U.S.–Italy Tax Compliance | JSBC
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For Americans, Italians & Dual Residents

Two countries. One return cycle.

If your financial life crosses the U.S. and Italy, you owe returns to both. We file them — federal and state in the U.S., dichiarazione in Italy — under one roof, with one team that coordinates the numbers so they agree.

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U.S. citizenship is a tax obligation. Italian residency is another one.

The United States taxes its citizens and green card holders on worldwide income regardless of where they live — one of only two countries in the world that does this. Italy taxes its tax residents on worldwide income too. When you live in Italy as a U.S. citizen, both countries want a return. They use different forms, different calendars, different rules, and different currencies. None of that is optional.

The coordination problem is where most filers lose money. A U.S. preparer who doesn't speak Italian tax will misread your Italian forms. An Italian commercialista who doesn't speak the U.S. code will misclassify your U.S. brokerage account, your 401(k), your Roth IRA. The foreign tax credit on one side has to match the tax actually paid on the other side. The treaty has tiebreakers that only work if both filings agree. When the two firms don't talk, the answers contradict — and the IRS or Agenzia delle Entrate gets to ask which one is right.

JSBC files both. The U.S. side is run out of our Chicago office; the Italian side is run out of our office in Sicily. Same firm, same calendar, same client portal. The numbers reconcile because the same team is producing both returns.

On the U.S. side

Federal, state, and the rest of the expat package.

Federal & state return preparation

Form 1040 with every expat schedule that applies — 2555 if FEIE makes sense, 1116 if the FTC wins, 8833 for treaty-based positions. State filings where you still have residency ties.

FBAR & FATCA compliance

FinCEN Form 114 for every foreign account above the $10K aggregate threshold, plus Form 8938 for higher-balance reporting. See the FBAR deep-dive below.

Foreign tax credit & treaty positioning

Form 1116 done right, with carrybacks and carryforwards tracked year over year. Treaty-based positions on Form 8833 where they actually apply.

Streamlined Foreign Offshore catch-up

For Americans who've been in Italy for years and haven't filed. Three years of returns, six years of FBARs, non-willful certification, and the IRS conversation if one comes.

On the Italian side

Dichiarazione, regimes, and IVIE/IVAFE.

Dichiarazione dei redditi

Full Modello Redditi PF or 730, including foreign-source income, U.S. brokerage gains, U.S. pension distributions, and U.S. rental income. Filed via Agenzia delle Entrate.

Regime selection & application

Impatriati, 7% Southern Italy flat tax, forfettario, neo-domiciliati €200K flat tax. We model each, recommend, and file the election at the right time.

IVIE & IVAFE on foreign assets

Italian wealth tax on your U.S. real estate (IVIE) and U.S. brokerage and bank accounts (IVAFE). RW quadro filed correctly, U.S. property tax credit applied.

F24 scheduling & U.S. coordination

Italian taxes paid in installments through F24. We compute, schedule, and reconcile against U.S. estimated payments so foreign tax credit numbers line up next year.

FBAR & FinCEN 114

The form that catches more Americans than the 1040 ever does.

The Foreign Bank Account Report — FBAR, technically FinCEN Form 114 — is filed separately from your tax return through a different agency. It's not part of the IRS. It's part of the Treasury Department's anti-money-laundering apparatus. That distinction matters because the penalty regime is brutal: up to $10,000 per non-willful violation per account per year, and willful penalties that scale to half the account balance.

You file an FBAR if the aggregate value of all your foreign financial accounts exceeded $10,000 at any point during the calendar year. "Aggregate" means added together. Three accounts at $4,000 each triggers it. The $10,000 is not a per-account threshold. It's not pegged to a single moment in time either — if you transferred money between accounts mid-year, both balances might count.

The accounts that catch people: Postepay cards with a balance, Italian brokerage accounts, joint accounts with an Italian spouse, business accounts where you're a signatory but not an owner, cash-value life insurance with a foreign carrier, and Italian pension accounts in certain configurations. We work through every account systematically.

If you haven't filed FBARs and should have, the Streamlined Foreign Offshore Procedure is almost always the right path. Penalties for non-willful failures are typically waived. The biggest risk isn't filing late — it's filing wrong, or never filing and getting a notice from FinCEN years later. Read our full FBAR guide for the mechanics.

How we work

Both sides drafted, then reconciled, then filed.

01

Consultation & checklist

30-minute call. We learn your situation, give you secure portal access, and customize the document list to your income types on both sides.

02

Draft both returns

U.S. side and Italian side prepared by their respective teams. FEIE versus FTC modeled. Italian regime evaluated. FBAR list verified.

03

Reconcile & review with you

Both returns cross-checked so the foreign tax credit on the U.S. side matches what's paid in Italy. Live walkthrough with you before anything's signed.

04

File both sides

IRS e-file plus FinCEN 114 on the U.S. side. Dichiarazione via Agenzia delle Entrate portal on the Italian side. F24 schedule and confirmations to your portal.

Common questions

Questions we hear about U.S.–Italy filing.

Do I really have to file a U.S. return if I already file in Italy?
Yes. The United States taxes its citizens and green card holders on worldwide income regardless of where they live. Filing in Italy doesn't satisfy your U.S. filing obligation — they're parallel systems running on different calendars and different rules. See: U.S.–Italy Dual Tax Filing: What to Expect Each Year.
What's the difference between the FEIE and the foreign tax credit?
The Foreign Earned Income Exclusion excludes up to roughly $130,000 of earned income from U.S. tax. The Foreign Tax Credit credits Italian tax you actually paid against your U.S. tax owed. For most Americans in Italy the FTC wins because Italian rates are higher than U.S. rates, but we always model both. See: FEIE for U.S. Citizens in Italy.
I haven't filed in five years. Am I in trouble?
Probably not, if the non-filing was non-willful. The IRS Streamlined Foreign Offshore Procedure is designed exactly for this situation — three years of returns, six years of FBARs, a non-willful certification, and penalties are typically waived if you qualify. It's a structured process, not a panic.
Do I have to pay IVIE on my house in California?
Yes — IVIE is an Italian wealth tax on foreign real estate owned by Italian tax residents, standard rate 1.06% in 2024 onward. There's a credit for U.S. property tax paid which usually offsets a meaningful share. See: Understanding IVIE.
What's the impatriati regime and do I qualify?
A reduction in taxable Italian-source employment or self-employment income for workers who become Italian tax-resident after living abroad. Rules changed substantially in 2024 — standard exclusion is now 50% with conditions for higher percentages, capped at €600,000. See: Italy Impatriati 2026-2027 Rule Changes.
Do I need to report my Italian bank account to the IRS?
If the aggregate value of your foreign financial accounts exceeded $10,000 at any point during the year, yes — you file an FBAR. Form 8938 thresholds are higher and depend on filing status and whether you live abroad. Both apply on top of your regular 1040. See our full FBAR guide.

Both returns. One firm. No contradictions.

A 30-minute consultation will tell you what's missing on either side — and what you don't actually owe.

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