NSKT Global Issues Year-End Compliance Checklist for U.S. Expatriates Under 2025 Tax Law Changes

Firm advises expats to verify FBAR thresholds, review PFIC exposure, and gather foreign tax documents for smooth 2026 filing.

NY, NY, UNITED STATES, December 9, 2025 /EINPresswire.com/ -- NSKT Global, a tax advisory firm serving U.S. citizens living abroad, issued year-end compliance guidance for Americans abroad preparing to file 2025 tax returns under the ​One Big Beautiful Bill (OBBBA), signed July 4, 2025.

The legislation raises the Foreign Earned Income Exclusion to $130,000 per qualifying individual. The threshold rises from $126,500, while standard deductions climb to $15,000 (single) and $30,000 (married filing jointly). The law also increases penalties for international non-compliance and directs the IRS to strengthen enforcement programs.​

The firm recommends expats take specific actions before year-end to avoid common compliance pitfalls. Most errors come from incomplete records or not understanding how the rules work, not from people trying to dodge taxes.

"The increased enforcement makes year-end planning essential now. Expats who wait until tax season to think about compliance 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."
— Nikhil Mahajan, Founder and CEO of NSKT Global

The firm's year-end checklist focuses on five areas that trip people up. First, check total foreign account balances against the $10,000 FBAR threshold. Pull December statements from every foreign bank. Look for the highest combined balance at any point in 2025, even if it only lasted a few days.​
A home sale deposit or inheritance that briefly pushed balances over $10,000 triggers filing requirements. The IRS gets foreign account data through FATCA information-sharing agreements. They know what's out there.​

Second, review foreign investments for Passive Foreign Investment Company exposure. Foreign mutual funds, ETFs, and certain investment trusts held outside the U.S. often qualify as PFICs. The tax treatment is harsh. PFIC income gets taxed at the highest ordinary income rate, which can hit 37 percent, plus interest charges calculated back to when the investment was purchased.

Pull statements from every foreign brokerage, investment account, and managed fund now. Check if any holdings qualify as PFICs. If they do, gather purchase dates, distribution records, and year-end values. Understanding PFIC penalty avoidance strategies is critical, as this documentation takes time to compile and foreign institutions don't always provide it in the format the IRS wants.

Third, get foreign tax payment receipts from employers before they close for holidays. The Foreign Tax Credit offsets foreign taxes paid against U.S. taxes owed. The credit needs documentation showing exactly what was paid, when, and to which country. Foreign employers often close for weeks during holidays. Request documents now, not in January.​

The law kept the Foreign Tax Credit after removing Section 899. For people in high-tax countries, this credit is essential.​
Fourth, review all foreign financial assets for Form 8938. The threshold is $200,000 for single filers abroad. Foreign pensions count. Investment accounts count. Some trusts count. People miss this because they only add up bank accounts. Knowing the differences between FBAR and Form 8938 helps ensure complete compliance. Pull December statements from every foreign institution and add up total values.
Fifth, set up 2026 record-keeping now. Create a folder for foreign statements. Start a travel tracking spreadsheet. Save tax receipts as they come in. Good habits started in December prevent problems all year.

Streamlined filing procedures are available for individuals who missed prior years' deadlines. However, penalties and interest continue to accumulate. With enforcement ramping up, getting compliant remains essential.

About NSKT Global

NSKT Global provides comprehensive tax preparation, planning, and advisory services to U.S. citizens and green card holders living abroad. The firm handles expat taxes, including FBAR and FATCA reporting, foreign tax credits, streamlined filing procedures, and tax planning for Americans in countries worldwide.
For consultation or additional information about year-end compliance actions for 2025 tax returns, visit the details below.

Nikhil Mahajan
NSKT GLOBAL
+1 888-316-7116
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