Taxes and investing for Americans abroad
You are taxed by the U.S. wherever you live, and by France or the UK where you live. Xpat shows, income by income, who taxes what, how the treaty resolves it, which forms follow, and which investments avoid the traps.
Example: married couple in France, Missouri ties kept, renting out an apartment
- Residence
- France, 5 full year(s)
- U.S. filing status
- Married filing jointly
- Income (all sources)
- 102,300 EUR ≈ $118,668
- U.S. ordinary marginal rate
- 12%
- U.S. qualified rate
- 0%
- NIIT exposed
- no
- U.S. state
- Missouri (ties kept)
- French tax shares
- 2
- French marginal rate (TMI)
- 30%
| Income | Amount | U.S. | State | France | Who taxes | Combined |
|---|---|---|---|---|---|---|
| Salary | €90,000 | 12% | 4.7% | 30% | Residence first, U.S. credits | 34.7% |
| Bank interest (local) | €300 | 12% | 4.7% | 31.4% | Residence first, U.S. credits | 36.1% |
| Rent from property where you live | €12,000 | 12% | 4.7% | 33% | Residence first, U.S. credits | 37.7% |
Why each income is taxed this way
Salary · 34.7% · Taxed where you work; the U.S. credits that tax (FTC). The FEIE is the alternative.
- U.S.: Ordinary income, marginal 12%
- State: Missouri resident, up to 4.7%, no credit for foreign tax
- France: Income scale, marginal 30% (2 shares) · social contributions: ≈22% employee social contributions
- Missouri resident: state tax is added because states give no credit for foreign tax.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.ORDINARY.2026 · US.STACKING · STATE.RESIDENT · FR.RESIDENT · FR.BAREME.2026 · FR.SOCIAL.WAGES · US-FR.SAVING · US-FR.ART24.RESOURCE · US.FTC · US.FEIE.2026
Bank interest (local) · 36.1% · France taxes first; the U.S. credits French tax, CSG/CRDS included.
- U.S.: Ordinary income, marginal 12%
- State: Missouri resident, up to 4.7%, no credit for foreign tax
- France: Flat tax (PFU) 31.4% = 12.8% + 18.6% social charges
- Missouri resident: state tax is added because states give no credit for foreign tax.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.ORDINARY.2026 · STATE.RESIDENT · FR.RESIDENT · FR.PFU.2026 · US-FR.SAVING · US-FR.ART24.RESOURCE · US.FTC
Rent from property where you live · 37.7% · France taxes first; the U.S. credits French tax, CSG/CRDS included.
- U.S.: Net rent at 12% after 30-year depreciation
- State: Missouri resident, up to 4.7%, no credit for foreign tax
- France: 30% scale + 17.2% social charges, on 70% of rent (micro-foncier)
- Missouri resident: state tax is added because states give no credit for foreign tax.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.ORDINARY.2026 · US.SCHE.FOREIGN · STATE.RESIDENT · FR.RESIDENT · FR.BAREME.2026 · FR.RENTAL · US-FR.SAVING · US-FR.ART24.RESOURCE · US.FTC
Forms to file
| IRS | Form 1040 | Every year, wherever you live (June 15 for filers abroad). |
| IRS | Form 1116 | Credit for French/UK tax, by category (general, passive). |
| IRS | Schedule E (+ Form 4562) | Rental income and depreciation. |
| IRS | FinCEN 114 (FBAR) | Foreign accounts ≈ $23,200, above $10,000. |
| State | Missouri resident return | Ties kept: the state can still tax you as a resident. |
| French tax office | 2042 | Annual French return for worldwide income. |
| French tax office | 3916-bis × 1 | Accounts outside France: U.S. bank account. |
Watch out for
Missouri can still tax you
Keeping ties makes you a likely Missouri resident: up to 4.7% on top, with no credit for foreign tax. Since tax year 2025 Missouri subtracts 100% of capital gains reported on the federal return.
One social security system
Totalization agreements mean you pay social contributions where you work, not U.S. FICA or self-employment tax (keep a certificate of coverage if self-employed).
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