U.S. Taxes When You Live in Spain: FBAR, FATCA, FEIE and the Treaty

For a U.S. citizen, expat taxes in Spain run on two tracks: since the United States taxes its citizens on worldwide income, the Spanish return sits alongside Form 1040 rather than replacing it. According to the IRS, the foreign earned income exclusion (FEIE) and the foreign tax credit can be claimed only by filing a U.S. return. Around that obligation sit the FBAR (Report of Foreign Bank and Financial Accounts) for Spanish accounts above $10,000 combined, Form 8938 for larger holdings, and a treaty that relieves double tax. This article is for informational purposes only and is not tax or legal advice; verify current requirements with the relevant Spanish authority or a licensed professional.

Do you have to file U.S. taxes if you live in Spain?

Yes. A U.S. citizen living in Spain files Form 1040 once gross income reaches the threshold, which the Form 1040 instructions set at $15,750 for a single filer under 65 for 2025, and foreign income you can exclude still counts toward that test.

The same instructions set $31,500 for a couple filing jointly with both spouses under 65. Paying Spanish tax does not lift the duty: Article 1(3) of the U.S.-Spain income tax treaty, known as the saving clause, lets each country tax its citizens as if the treaty had not come into effect, and Publication 54 states that U.S. citizens cannot generally use a treaty to reduce their U.S. tax. Publication 54 also warns that unfiled international information returns can suspend or extend the IRS’s time to assess your return, and can reduce the foreign tax credit allowed.

State returns carry a separate risk. New York keeps your domicile until you show that you abandoned it, and California treats someone domiciled there but away for a temporary purpose as a resident, as breaking state residency after moving to Spain explains.

When are U.S. and Spanish taxes due for an American in Spain?

The U.S. return and the FBAR are due April 15 after each tax year, the return moving automatically to June 15 for those living and working abroad; Spain’s income tax return for 2025, the Renta, ran from April 8 to June 30, 2026.

A Form 4868 extends the time to file; it does not extend the time to pay.

Which U.S. tax forms does an American in Spain file?

An American living in Spain files Form 1040, the FBAR once accounts abroad exceed $10,000 combined, Form 8938 for larger holdings, and Form 2555 or Form 1116 to exclude earned income or credit Spanish tax.

Do Spanish bank accounts go on the FBAR?

Yes: a Spanish bank account is generally a foreign financial account, and a U.S. person files the FBAR once such accounts exceed $10,000 combined at any time in the year, whether or not they produce taxable income.

If two accounts have a combined balance above $10,000, both are reported. Under 31 CFR 1010.350, the count includes bank and securities accounts, cash-value insurance and annuity policies, and shares in a mutual fund or similar pooled fund available to the general public with a regular net asset value determination and regular redemptions, which many Spanish fondos de inversión (investment funds) likely meet. Every U.S. person named on a joint account has a financial interest in it, and signature authority, meaning the power to control an account’s money by instructing the bank, counts even without ownership.

Spouses whose accounts are all joint may file one FBAR with Form 114a, according to the FinCEN instructions, and parents file for a child who cannot. The FBAR goes through the BSA E-Filing System of the Financial Crimes Enforcement Network (FinCEN), never with the tax return, and the records of each reported account are kept for five years from the due date. The regulation, 31 CFR 1010.306(c), still prints a June 30 due date, whereas the FinCEN instructions and the IRS give April 15, set by a later statute.

FinCEN has balances converted at the Treasury reporting rate for the last day of the year and rounded up to the next dollar. That rate was 0.851 euro per dollar on December 31, 2025, so for 2025 maximum balances adding up to more than 8,510 euros crossed the line. Income is converted differently, at the rate prevailing when it was received or at an IRS yearly average, which was 0.886 for 2025.

What does a late or missing FBAR cost?

The FinCEN instructions, last revised in January 2017, print the statutory caps. A non-willful violation carries up to $10,000, and nothing at all where there was reasonable cause and the balance was properly reported; a willful one carries up to the greater of $100,000 or 50 percent of the balance. For penalties assessed from January 17, 2025, 31 CFR 1010.821 raises the fixed amounts to $16,536 and $165,353. In Bittner v. United States (2023), the Supreme Court held that the non-willful penalty accrues per report rather than per account, and the Internal Revenue Manual applies that ruling and caps non-willful penalties across open years at 50 percent of the highest aggregate balance. If the IRS has not contacted you and you are not under investigation, the IRS advises filing late FBARs as soon as possible. Where tax returns are missing too, see U.S. expat back taxes and the streamlined procedure.

When does Form 8938 apply, and what about Spanish funds?

Form 8938 is due from a U.S. filer abroad whose specified foreign financial assets exceed $200,000 at year end or $300,000 at any time, single or separate, or $400,000 and $600,000 jointly, under the Form 8938 instructions; a Spanish fund may also require Form 8621.

Form 8938, the FATCA (Foreign Account Tax Compliance Act) statement filed with the return, does not replace the FBAR; its instructions are still the November 2021 revision. The higher thresholds for filers abroad require the tax home and one of the two residence tests of the exclusion, set out below. If no return is due, no Form 8938 is due either, and foreign real estate held directly goes on neither form. The penalty is $10,000, plus up to $50,000 more after an IRS notice, for a potential maximum of $60,000.

Publication 54 warns that a fund or ETF not domiciled in the United States, a Spanish fondo included, may bring a Form 8621 obligation; under the December 2025 instructions, a PFIC is a company with 75 percent or more passive income or at least 50 percent passive assets. A shareholder files one Form 8621 per PFIC per year in five listed circumstances, either with the return or, when no return is due, directly with the IRS in Ogden.

Do you pay taxes in both Spain and the U.S.?

Usually both: an American in Spain pays Spanish tax as a resident for any calendar year with more than 183 days in Spain, under article 9 of Ley 35/2006, and U.S. tax as a citizen, with the exclusion or foreign tax credit relieving the overlap.

The same article also makes you resident when the main base of your activities or economic interests is in Spain, counts sporadic absences toward the 183 days unless you prove tax residence in another country, and presumes you resident, unless you prove otherwise, when your spouse, not legally separated, and your dependent minor children live in Spain. On the U.S. side, the foreign earned income exclusion, claimed on Form 2555, requires a tax home abroad, which according to the instructions you lack while your abode is in the United States. It also requires one of the two tests in Publication 54: bona fide residence for an uninterrupted period that includes an entire tax year, or 330 full days abroad in 12 consecutive months. It reaches pay for personal services only, since the IRS classes pensions, Social Security, interest, dividends and capital gains as unearned income. Retirement accounts follow their own rules: how 401(k) and IRA withdrawals are taxed in Spain. Publication 54 adds that the exclusion bars the earned income credit and the additional child tax credit for the year, and that after a revocation it cannot be chosen again within 5 years without IRS approval under 26 CFR 1.911-7. The housing amount is your housing expenses minus the base amount, with expenses counted only up to the limit:

Notice 2026-25, published in Internal Revenue Bulletin 2026-17, allows a qualified individual to apply the 2026 limits to 2025, which means Madrid’s 2025 limit can be $59,700. Housing paid with employer-provided amounts, salary included, is excluded, whereas housing paid from self-employment earnings is deducted.

Neither the exclusion nor the housing amount reduces self-employment tax. The U.S.-Spain Social Security totalization agreement can provide the exemption instead: a self-employed American covered only by the Spanish system attaches a Spanish certificate of coverage to Form 1040 for each exempt year. For the Spanish contributions themselves, Publication 514 allows neither credit nor deduction.

The foreign tax credit on Form 1116 offsets U.S. tax with Spanish income tax, provided that it stays within the share of U.S. tax on foreign-source income, and it covers only the legal and actual Spanish liability. Under the instructions, unused tax carries back 1 year and forward 10.

Spain’s income tax return, the Renta, comes months after the tax year it covers. On the cash method, Spanish tax is credited in the year you pay it; Publication 514 allows an election to credit it instead in the year it accrues, generally the last day of Spain’s calendar tax year. The election is made by checking “Accrued” on Form 1116 of a timely original return, and it binds later years. Where the tax paid differs from the credit claimed, a redetermination follows, generally on Form 1040-X, by the date that 26 CFR 1.905-4 sets.

The 3.8 percent net investment income tax applies to net investment income when modified adjusted gross income, which adds back section 911 exclusions, is above $200,000 single, $250,000 joint or $125,000 married filing separately, thresholds that are not indexed for inflation, and 26 CFR 1.1411-1 allows no foreign tax credit against it. The treaty covers “the Federal income taxes imposed by the Internal Revenue Code” without naming this tax, and no official page read for this guide says whether its relief reaches it; the prudent assumption is that the Code’s rule applies.

Does Spain have a tax treaty with the U.S.?

Yes: Spain and the United States have an income tax convention, signed in Madrid on February 22, 1990 and amended by a 2013 protocol; its Article 24 relieves double tax, while its saving clause still lets the United States tax its citizens.

Under Article 24(2) the United States credits Spanish income tax, while under Article 24(1)(a) Spain deducts U.S. tax only on income the United States may tax other than solely by reason of citizenship. Article 24(3) then treats income taxed by reason of citizenship as arising in Spain to the extent needed to avoid double taxation, without ever leaving less U.S. tax than a non-citizen would pay, and Publication 514 lists Spain among the treaties with this re-sourcing. The saving clause still holds, subject to Article 24(3), as the Treasury’s technical explanation confirms, and Article 1(4)(a) exempts Article 24 from it.

A protocol signed on January 14, 2013 entered into force on November 27, 2019, according to both the Treasury and the Boletín Oficial del Estado, Spain’s official gazette. On where it was signed, the documents part company: its own text says Madrid, and the technical explanation says Washington.

The regulation and the Form 1116 instructions do not agree on disclosure. 26 CFR 301.6114-1 requires Form 8833 for a treaty position that modifies the Code and reduces tax, but waives the form for an individual’s income re-sourced under a double taxation article, for pensions, annuities and Social Security, and for an individual’s items totaling $10,000 or less. Publication 514 says the additional credit from re-sourcing needs none, whereas the 2025 Form 1116 instructions say filers of treaty re-sourced income may be required to file Form 8833. The regulation’s waiver reaches income re-sourced under a double taxation article such as Article 24(3), so a filer relying on it may not need the form; whether any other treaty position must be disclosed is a question for a licensed professional.

Can you file a joint return with a nonresident spouse?

An American married to a nonresident alien generally files married filing separately, with a $5 threshold for 2025, unless both spouses choose to treat the nonresident spouse as a U.S. resident, which requires a joint return for the year of the choice.

A couple generally cannot file jointly if either spouse is a nonresident alien at any time in the year, and head of household requires a qualifying person other than the spouse.

Section 6013(g) is the statute behind that choice. According to the IRS, each spouse then reports worldwide income for that year and every later one unless the choice is ended or suspended, and generally neither can claim treaty benefits as a resident of a foreign country, plus a possible saving clause exception. The first year requires a joint return with a statement signed by both. The choice ends by revocation, death, divorce or legal separation, or termination by the IRS for inadequate records; the statute then bars the same two people from electing again, and the IRS describes it as once in a lifetime even with a different spouse. An electing spouse becomes a specified individual for Form 8938, although the Internal Revenue Manual says the election does not count for FBAR residency.

Without the election, Publication 555 and section 879 assign earned income other than business income to the spouse who performed the services, apply section 1402(a)(5) to business income, give separate-property income to that spouse, and leave other community income, such as dividends, interest and gains, to the community property law, which can be a foreign country’s; no IRS page names Spain. The Civil Code makes the sociedad de gananciales, under which earnings and income are shared, the default in the absence of a marriage contract, while regions with their own civil law can set another default, and Catalonia’s is separation of property; for marriages after January 29, 2019, an EU regulation decides which law applies. Whether a Spanish regime counts for section 879 is a question for a professional.

Your next U.S. filing from Spain, and who can do it alone

The next U.S. step from Spain is a list of every account abroad with its highest 2026 balance, for the FBAR and Form 1040, which the general rules make due April 15, 2027, or June 15, 2027 for the return on the automatic extension.

Before that, where it applies, comes the Modelo 720 on assets abroad, U.S. ones included, held in 2026: its general rule of January 1 to March 31 of the following year gives January 1 to March 31, 2027, though the Agencia Tributaria still shows only the 2026 window.

A salaried filer with Spanish bank accounts, no funds, no business and no nonresident spouse can prepare Form 1040 with Form 2555 or Form 1116 and file the FBAR without help, provided that the software accepts a foreign address, which the IRS says a limited number of companies offer. Self-employment, a Spanish fund, a treaty position, a 6013(g) decision or missed years are another matter, and are when many filers choose a cross-border preparer. MyExpatTaxes, an EasySpainNow partner (affiliate link: EasySpainNow may earn a commission), prepares and e-files the federal return, the FBAR and the FATCA forms; the rules above are the same whoever files.

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