U.S. EXPAT TAX GUIDE – SPAIN

Do I need to file US taxes while living in Spain?

If you’re an American living in Spain, whether you’re working, retired, or just enjoying the sunshine, one big question might be: Do I still need to file US taxes?

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The short answer is yes, in most cases.

You still have to file US taxes from abroad

US citizens and Green Card holders must file a US tax return every year—even if they live in Spain full-time. This includes reporting all income earned anywhere in the world.

For the 2025 tax year:

If you’re single, you need to file if you made more than US$15,000.
If you’re married and filing jointly, the limit is US$30,000.
If you’re self-employed, you must file if you earned US$400 or more, even if you didn’t hit the income thresholds above.

You get an automatic extension to file until June 15, but any taxes owed are still due by April 15.

What happens if I’m married to a non-American?

If you’re married to someone who’s not a US citizen or Green Card holder, you can choose one of two options:

Option A: File Separately (default for many couples)

You only report your own income.
Your non-American spouse doesn’t need to file or share financial details.
The filing threshold is very low—just US$5. Even a little interest from a bank account can mean you need to file.
You can’t claim certain tax credits or deductions available to joint filers.

Option B: Elect to File Jointly

You both file as if you’re US residents.
You report both your incomes on the same tax return.
You get a higher deduction and may qualify for tax benefits like the child tax credit.
Your spouse will need a US tax ID number (ITIN).
If your spouse earns a good income, this option could increase your US tax burden—but foreign tax credits can often cancel that out.

Do I need to worry about interest and retirement income

Even if you’re not working anymore, meaning you’re living off pensions, savings interest, or investments, that income still counts into your US tax return.

And if you’re filing as married separately, just US$5 of income means you have to file.

This often surprises retired Americans in Spain—especially those who have married a Spanish citizen and live quietly off modest retirement funds.

How can US expats in Spain avoid double taxation?

US expats in Spain often worry about being taxed by both countries. The good news is, the tax system has ways to help you avoid that.

Here are your main options:

Foreign Earned Income Exclusion (FEIE)

- If you live and work in Spain, you can exclude up to US$130,000 of your foreign salary or self-employment income from US taxes for the 2025 tax year. You must pass a residency or time-based test, like being in Spain for 330 days out of 12 months. You still report the income, but it won’t be taxed.

Foreign Tax Credit (FTC)

- If Spain taxes your income, you can usually get a credit for those Spanish taxes on your US return. This credit reduces or cancels out what you’d owe the IRS. This is often the better option for people paying high taxes in Spain.

US-Spain Tax Treaty

- The US and Spain have a tax agreement that helps sort out which country taxes what. It doesn’t exempt you from filing, but it supports the use of credits and exclusions.

Totalization Agreement

- If you’re working in Spain and paying into the Spanish social security system, this agreement makes sure you don’t have to pay into both US and Spanish systems at the same time.

Can I claim the Additional Child Tax Credit while living in Spain?

Yes, you may be able to claim the Child Tax Credit (CTC) if you have children under age 17 who are US citizens with Social Security numbers.

The credit is worth up to US$2,000 per child.
Up to US$1,700 per child can be refunded — meaning the IRS may send you a payment, even if you don’t owe taxes.
To qualify for the refund, you need to have taxable income. If you exclude all your income using the FEIE, you might not get the refund.

Also, make sure your filing status is correct. If you’re married to a non-US spouse, you may need to file separately unless you choose to include your spouse on your return.

Filing jointly might help you qualify for the higher refundable credit—but it also means reporting your spouse’s income.

What are the US tax rules for investing and owning property in Spain?

Buying Property

You don’t pay US tax just for owning property in Spain. But when you sell it, you’ll need to report any profit (capital gains) on your US tax return—even if you already paid tax in Spain.

If you lived in the property and met certain conditions, you may be able to exclude up to US$250,000 of the gain (US$500,000 if married filing jointly).

Rental Income

If you rent out your Spanish property, that rental income must be reported to the IRS—even if it’s just an Airbnb. You can deduct expenses like repairs, property taxes, and utilities.

Spain also taxes rental income, so you’ll likely use the foreign tax credit to cancel out any US tax.

Investments

If you invest in Spanish stocks, mutual funds, or other assets, you must report those investments to the IRS. You may need to file special forms if your foreign assets are over certain limits, such as:

FBAR: If you have over US$10,000 total in foreign bank or investment accounts.
Form 8938: If your total foreign financial assets exceed US$200,000 (single) or US$400,000 (married filing jointly) at year-end.

Also, Spain may require you to file Modelo 720 to report your US assets if you live there.

What do self-employed US expats need to know about Taxes in Spain?

If you work for yourself in Spain (freelancer, contractor, consultant, etc.), you’re considered an “autónomo”—and you have tax obligations in both Spain and the US.

In Spain:

You must register as self-employed.
You’ll file quarterly taxes and pay into Spanish social security.
Having a Spanish accountant is highly recommended to help with paperwork and deadlines.

In the US:

If you earn US$400 or more from self-employment, you must file a US tax return.
Normally, you’d owe US self-employment tax (15.3%), but you may be exempt if you’re paying into Spain’s system under the totalization agreement.
Your business income can qualify for the FEIE or FTC, depending on your situation.

You might also be required to file additional forms if you own a Spanish business, such as a Spanish SL (similar to an LLC).

How do I know if I’m a Spanish tax resident?

If you live in Spain for most of the year, you’re probably a Spanish tax resident. Here’s how to tell for sure:

You spend more than 183 days in Spain in a calendar year.
Your main job or business is based in Spain.
Your spouse and children live in Spain, and you’re financially connected to them.

Even if you don’t register with the Spanish government, the tax authorities may still treat you as a resident based on these rules.

If you are a tax resident, Spain will tax your worldwide income (not just what you earn in Spain). You’ll need to register with the tax office using a form called Modelo 030, and you may need to file Modelo 720 if you have foreign bank accounts or property outside Spain.

If you’re only in Spain for a short time or don’t meet the criteria above, you might still need to pay non-resident income tax (IRNR) on income you earn from Spanish sources (like rent from a Spanish property).

Spain also offers a special tax deal known as the Beckham Law. If you qualify, you can choose to be taxed only on Spanish income for six years, at a lower rate. This is sometimes used by people moving to Spain for work.

If you’re unsure, it’s a good idea to speak with a tax professional. They can help you figure out if you’re a tax resident or not—and help you avoid problems during tax inspections.

How does the Spanish tax system work for US citizens?

If you live in Spain and you’re a US citizen, you’ll need to follow Spanish tax rules and still file taxes with the IRS in the US. Here’s a basic look at how the Spanish tax system works:

Income Tax: Spain has different tax rates depending on how much you earn. The more you make, the higher your rate—from 19% to 47% for general income like salary or self-employment.
Savings Tax: Interest from bank accounts, dividends, and capital gains are taxed separately, between 19% and 26%.
Social Security: If you’re working in Spain, both you and your employer must pay into the Spanish social security system. If you’re self-employed, you pay the full amount yourself.
Property Taxes: If you own a home in Spain, you’ll pay a property tax once a year. The rate depends on the location.
Wealth Tax: If your assets (bank accounts, property, investments) are worth more than a certain amount, you may need to pay wealth tax. Some regions in Spain reduce or cancel this tax.
VAT (Value-Added Tax): This is similar to a sales tax. It’s included in most purchases, typically at 21%.

All of this is handled by the Agencia Tributaria, which is Spain’s national tax agency. They’re responsible for tax assessments, inspections, and making sure residents pay the right amount.

What are the US tax deadlines for expats living in Spain?

Even though you live abroad, you still have to follow IRS deadlines. Here’s what to know for the 2025 tax year (filed in 2026):

April 15, 2026: This is the standard US tax deadline. You must pay any taxes you owe by this date, even if you get extra time to file.
June 15, 2026: As an expat, you get an automatic 2-month extension to file your tax return, but interest will still apply if you owe tax.
October 15, 2026: If you need more time, you can request an extension using Form 4868. This gives you until mid-October to file.
June 30, 2026: If you have over US$10,000 total in foreign bank accounts at any point in 2025, you must file an FBAR (Foreign Bank Account Report). This is a separate form from your tax return and must be filed online.

In Spain, the local tax return (Modelo 100) is usually due between April and June each year for the prior year’s income. For example, your 2025 Spanish taxes will be filed in 2026, between April and June.

If you’ve missed past US filings, you may qualify for the Streamlined Procedure—an IRS program that lets expats catch up without penalties if the mistake was not intentional.

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