The One Big Beautiful Bill (OBBBA): What changed—and what didn’t—for U.S. expats. Many hoped the One Big Beautiful Bill (OBBBA) would end citizenship-based taxation, it didn’t. Reporting requirements for Americans abroad remain firmly in place. Still, the bill includes provisions that matter to expats. We break down what changed, what stayed the same, and why the new Form 1099-DA deserves your attention.

Written for Expat Network by RoseMarie Guaglieri, H&R Block Expat Tax

When President Trump signed the Omnibus Tax Simplification and Fairness for Americans Abroad Act on July 4, 2025, it marked a major overhaul of U.S. federal tax policy. The legislation, commonly referred to as the One Big Beautiful Bill (OBBBA) introduced sweeping tax cuts, raised reporting thresholds, and reduced healthcare spending—changes with far-reaching implications.

While OBBBA focuses primarily on stimulating domestic economic activity, it also includes provisions that matter to Americans living overseas. If you’re a U.S. citizen abroad, here’s what you need to know.

Key Changes Expats Should Pay Attention To

Lower Tax Rates are Now Permanent

The individual tax rates introduced by the 2017 Tax Cuts and Jobs Act (TCJA) – ranging from 10% to 37% – were originally set to expire after 2025. Under OBBBA, these rates are now permanent.

Increased Standard Deduction

The increased standard deduction remains in place for the 2025 tax year and provides continued relief for expats as well as domestic filers:

• $14,600 for single filers
• $29,200 for married couples filing jointly.

Personal exemptions remain suspended.

More Help for Families

The Child Tax Credit, previously set to revert to $1,000 after 2025, has been increased to $2,200 per qualifying child starting in 2025. Beginning in 2026, the credit will be adjusted annually for inflation.

Families supporting dependents who don’t qualify for the Child Tax Credit – such as elderly parents or adult relatives – can continue to claim the $500 Other Dependent Credit, which has now been made permanent.

Extra Deduction for Seniors

If you’re 65 or older, you can deduct an extra $6,000 from your taxable income. This deduction applies whether you take the standard deduction or itemize.

Giving Back and the New Tax Break for Non-Itemizers

Starting in 2026, taxpayers who take the standard deduction can still benefit from charitable contributions:

Up to $1,000 for individuals

Up to $2,000 for couples filing jointly

New Overtime Pay Deduction

OBBBA introduced a new overtime pay deduction, but for Americans working abroad, it likely won’t apply.

The deduction depends on the Fair Labor Standards Act (FLSA), which generally doesn’t cover employees whose work is done entirely outside the U.S. Section 13(f) specifically excludes anyone whose full workweek is spent in a foreign country. Congress made this exception because labor laws overseas are different, and the U.S. can’t effectively regulate working conditions abroad.

That means even if you work for a U.S. company and receive a W-2, you will not qualify for the overtime deduction if all your work is performed overseas.

Estate and Gift Tax Gets a Boost

Starting in 2026, the exemption for estate and gift taxes jumps to $15 million per person and will continue rising with inflation—offering long-term estate planning opportunities. Americans with foreign assets or dual-tax exposure should consider reviewing their estate plans to optimize cross-border tax efficiency.  This may include updating wills, trusts, or gifting strategies to reflect the new threshold and ensure cross-border alignment.

OBBBA does not introduce any changes to retirement account rules.

• Contribution limits and tax treatment for Roth and traditional IRAs remain unchanged
• The treatment of foreign pension plans remains the same
• Existing IRS reporting requirements for foreign pensions continue

New 1% Remittance Tax Under the Big Beautiful Bill: What You Need to Know 

The One Big Beautiful Bill (OBBBA) introduces a new 1% excise tax on certain remittance transfers beginning in 2026.

Who Is Subject to The Tax?

The new 1% remittance tax (effective January 1, 2026) applies to non-U.S. citizens – including green card holders, visa holders, and others sending cash-funded remittances from the US to recipients living abroad.

The sender is responsible for the tax, which specifically targets transfers made using physical instruments, such as:

• Money orders
• Cashier’s checks
• Similar non-bank payment methods

What Is Exempt?

Transfers made through regulated banks or electronic methods, including wiretransfers, debit or credit card payments, are exempt from this tax.

Implications for Americans Living Abroad

The 1% remittance tax will not necessarily impact US citizens living abroad, since most Americans abroad send money through standard banking or electronic methods.

However, green card holders are not exempt and may be subject to the tax regardless of where they reside.

If you’re a US citizen planning a trip to the U.S., it’s important to be aware of the new remittance tax. While the remittance tax does not apply to U.S. citizens, you may be more likely to use non-bank instruments —such as money orders or cashier’s checks —while stateside. Because remittance service providers are responsible for collecting the tax at the point of transfer, they may not always be able to verify a sender’s citizenship and might apply the tax by default. To avoid issues, we recommend you use electronic or bank-based transfers whenever possible.

What the One Big Beautiful Bill Didn’t Change for U.S. Expats 

Citizenship-Based Taxation Remains Intact

For many Americans living abroad, one of the most speculated reforms was a shift to residence-based taxation (RBT). In late 2024, Representative Darin LaHood introduced the Residence-Based Taxation for Americans Abroad Act (H.R. 10468), sparking discussions and proposing a move away from the longstanding citizenship-based system. This bill gained attention and support from advocacy groups and tax professionals, raising hopes that it might be included in the broader reform package.

Despite the buzz, OBBBA does not modify the longstanding citizenship-based taxation system. Implementing RBT would require extensive updates to the IRS systems and international coordination which are complex changes that fall outside the scope of a bill focused primarily on domestic economic stimulus, tax cuts, and deregulation.

As a result, Americans abroad must continue to file U.S. tax returns and report their worldwide income annually, even if they also pay taxes in their local jurisdiction.

Key Compliance Requirements for U.S. Expats Under the One Big Beautiful Bill 

Fortunately, longstanding provisions remain in place to help avoid double taxation:

• Foreign Earned Income Exclusion (FEIE)
• Foreign Tax Credit (FTC)
• U.S. Tax Treaties

These provisions continue to offer meaningful relief for most taxpayers, but the underlying system of citizenship-based taxation remains unchanged.

Reporting obligations continue as before. Americans abroad must comply with the following forms and requirements:

• Form 1040 – Annual federal income tax return
• Form 2555 – If claiming the Foreign Earned Income Exclusion
• Form 1116 – To claim the Foreign Tax Credit
• Form 8938 – FATCA reporting for specified foreign financial assets over threshold
• FBAR (FinCEN Form 114) – For foreign bank accounts exceeding $10,000 aggregate

It’s important to be aware that not meeting these requirements may lead to penalties, even if no US tax is ultimately due. To stay on track, it’s a good idea to review your filing status each year and consult with a tax advisor familiar with cross-border matters.

Next Steps: Let’s Navigate the Big Beautiful Bill (OBBBA) Together 

OBBBA brings changes, and we know it can feel overwhelming for Americans living abroad. The team at H&R Block Expat Tax is here to help you understand how the new rules affect your situation, answer your questions, and make sure you’re taking advantage of every opportunity while staying compliant.

Reach out today, and let’s make sure you’re ready for what’s ahead.

Prefer to file on your own? Our tax software is built specifically for taxpayers living abroad and includes live customer support. Create an account — you prepare it, and we’ll e-file it!

Update: For the 2025 Tax Year: IRS Form 1099-DA

The IRS has introduced Form 1099‑DA, “Digital Asset Proceeds from Broker Transactions”.  This form will be used by digital-asset brokers to report transactions, including the sale and exchange of cryptocurrencies. It brings brokers into a reporting system similar to securities brokers and helps the IRS verify transactions.

What U.S. expats should know:

• For 2025 transactions, brokers will report gross proceeds; cost basis reporting is not required.
• Beginning in 2026, basis reporting will be required for certain covered digital assets.
• Keep your own records of purchase price, date, and quantity for every digital asset — brokers may not provide full basis information, and you’ll need it to calculate gains or losses accurately on your tax return.

If you have any questions about how the new Form 1099-DA may impact you, Feel free to reach out to one of our advisors today,