Cross-Border Individuals
Do I Report My Foreign Income and Accounts to the IRS? A Guide for New US Residents
Once you become a US tax resident, you generally must report your worldwide income — including foreign salary, interest, dividends, and rental income — on your US return. You may also have to disclose foreign accounts on an FBAR and foreign assets on Form 8938. Foreign tax credits generally prevent the same income from being taxed twice.
For new residents from countries that only tax local income, worldwide reporting is a genuine shock. This page lays out what you must report and what protects you from double taxation.
Worldwide income reporting
A US tax resident is taxed on income from all sources, foreign and domestic. That includes a salary earned abroad, interest and dividends from foreign banks and brokerages, rental income from property in your home country, and gains on foreign investments. It does not matter that the money never entered the US or was already taxed at home — it still goes on the US return.
The information filings
| Filing | Broadly applies when |
|---|---|
| FBAR (FinCEN 114) | Foreign financial accounts together exceed $10,000 at any point in the year |
| Form 8938 (FATCA) | Foreign financial assets exceed higher thresholds that vary by filing status and residence |
| Other forms | Owning foreign corporations, partnerships, trusts, or receiving large foreign gifts can trigger additional forms |
Avoiding double taxation
Reporting worldwide income does not necessarily mean paying tax twice. The foreign tax credit generally lets you offset US tax with income tax you already paid to another country, and some taxpayers can exclude certain foreign earned income. The mechanics depend on your situation, but the principle is that the US system is built to relieve, not duplicate, foreign tax already paid.
Why this matters in year one
The disclosures carry their own penalties separate from income tax, and they begin the year you become a resident. Understanding them early — ideally before your first filing — avoids both surprise tax and surprise information-return penalties.
Frequently asked questions
Do I have to report income I earned abroad?
If you are a US tax resident, generally yes. Residents report worldwide income, including foreign salary, interest, dividends, and rental income, even if it never entered the US.
Will I be taxed twice on the same income?
Usually not. The foreign tax credit generally offsets US tax with income tax you already paid abroad, and some foreign earned income may be excluded. The system is designed to relieve double taxation.
What foreign-account forms might I owe?
Commonly the FBAR when foreign accounts together exceed $10,000, and Form 8938 when foreign financial assets exceed higher FATCA thresholds. Other holdings can trigger additional forms.
Have a question about your own situation?
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Request a free consultationThis page is general educational information, not legal or tax advice for your specific situation, and does not create a client relationship. Tax rules, amounts, forms, and procedures change — verify against current IRS guidance or consult a qualified tax professional before acting.