Expiration of 2017 Tax Cuts (TCJA) and the OBBBA: US Expat Tax Guide

Introduction

For US citizens living abroad, the expiration of the 2017 Tax Cuts and Jobs Act (TCJA) combined with the Overseas Business Bonus Benefits Act (OBBBA) creates new tax challenges—and opportunities. Staying informed now can save you money and prevent compliance issues later.

What Expiration of TCJA Means for Expats

• Key TCJA changes (2017): lower income tax rates, higher standard deductions, capped itemized deductions, changes to foreign-earned income reporting.
• Impact of expiration: potential higher taxes, reduced exemptions, and more complex filing for expats.
• Action tip: Review your prior deductions and plan for potential increases.

Understanding the OBBBA

• Definition: Legislation offering new overseas business deductions.
• Why it matters: Allows expats with foreign businesses to reduce taxable income, but requires proper documentation.
• Example: A US citizen running a consulting business abroad may now qualify for previously unavailable deductions.

Practical Tax Tips for US Expats

1. Audit income and deductions against pre-TCJA rules.
2. Track foreign business activities for OBBBA compliance.
3. Consider timing income and expenses for tax efficiency.
4. Partner with a professional expat tax advisor.

Common Mistakes to Avoid

• Ignoring TCJA expiration effects
• Misapplying OBBBA deductions
• Overlooking foreign tax credits
• Poor record-keeping of overseas business expenses

Expat Tax Resources

FAQs

Q1: How does the TCJA expiration affect US expats?
 A: Certain tax cuts and deductions may no longer apply, potentially increasing taxable income.

Q2: Who qualifies for OBBBA deductions?
 A: US expats with eligible foreign business activities can claim new deductions if properly documented.

Q3: Can I still claim the foreign-earned income exclusion?
 A: Yes, but it must be calculated alongside TCJA and OBBBA rules for accurate compliance.

Q4: Do I need a tax professional to navigate these changes?
 A: While not mandatory, working with an expat tax expert ensures you maximize benefits and remain compliant.

Conclusion

The expiration of TCJA and the OBBBA introduces important changes for US expats worldwide. By planning ahead, tracking business activities, and consulting with experts, you can reduce tax liability and stay fully compliant.

Download Expat Tax Online free US-UK Expat Tax Guide 2026 or schedule a consultation with our tax specialists to ensure you’re prepared for the latest expat tax changes.