7 Tips for Filing Your American (and Italian) Taxes as an Expat in Italy

Su Guillory
Apr 25
3 min read

So you’ve taken the leap and you're living the dream under the Italian sun, sipping espresso and navigating bureaucracy like a pro (or trying to). But one thing that doesn’t get lost in translation? Taxes.

As an American expat in Italy, you're responsible for filing taxes in both countries. Yes, even if you're paying taxes in Italy, Uncle Sam still wants to hear from you. But don't worry. I've got practical, sanity-saving tips to help you get through tax season on both sides of the ocean.

1. Take Advantage of the Extension

The IRS gives expats an automatic extension to file until June 15, which is a lovely gesture, especially since the Italian tax season starts later than the American one. But don’t use this as an excuse to procrastinate. Use that extra time wisely, especially if you’re waiting on Italian tax documents.

✨ Pro Tip: You can also request an additional extension to October 15 if needed. But be aware: an extension to file is not an extension to pay. You'll have to pay interest and possibly fees on any payments you owe.

2. Hire a Commercialista

In Italy, the commercialista is queen (or king) when it comes to handling tax matters. Think of this person as your local financial fairy godparent: they’ll help you navigate the Italian tax system, file your dichiarazione dei redditi, and make sure you’re not missing out on deductions or credits.

✨ Pro Tip: A commercialista familiar with expat issues (especially the regime forfettario or the 7% flat tax for pensioners) is worth her weight in parmesan.

P.S. Want a referral for a commercialista? Get in touch.

3. Prep Your Italian Taxes Early

Here’s a trick not many expats realize: if you prep or file your Italian taxes before your American ones, you can use what you paid in Italy as a credit on your U.S. return. This helps offset double taxation thanks to the Foreign Tax Credit.

✨ Pro Tip: Keep records of payments and make sure you have official documentation (like the Italian F24 tax form) to share with your U.S. tax preparer.

4. Hire a U.S. Tax Expert (at Least the First Year)

Even if you’re a turbo-taxing whiz back home, expat taxes are a different animal. Between FATCA, FBAR, foreign earned income exclusions, and credits, it’s easy to miss something crucial. A tax expert with experience in expat filings can help you get it right...and sleep better at night.

I hired a firm that helped expats for the first year, because I'd moved halfway through the year. Since then, however, I've found that TurboTax is fairly easy to use, even if you live abroad.

✨ Pro Tip: Look for someone who works with Italy-based clients. Time zones and local knowledge make a big difference.

5. Don’t Forget to Report Foreign Bank Accounts (FBAR)

If the total in your foreign bank accounts ever exceeds $10,000 USD (yes, even briefly), you’ll need to file an FBAR (Report of Foreign Bank and Financial Accounts). It's a separate filing from your regular tax return, and skipping it can lead to hefty penalties.

✨ Pro Tip: Even small accounts count—-yes, that prepaid PostePay card too.

6. Consider the Foreign Earned Income Exclusion (FEIE)

If you're working in Italy, the Foreign Earned Income Exclusion lets you exclude a chunk of your income (over $120,000 as of 2024) from U.S. taxation. But you must meet the bona fide residence or physical presence test.

✨ Pro Tip: The FEIE and Foreign Tax Credit don’t always play nicely together—-your tax pro can advise which is better for you.

7. Keep Excellent Records (Your Future Self Will Thank You)

In Italy, paperwork rules everything. Keep digital and physical copies of your Italian tax filings, payment receipts, and any correspondence. The IRS may not audit often, but if they do, they’ll want to see those documents.

✨ Pro Tip: A cloud folder labeled “TAXES—DON’T DELETE” might just be your best friend.

Living in Italy is a dream come true...but the tax situation? Not so dreamy. With the right help and a bit of organization, though, it becomes manageable. And once you’ve got the process down for filing taxes as an expat in Italy, you can go back to focusing on what really matters, like deciding whether your spritz should include Aperol or Campari.

Have questions about living or working in Italy as an expat? I offer coaching for women ready to make the move—-with fewer surprises and more support. Learn more here.