your peace of mind, confirm that the health insurance you choose includes preventive and wellness treatment. Obtaining U.S. expat health insurance is essential for maintaining your health. The best way to ensure you keep leading a healthy expat life is to schedule these wellness appointments.
  • Avoid the Health Insurance Coverage Gap: Regarding the availability of health insurance for Americans traveling abroad, there are no certainties. Therefore, ensure your U.S. expat insurance is still active during your prolonged stay abroad. Avoid taking a chance with a coverage gap by assuming you won't need life insurance just because you haven't had any health issues in the past.

Culture Shock Can Last A While

Before leaving for a country, research the culture of your preferred country. This will give you a better understanding of the culture of the country in terms of norms, behaviours, and the past.

A great way to learn about a country's culture is by enrolling in universities that provide classes in a particular region. The lessons will provide a foundational understanding of the country's culture.

Another amazing way is to read newspapers from your preferred country. You can also chat with American expats on social media. However, be aware that different people have unique experiences.

On arrival, don’t expect to feel at ease right away. You may encounter problems at times. If you are determined to stay, try to immerse yourself in the local culture. Push yourself an extra bit each week, setting only one small aim at a time. For instance, you can start attending networking events.

One way of overcoming the cultural shock is to make friends. Some cultures make it easy for you to make new friends. If you can immerse yourself in the local culture and language, you can easily make friends.

Staying In Touch Can Be Tough

One of the major challenges of being away from your country is staying in touch with your friends and family. In most cases, you’ll need a tablet, phone, or computer with a stable internet connection. You can call home through Skype.

However, the availability of your friends and family will largely depend on the time zones. Be mindful when you call, as it might be midnight in your native country. You can also consider communicating through chat, email, and other platforms such as mail forwarding for expats.

Getting An Expat Job Is Interesting

In most countries, a tourist visa is enough to start a job search. However, you can’t get employed without a work permit. The process of obtaining a work permit can be hectic. You will require an offer of employment from a local company.

You must renew the permit periodically with proof of ongoing work. You can use the work permits to obtain permanent residency, though this isn’t mandatory.

Finding a job in other countries can be a bit different depending on the country you are in and the job. However, be prepared to face obstacles when you first receive an international job offer. In many countries, employers aren’t likely to hire foreign workers; in some cases, they have to show that no other skilled workers are available.

Factors For Expats To Consider When Moving

Some important aspects to consider when looking for a new home include work-life balance and how much it costs to live there.

Cost of Living

One of the significant factors, but not the only one, when considering the decision to move to another country is the cost of living. This broad term encompasses the cost of housing, taxes, health care, tax incentives, transportation, and prices for items like groceries, internet, eating out, shopping, and your regular cappuccino.

If you are concerned about budget, look beyond the largest city and capital of the nation you're interested in and think about more miniature cities and new tech hubs that are gaining popularity that offer lower prices and possibly more enjoyable life based on your preferences.

Work-life Balance

In this connected world, you may work longer hours to maintain contact with your colleagues and clients across diverse time zones. This could lead to loneliness and exhaustion. Therefore, selecting the country that provides a reasonable and healthy life balance is essential.

Consider co-working spaces, communities, community events, gyms, and clubs, and opportunities to engage in serotonin-producing activities like group running, cooking lessons and even language courses. These will help you maintain the balance and meet people from the local community and other expats.

Best Countries For Americans Expats

With hundreds of countries to choose from as your next place of residence, it isn't easy to find the right one for you. So, we’ve put together a list of the best countries for American expats considering safety, friendliness, living standards and access to outdoor and cultural activities.

Here are seven of the most desirable countries for expats that can help you begin your journey.


Canada is among the top choices for American expats. It's not only a great place to live, but also easy to travel to. Here are some reasons why Canada is an excellent place for expatriates.

  • Low-cost education
  • Diversity of culture and stability
  • Numerous opportunities to explore the wilderness.

Here are some of Canada's best places to live as American expats:

  • Toronto is an excellent place for people who love living in large cities. It provides thousands of job opportunities and has an elegant eating and shopping scene.
  • If you love to go on trips on the weekends, Vancouver will be ideal for you. It's surrounded by the sea and mountains, making it ideal for nature walks.
  • Calgary is another excellent place to live in. It's one of the cheapest cities to live in, in Canada.
  • Other significant areas to live in include Quebec City and Montreal.

South Korea

If you love being part of popular culture, South Korea is an excellent option. K-Pop, Kbarbeque and 24 hours of jimjilbangs originated from South Korea. Seoul, the third largest city in Asia, is filled with excellent dining joints, shop night markets, entertainment and a thriving high-tech culture.

As an expat, you can enjoy small-scale social groups that are a constant source of social events for those who want to socialize over soju cocktails. It's a great way of making new friends.

Another great city to live in is Busan. It's filled with fresh fish beaches. If you love film festivals, you can participate in the international film festival held yearly. Apart from taking a ferry to Japan, you'll also enjoy hiking in the mountainous region with thousands of small islands that offer outdoor activities.


As an American expat, Thailand offers the most comfortable tropical paradises to live in. In addition, This South-east Asia nation has a robust infrastructure that is affordable to live in. For instance, in Bangkok, with $600, you can enjoy a month's high-rise amenities such as saunas, pools and a gym.

Another great place to live is Chiang Mai. It boasts an established community of freelancers and self-employed individuals, if you can live without the extensive city amenities. In that case, you can find even more affordable options on bungalows on islands in gorgeous coastal towns, where you'll enjoy the freshest, most affordable and most often the spiciest seafood you've ever had.


If you're a budding entrepreneur, Portugal is among the best countries to move to. It has welcoming business incentives that will stretch your hard-earned money. Furthermore, its low living costs make it ideal for young American expatriates.

One of the best places to live is Porto, a city buzzing with creativity, energy, and a textile and manufacturing hub. It's a hilly town with cool cafes, century-old churches and port distilleries.

Other great places to live in Portugal include Braga, often referred to as the Rome of Portugal due to its baroque architecture. Braga also offers attractive green areas, international schools and high-tech companies looking for skilled individuals.

Costa Rica

There's a reason why Costa Rica has become one of the most preferred countries by American expats. Although the country is situated within the Pacific and Caribbean shores, this idyllic Latin American nation wins people with its stunning clouds, volcanoes, and animals, including capuchin monkeys, sloths, and toucans.

Costa Rica has a simple residence program with affordable healthcare and dental services, a stable, democratic government, and quick flights to the U.S. from two international airports.

The capital city of San Jose has a unique art and food scene; foreigners can travel to either coast to enjoy long stretches of beautiful beaches, seaside villages' surf and yoga classes, as well as neighbouring expat communities and business ventures that often are tied to eco-tourism.

So, if you want a relaxed, healthy lifestyle surrounded by natural beauty and a cool, evergreen vibe that is difficult to duplicate in any other place, this could be the perfect place for you.


In recent years, Ghana has seen an increase in diverse expat communities. This can be attributed to friendly locals and a relaxed lifestyle. In 2019, Ghana launched an ongoing program to receive American expats seeking lucrative economic opportunities, low crime rates, and a stable and democratic country.

The program provides a speedy route to citizenship program for African Americans planning to leave the U.S. and a program to encourage residents to stay within the nation for at least 10 years.

Accra is a vibrant capital city. Accra provides a high quality of life for skilled professionals looking for jobs, and those who prefer to meet new people will have the option of choosing from a variety of social support organizations, networking events, and associations that they can join. On weekends, you can choose between Ghana's stunning beaches, National parks, beaches, and waterfalls.


The highly liveable Central European country can have you walking through the Alps in the morning and watching a performance at the world-renowned opera house later in the evening.

Vienna, the capital of Austria, is known for its high living standards and low crime rate, along with a vibrant dining and wine scene based on local, organic ingredients. It's also a fantastic choice for those looking for excellent healthcare and international schools.

The south-facing side of the city is the thriving city of Graz and offers its take on Renaissance, Baroque architecture, a wealth of bars, and lively nightlife. This is in addition to all the other benefits of living in Austria and the opportunities for work in various high-end sectors.

If you’re considering retiring abroad, there are other countries around the world to consider. The United Arab Emirates, the United Kingdom and Hong Kong are some great destination countries.

What Is Your Preferred Destination?

An American expat is an American citizen who lives in a foreign country. Some American expats move abroad for work, others for retirement, and still others for adventure. If you are an American planning to move, it’s a good idea to decide on your preferred destination.

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