Reference

Glossary

Plain-English definitions of the IRS forms, elections, and tax concepts US expats run into. Every entry links to deeper context and the related terms you usually encounter together.

• FBAR (FinCEN Form 114)

  An annual report of foreign financial accounts whose aggregate value exceeded $10,000 at any point during the year.

• FEIE (Foreign Earned Income Exclusion, Form 2555)

  Excludes up to a per-year cap of foreign-earned income (and a housing amount) from US federal tax — bona fide residence or physical presence required.

• Form 8621

  The IRS form filed annually for each PFIC a US person holds. One Form 8621 per fund per year.

• Form 8938 (FATCA)

  IRS report of specified foreign financial assets filed with your 1040 — threshold-driven, separate from FBAR.

• FTC (Foreign Tax Credit, Form 1116)

  Dollar-for-dollar credit (up to a per-category limit) for income tax paid to a foreign country.

• Income Tax Treaty

  Bilateral agreement between the US and another country that allocates taxing rights and provides relief from double taxation.

• Mark-to-Market (MtM) election under §1296

  A PFIC election available only for publicly-traded PFICs — taxes annual fair-value change as ordinary income.

• PFIC (Passive Foreign Investment Company)

  A non-US pooled investment vehicle (most foreign mutual funds and ETFs) the IRS treats with a punitive default tax regime under IRC §1291.

• QEF (Qualified Electing Fund) election

  A PFIC election that taxes you currently on your pro-rata share of the fund's earnings — avoiding the §1291 regime.

• Streamlined Foreign Offshore Procedure

  IRS procedure for non-wilful US persons abroad to come into compliance: three years of returns + six years of FBAR.

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