Get to know the authorAlthough maintaining a US address may not be a priority when moving overseas, understanding how to do so is beneficial. Despite varying circumstances, having a US mailbox while living abroad can often prevent future logistical issues.
But what exactly are the benefits of maintaining a US mailing address, and how can you do so? We’ll answer both of those questions and more below.
Keeping a mailbox in the US while living abroad
For some, maintaining a US mailing address simply involves updating their primary address to that of a parent, another family member, or a trusted friend. Others might opt for a US virtual mailbox or retain their US property to preserve their address.
There are several good reasons for doing so:
1. US tax purposes & IRS filing requirements
Relocating abroad does not exempt you from US tax obligations. In fact, all American citizens and permanent residents who meet the minimum income requirements must file a US return. Maintaining a US address while living abroad can make things easier when it comes to:
IRS correspondence
A US mailing address facilitates easier contact from the IRS if necessary. And if there’s one letter you don’t want to miss, it’s one from the IRS. If you receive an audit notice or a request to amend your return and don’t comply with their instructions, you may face serious legal and financial consequences.
Should you put your US address or foreign address on your US tax return?
If you have family and friends that you trust to receive and notify you of personal mail, it may be better to list their address on your return instead of your foreign address. Foreign mail services can be slower and less reliable than domestic ones, depending on your location.
Even if you don’t receive an audit notice or a request to amend your return, it’s not uncommon for the IRS to send follow-up communications — and maybe even a refund check. You may also choose to use a virtual mailbox (more on that in a bit).
Pro tip:
Although many expats abroad use a family member or friend's address, this practice is not permitted in all states. Make sure to check the rules in your state, and consult with your expat tax professional regarding the best strategy for you.
State taxes
Some states will require you to file a tax return even if you live abroad (especially the “sticky states”: California, New Mexico, New York, South Carolina, and Virginia). It is crucial for the state tax authority to be able to contact you.
US business correspondence
Freelancers and business owners must maintain a physical address to keep their US business registration active.1 Employers may also require remote employees abroad to have a US address for the delivery of essential work-related documents.
2. Maintain access to US financial services & credit cards
Ease of opening accounts
Whether you want to switch banks, start a bank account for your business, or create a dedicated account for savings, opening any kind of US-based financial account typically requires you to provide a US mailing address.2
Staying the course on your US investment strategy
Many foreign financial institutions decline American clients because of stringent US reporting requirements. Additionally, expats should know that most foreign mutual funds receive much less favorable tax treatments than domestic ones. Withdrawing funds from a US retirement account for reinvestment abroad may result in penalties if you are not yet of retirement age. As such, many US expats choose to keep their US-based investment accounts.
Of course, you should always research your options carefully and consult with a professional — but generally, keeping a mailbox in the US while living abroad makes it easier to maintain your US-based investment accounts.3 Especially if you don’t plan on living abroad in the long term, moving your investments abroad and back again can be more of a headache than it’s worth.
Accessing your credit score (and continuing to build credit)
Maintaining a good credit score simplifies returning to the US or making significant purchases, such as real estate. With a US-based address, you can keep your credit card, which will give you visibility into your credit score and even allow you to build credit if you choose.
3. Holding and/or proving state residency status
Residency for tax purposes
As we mentioned earlier, it’s common for those who most recently lived in the sticky states — California, New Mexico, New York, South Carolina, and Virginia — to have to file a state tax return. And unfortunately, some of those states (especially New York and California) have high tax rates. Each state has different residency requirements, but having a US mailing address is one of several factors that can help you establish residency — which can in turn allow you to change your state residency to one with lower or no taxes.
Access to benefits
Maintaining a US address may allow you to continue to receive benefits offered by your state, such as in-state tuition.4 You may need more than an in-state mailing address to keep those benefits, but it can certainly help in some situations.
4. Receiving physical mail & packages
If you’re expecting any important physical mail, maintaining a US address while living abroad can help ensure that nothing critical slips through the cracks. Meanwhile, if you want, need, or are expecting a package from a US-based company or organization, having it sent to your US address and picking it up during a planned visit to the States can be easier than having it shipped abroad.
5. Participating in US elections
An in-state address can facilitate continued voting in your last state of residence or another state where you maintain residency. Not all states allow you to vote from abroad, however, so you’ll need to check your state’s rules.5 Although your mailing address does not affect your federal tax liability, it can influence state tax obligations, underscoring the importance of registering with an in-state address.6
How to maintain a US address while living abroad
There are a few ways US expats can maintain a US address while living overseas.
Via a physical address
As previously noted, you can maintain a physical address by updating it to a family member or friend’s address, if permitted by the state. However, ensure that this person is trustworthy enough to handle sensitive documents such as bank statements and tax returns.
Should you choose this option, remember to update your address in the following areas:7
- Your tax return
- A US Postal Service change of address form
- Voter registration records
- Bank or other financial accounts
- Your company’s HR platform (for employees)
- Your business registration records (for business owners)
- Subscription service accounts
- Utility company accounts
- Any account or profile from a business or organization that you regularly receive mail or packages from
Virtual mailbox
If you don’t have a friend or family member whose address you feel comfortable using — or if the state they reside in prohibits it — you may want to consider a virtual mailbox.
Virtual mailboxes give you a real, physical US address (in the location of your choice) where you can have mail and packages delivered. Then, they scan any incoming mail you receive and upload it to a digital mailbox you can access on any device. Many services automatically deposit any checks and give you the ability to forward any packages or important incoming mail. You can also shred or toss any mail that you don’t care about.
While there is no US Postal Service virtual mailbox, there are many different virtual mailbox vendors. Some of the most well-known ones include US Global Mail, Earth Class Mail, and Anytime Mailbox.
Keeping a property
Your third option to maintain a US mailing address is to hold onto the property that you already own in the US. While many Americans who move abroad sell their property, keeping it can provide you not only with a home address in the US but also a place to stay during visits or even rent out to earn some passive income while overseas.
US tax implications of keeping a US property while living overseas
That said, keeping a property can have an impact on your taxes. You’ll still have to pay any property taxes associated with it and keep in mind that you can’t exclude any rental income under the Foreign Earned Income Exclusion since that income is passive, not earned. And if you’re a tax resident of another country, they may require you to report and pay taxes on your worldwide income — which would include US property rental income.
The good news is you can often avoid double taxation with the Foreign Tax Credit, which gives you credits for any foreign income taxes you’ve paid to apply toward your US tax bill.
References
- Do You Need a Physical Address for Your Small Business?
- How to open a bank account in the US without address proof?
- What expats need to know about Brokerage Accounts for non-US residents
- Can I become a state resident by using your mailbox service?
- VOTING & REPRESENTATION INFORMATION
- How to Determine Your Voting Residency
- Change of Address Checklist: Who to Notify When You Move
