With new tax rules under OBBBA and rising IRS enforcement, expats are advised to verify account balances, review foreign investments, and organize documents before December ends.
New York, United States, 9 December 2025 – As U.S. citizens living abroad prepare for the 2026 tax filing season, NSKT Global has issued an important year-end compliance advisory to help expats avoid costly mistakes under the newly implemented One Big Beautiful Bill (OBBBA), signed into law on July 4, 2025.
The legislation introduces several updates affecting Americans overseas, including an increase in the Foreign Earned Income Exclusion (FEIE) to $130,000 per qualifying individual, higher standard deductions, and tougher penalties for global tax non-compliance. The IRS has also been instructed to accelerate enforcement programs, making proper preparation more critical than ever.
Nikhil Mahajan, Founder and CEO of NSKT Global, emphasized that most expat tax errors come from misunderstanding rules, not from intentional non-compliance. He warned that waiting until tax season could lead to expensive oversights.
Mahajan explained, “The increased enforcement makes year-end planning essential now. Expats who wait until tax season are finding out they missed something that costs them thousands. The FEIE alone is worth $130,000 in excluded income. Losing that benefit because you didn’t track travel days properly is an expensive mistake that’s completely preventable.”
NSKT Global’s Five-Point Year-End Checklist for Expats
- Verify FBAR Thresholds
Expat taxpayers must check whether their combined foreign bank balances exceeded $10,000 at any point in 2025. Even a temporary increase—such as a property sale deposit or inheritance can trigger filing requirements.
The IRS receives data from foreign banks under FATCA, so overlooked accounts can lead to penalties.
- Review PFIC Exposure
Foreign mutual funds, ETFs, and investment trusts may qualify as Passive Foreign Investment Companies (PFICs). PFIC earnings face steep taxes and interest charges, making documentation essential.
NSKT Global advises pulling all brokerage statements now and confirming purchase dates, distributions, and year-end values.
- Collect Foreign Tax Receipts Early
To claim the Foreign Tax Credit, expats need proof of taxes paid abroad. With many foreign employers shutting down for long holiday periods, waiting until January can cause delays.
Accurate receipts ensure expats receive full credit for overseas tax payments.
- Review All Foreign Assets for Form 8938
While FBAR reporting focuses on accounts exceeding $10,000, Form 8938 has higher thresholds $200,000 for single filers abroad, but includes more asset types, such as pensions and investment portfolios.
NSKT Global recommends gathering December statements from every foreign institution to ensure complete reporting.
- Set Up Better Record-Keeping for 2026
The firm encourages expats to create systems now, including:
- A folder for monthly foreign financial statements
- A travel-day tracking spreadsheet
- A digital system for saving tax-related receipts
Good organization helps prevent errors and reduces stress during tax season.
Stronger Enforcement, But Help Is Available
For individuals who missed past deadlines, the IRS still offers streamlined filing procedures to help taxpayers become compliant. However, penalties and interest can accumulate quickly.
With enforcement increasing under OBBBA, NSKT Global urges expats to address compliance gaps as soon as possible.
About NSKT Global
NSKT Global provides comprehensive tax preparation and advisory services for U.S. citizens and green card holders living abroad. The firm specializes in expat tax filing, FBAR and FATCA reporting, foreign tax credit optimization, streamlined compliance, and year-round planning.
