You still file Form 1040 annually, reporting worldwide income, for as long as you hold US citizenship. Only renouncing citizenship ends this.

Foreign Earned Income Exclusion (Form 2555): excludes up to $132,900 (2026) of earned income per person. Doesn't cover pensions, dividends, or rental income — the income types D7 is built around. Requires passing the Physical Presence Test (330 days outside the US) or Bona Fide Residence Test.

Foreign Tax Credit (Form 1116): usually more relevant for D7 holders, since their income is passive. Credits US tax by foreign tax already paid, no physical presence test required. Which combination of FEIE/FTC applies depends on your income mix — get professional advice.

FBAR (FinCEN Form 114): required if foreign accounts exceeded $10,000 combined at any point in the year. Filed with FinCEN, not the IRS. Due April 15, auto-extended to October 15. Penalties for missing it are severe.

FATCA (Form 8938): separate threshold, filed with your return — generally $200,000 (single) / $400,000 (married filing jointly) in foreign assets for those living abroad. You may owe FBAR, FATCA, both, or neither.

State taxes: FEIE/FTC only affect federal tax. If still domiciled in a high-tax state (California, New York, New Jersey), that state can keep taxing your worldwide income. Many movers establish domicile in a no-income-tax state like Florida before relocating internationally.

NHR is gone: Portugal's old tax-break scheme for new residents closed to new applicants at the end of 2023. Its narrow replacement doesn't apply to most D7 holders. Ignore outdated content still referencing NHR benefits.

The sequence

1. Start the FBI background check immediately — longest lead time, most commonly mismanaged
2. Confirm income/savings meet 2026 thresholds, with documents translated and ready
3. Get a Portugal NIF and bank account
4. Talk to a cross-border tax professional before you move — domicile and credit decisions are easier to get right in advance
5. Budget for US tax filing as a permanent annual cost, not a one-time hurdle

This article is general information, not tax or immigration advice. US expat taxation (FEIE, FTC, FBAR, FATCA, state domicile) depends heavily on your specific situation — a session with a cross-border accountant is likely the highest-value money you'll spend in the whole move.

The Relocation Roadmap sequences visas, tax registration, banking, housing, and your first 90 days into one timeline — built for movers from the UK and the United States.