If you are an American living in Austria you remain under the purview of the IRS, and are still obligated to file taxes in the US.
However, if you earn income in Austria – and particularly if you freelance, have multiple jobs, or have income outside of a standard job where the taxes are automatically withheld – you'll likely need to make an Austrian income tax declaration as well.
For this reason, many Americans in Austria have to complete two tax declarations each year.
In addition, another thing to keep in mind is the US's requirement to declare foreign bank accounts.
READ ALSO: Everything you need to know about filing taxes in Austria
US tax declaration
One of the most common issues for US citizens living abroad involves the FBAR (Foreign Bank Account Report), a US requirement designed to prevent the use of overseas accounts for illicit financial activity.
Under US rules, individuals must file an FBAR if the combined value of their foreign accounts – including bank accounts in Austria – exceeds $10,000 at any point during the year. This flat, and notoriously low, threshold applies regardless of how many accounts are held.
This obligation also applies beyond standard bank accounts and includes brokerage accounts, certain private pensions, mutual funds, trusts and joint accounts. Find more details here.
Keep in mind that some taxpayers may also need to file more forms under FATCA if their foreign assets rise above certain thresholds.
What if you haven't done this?
Tax advisors who are familiar with both US and Austrian rules suggest that mistakes around FBAR requirements are common.
So, if you have failed to declare Austrian (or other foreign) accounts, there is no need to panic. There are a few solutions to go about correcting this mistake:
First is the so-called streamlined procedure. This procedure is designed for non-wilful conduct, or in other words, situations where someone's failure to report was due to a lack of awareness rather than intentional wrongdoing.
Under this programme, individuals typically need to submit three years of amended federal tax returns and six years of FBARs.
Alternatively, there's the FBAR delinquency procedures, where you file the missing reports for the past six years. Even under a non-wilful standard, this may involve penalties, but these programmes offer a structured way to come back into compliance.
The FBAR has a standard deadline of April 15th each year, but there's an automatic extension to October 15th if you live abroad. You will not suffer penalties for lateness.
READ ALSO: The 2026 tax deadlines that Americans in Austria need to know
But failing to file can still be costly. Non-wilful violations may result in civil penalties of up to $10,000 per breach, while wilful violations can trigger far steeper penalties – $100,000 or 50 percent of the account balance.
What about Austrian tax obligations?
Unlike the US, you are not generally required to report the balance of your foreign bank accounts (such as those in the US). Instead, Austria taxes your worldwide income.
If you are an Austrian tax resident, meaning you live in Austria for more than six months of the year, or have a home there, then you are also required to report income earned on your foreign accounts, for example through accumulated interest, to the Finanzamt in Austria.
Depending on the circumstances, this may also include dividends, capital gains from the sale of stocks and ETFs and distributions from retirement accounts.
Another thing to note is that Austria generally does not recognise the tax-free treatment of Roth IRAs in the same way as the US.
As a result, distributions from a Roth IRA are taxable in Austria – even if they are tax-free under US law.
For more complex cases or if you have any individual questions, taxpayers should seek professional advice.
With reporting by Emma Albright and Rachel Loxton
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