Being a US citizen living in the UK has its advantages—afternoon tea, improved work-life balance, and potentially even access to the NHS. But when it comes to tax time, things quickly get complicated. Even though you live overseas, you’re still required to file a US tax return annually, and in 2025, that’s still true.
Regardless of whether you’re just starting out in expat life or have been abroad for years, this guide will take you through your 2025 filing choices as a US expat in the UK, what forms to anticipate, and how to make the process less agony.
The Problem: Paying Two Sets of Taxes
One of the worst irritations for US expats is dealing with two tax systems. You probably already pay tax in the UK, but the US taxes its citizens as a citizen, not as a resident. That entails even if you never visit the States, you still need to file a US tax return.
You may not owe US tax—thanks to exclusions and credits—but you are still required to file to substantiate that.
The Solution: Expat Tax Filing Alternatives for 2025
Option 1: File Form 1040 + Apply the Foreign Earned Income Exclusion (FEIE)
If you receive earnings from employment or self-employment, the Foreign Earned Income Exclusion (Form 2555) allows you to exclude up to $126,500 USD of income (2025 inflation-adjusted estimate).
In order to qualify, you must:
- Pass either the Physical Presence Test (330 days abroad in a 12-month period), or
- Be a bona fide resident of the UK (usually means you’ve settled and pay UK tax)
This is best for:
- Salaried employees
- Self-employed expats
- Freelancers or contractors
Pros:
- Shuts out a big portion of income from US taxation
- Works even if you don’t pay much UK tax
Cons:
- Doesn’t cover passive income (dividends, rental income, etc.)
Option 2: File Form 1040 + Take the Foreign Tax Credit (FTC)
If you contribute a respectable amount of UK tax, this is probably your best bet. With Form 1116, you can use the taxes you’ve already paid to HMRC against your US tax liability.
This is best for:
- High earners who pay UK income tax
- Expats earning investment or pension income
- Dual US/UK citizens who are not eligible for FEIE
Pros
- Great for offsetting US tax on income types that FEIE doesn’t cover
- Can be used alongside FEIE for different income types
Cons:
- More complex calculations
- IRS audits FTC claims more often
Option 3: Streamlined Filing Compliance for Late Filers
If you’ve been living in the UK for years and haven’t filed US taxes, the Streamlined Foreign Offshore Procedures offer a way to catch up without penalties.
You’ll need to:
- File 3 years of back tax returns
- File FBARs for 6 years
- Certify that your non-filing was non-willful (i.e., you didn’t realize you had to file)
Pros:
- No penalties
- Keeps you in good standing with the IRS
Cons:
- Only once—don’t wait
- Still requires full disclosure and accuracy
Option 4: Married Filing Jointly or Separately with a Non-US Spouse
If you’re married to a non-US citizen (as many US expats in the UK are), you can:
- Choose to treat your spouse as a US individual and file jointly (rare unless advantageous), or
- File Married Filing Separately—the standard path
Notice: choosing to treat your non-US spouse as a US taxpayer requires them to report worldwide income as well, so proceed with care.
Top 2025 Filing Dates for US Expats living in the UK
- April 15, 2025: Standard US deadline
- June 16, 2025: Automatic expat extension (2 months)
- October 15, 2025: Extended deadline (must file Form 4868)
People Also Ask (PAA)
1. Do I need to file US taxes if I am a UK resident?
Yes. US citizens and Green Card holders are required to file a US tax return every year, regardless of where you reside.
2. Can I complete US taxes from overseas online?
Yes. You can complete it with IRS-authorized software or use a tax professional who deals with expat returns.
3. Will I pay double tax?
Not likely. With the Foreign Tax Credit and/or Foreign Earned Income Exclusion, most expats don’t pay extra US tax—but you still must file.
Frequently Asked Questions
1. I just relocated to the UK. Do I file both US and UK taxes in 2025?
Yes. Even if you’re newly arrived, you’re already a US taxpayer. You’ll also become a UK tax resident if you pass their statutory residence test.
2. What are the penalties if I don’t file FBARs?
The IRS imposes hefty fines—beginning at $10,000 per unfiled year. Don’t neglect your FBAR filing if you have more than $10,000 in foreign accounts.
3. Can I use TurboTax or online software as an expat?
Most basic tax software doesn’t handle expat-specific forms like FEIE, FTC, or FBAR. You’ll either need a premium version or an expat tax professional.
Final Thoughts
If you’re a US citizen who resides in the UK, it’s not optional that you file your 2025 US tax return. But with the proper approach—claiming the Foreign Earned Income Exclusion, the Foreign Tax Credit, or utilizing the Streamlined Procedures—you can remain compliant without overpaying or double-paying taxes.
It’s not merely about avoiding penalties from the IRS. It’s about guarding your future: your investments, your pension, and even your passport.
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