Figures relate to tax year 2026 (US) · 2026-27 (UK)
Most of what you can do about your American tax bill stops being possible on 31 December. Not at the filing deadline, and not in April.
So the weeks before year end are the only ones where a decision still changes the number.
Four or five levers matter, and the rest is record keeping.
Key takeaways
- The American year ends on 31 December and the British one in April.
- A December decision lands in this American return and next British one.
- The exclusion against the credit is still an open choice.
- Timing a bonus or a disposal moves it between years.
- Charitable giving works differently in each country.
- Quarterly estimates can still be fixed in January.
- Pension contributions are a British lever, not an American one.
- Some things closed months ago and cannot be recovered.
What about selling investments?
The date of a disposal is genuinely yours to pick, which makes it the most controllable lever you have. Selling on 29 December puts the gain in this American year, and selling on 2 January puts it in the next one. Britain sees both in the same British year.
Our guide to UK capital losses for US citizens covers the British side.
A disposal in early April straddles both British years instead.
Do pension contributions help the US side?
Almost never, and this disappoints people every December. A contribution to a British scheme reduces British tax, which reduces your foreign tax credit, so part of the saving reappears as American tax. The lever is real and it works on only one side.
Our guide to employer pension contributions covers the treatment.
British pension planning runs to April, not December.
What about a Roth conversion?
The calendar year is the deadline, so a conversion has to happen by 31 December to count for this year. For somebody with little American tax to pay, converting at a low rate can be attractive. The British treatment needs checking first.
Our guide to US retirement accounts in the UK covers the accounts.
There is no undoing a conversion once the year closes.
Does charitable giving help before year end?
In America, a gift to a qualifying charity is deductible in the year you make it, and most British charities do not qualify. In Britain, gift aid relief works on your British year and extends your basic rate band. Two systems, two sets of eligible bodies.
Our guide to charitable giving across the two systems covers the detail.
Dual qualified charities exist and are worth seeking out.
Does a year end bonus change the picture?
A December bonus lands in this American year and pushes your British income up in the same British year. So it can tip you into the allowance taper here while also raising the American figure. Both effects arrive at once.
Our guide to the personal allowance taper covers the British side.
Ask payroll when the bonus actually pays, not when it is announced.
Should you move income into next year?
Only if the rate is genuinely lower there, which for an expat usually turns on the credit rather than the brackets. Deferring a bonus from December to January moves it across both an American year and a British quarter. Work out both effects before asking.
Our guide to UK bonus payments and US tax covers bonuses.
Most employers will not move a bonus for one employee.
Does a new child change the year?
A child born at any point in the calendar year counts for the whole of it, which is unusually generous. A birth on 30 December gives the same credit as one in January. The child needs a tax number before you claim.
Our guide to the child tax credit abroad covers the claim.
Apply for the number early, because it is slow.
Can you still fix your estimates?
Partly, because the final quarterly payment is due in January. Somebody who has underpaid through the year can reduce the interest charge by paying then, even though the earlier quarters are gone. It is damage limitation rather than planning.
Our guide to estimated tax payments from the UK covers the schedule.
Withholding counts as paid evenly whenever it happened.
Does year end matter for FBAR?
Only in that the reporting period ends with it. The filing looks at the highest balance in each account across the calendar year, so a December transfer between your own accounts can raise the reported total without changing your wealth at all.
Our guide to FBAR signature authority covers the rules.
Moving money between your own accounts double counts the peak.
Should you open accounts before year end?
Waiting until January keeps a new account out of this year's reporting, which is a small simplification rather than a saving. The threshold tests look at the whole year, so an account opened on 30 December counts for the entire period.
Our guide to Form 8938 reporting covers the asset form.
Closing an account before December does not remove it either.
What is already too late?
Anything that depended on an earlier quarter or an earlier British event. Underpaid estimates for the first three quarters cannot be undone, a disposal already made cannot be unmade, and a contribution missed in the last British year has gone. Honesty about that saves effort.
Our guide to first time penalty abatement covers the aftermath.
Note them down for next year rather than brooding.
What about state tax?
A state that still claims you follows the calendar year too, so the same December deadline applies there. Somebody who left America without severing ties properly should look at this before the year closes rather than after.
Our guide to state tax for expats covers the stubborn states.
No state follows the British April year.
What should a couple look at together?
Which of you holds which asset, and whose return a disposal lands on. Where one spouse is not American, holding investments in their name keeps the gain outside the American system entirely. That is a decision for before the sale.
Our guide to a nonresident alien spouse covers mixed couples.
Transfers between spouses need care in both systems.
A worked example
Take an illustrative case. An American in Manchester plans to sell shares worth a substantial gain.
Selling in December puts the gain in the 2026 American year, where she has unused foreign tax credit sitting idle.
Selling in January puts it in 2027, where she expects none.
The same sale, six days apart, produces a different American bill entirely, and Britain taxes it identically either way.
Is it worth paying for advice in December?
Where a sale, a move or a large bonus is in play, usually yes, because those decisions cannot be revisited in April. For a steady salaried year with nothing unusual, a December review rarely changes anything. The events decide it.
Our guide to a second opinion on an expat return covers reviewing past years.
Advice before a decision beats advice after one.
How long does a year end review take?
An hour or two, if your records are in order. Most of that is modelling the exclusion against the credit, which is a single calculation with a clear answer. The rest is deciding what to do about it.
Our guide to choosing a US-UK tax accountant covers getting help.
Book it in November rather than late December.
What should you gather now?
Payslips for the calendar year, any broker statements, records of every disposal, and a note of days spent in each country. Those four are what the return is built from, and all of them are easier to find in November than in June.
Our guide to exchange rates on a US return covers conversion.
A folder started now saves a day of work later.
What does year end actually close?
Your American income, deductions and credits for the calendar year. According to IRS guidance for citizens abroad, the return you file next spring reports January to December, so anything that happens after the thirty first lands in a different year entirely. The British year carries on regardless.
Our guide to the UK tax year difference covers the mismatch.
One deadline is eight weeks away and the other is five months.
Why is year end the right moment to look?
Because almost every useful lever has a date on it. In April you are recording what happened, and in November you can still change some of it. That difference is worth a single afternoon once a year.
Our guide to US tax deadlines for expats covers the dates.
The filing deadline is not the planning deadline.
What if you moved countries this year?
Then this is the most important December of your filing life. A move splits the British year and not the American one, so the figures need assembling now while the records are fresh. Waiting until April makes it considerably harder.
Our guide to split year treatment covers the British side.
Gather payslips from both countries before the year turns.
What if you are about to leave Britain?
Then the order of events matters more than usual. Leaving in December rather than April changes which British year the departure falls in and what reliefs still apply. A few weeks either way can be worth a lot.
Our guide to leaving the UK for a third country covers the move.
Decide the departure date with both calendars in view.
Does the British side need doing now?
Not urgently, because you have until April for most British levers and until January for the return itself. The one thing worth doing now is gathering records, since the American return needs British figures and chasing them in March is miserable.
Our guide to registering for Self Assessment covers the British return.
The January British deadline is for last year, not this one.
Is the exclusion still a live choice?
Until you file, yes, and it is the largest single decision on the return. The exclusion covered up to $130,000 of earnings for 2025 and suits a modest salary, while the credit usually suits a higher one taxed at 40% here. Modelling both before year end tells you what else to do.
Our guide to Form 2555 and the exclusion covers the claim.
Revoking the exclusion locks you out for five years.
What still works and what has gone
| Lever | Still open in December | Notes |
|---|---|---|
| Exclusion or credit choice | Yes | Open until you file |
| Timing a bonus | Sometimes | Depends on the employer |
| Timing a disposal | Yes | You control the date |
| Charitable gifts | Yes | Different rules each side |
| Quarterly estimates | Partly | January payment still helps |
| Pension contributions | British only | No US relief here |
Does the exclusion day count close too?
The qualifying period runs on its own dates rather than the calendar, which catches people in a moving year. Somebody a few days short of the physical presence test can sometimes fix it by adjusting travel in December. Count before you book anything.
Our guide to the first year choice election covers part years.
A Christmas trip home can break a day count.
What about unused foreign tax credit?
Surplus credit carries forward for ten years and back for one, so a year with spare credit is a good year to realise income. That is the single most useful thing to check before December. Most people never look.
Our guide to foreign tax credit carryovers covers the carryover.
Credit that expires unused is simply lost.
Should you prepay anything?
Rarely, because the American reliefs an expat uses are not expense based. Prepaying British tax does not accelerate a credit, since the credit follows the year the tax relates to. So the usual domestic tricks do not transfer.
Our guide to paying the IRS from the UK covers settling a bill.
Timing the payment changes nothing about the credit year.
Is anything different this year?
Figures move every year and the structure does not. Thresholds, the exclusion cap and the housing limits all shift, so check the current numbers rather than last year's. The decisions themselves stay the same ones.
Our guide to US filing thresholds for expats covers the figures.
Never plan from a figure you remember.
Does the year end matter if you owe nothing?
Less, but not nothing. Somebody whose bill is zero still wants the credit carryover recorded and the day count safe. Those two things protect future years, and both are decided before December closes.
Our guide to Form 1116 income baskets covers the credit.
A nil year can still build something useful.
How to use the weeks before year end
- Model the exclusion against the credit for this year.
- List any disposal you could move either side of 31 December.
- Ask whether a bonus can shift, and accept it usually cannot.
- Check your foreign tax credit carryover position.
- Decide on charitable gifts for each country separately.
- Work out whether a January estimate reduces the interest.
- Count your days if the exclusion is close.
- Start the folder of payslips and statements now.
Mistakes and penalties we see at year end
The first is making a large British pension contribution in December expecting an American saving that never arrives.
The second is selling in early January without checking whether unused credit was about to expire.
The third is moving money between your own accounts in December and inflating the reported account peak.
The fourth is leaving a borderline day count to chance and losing the exclusion over a Christmas trip.
How US UK Tax Accountants helps
We look at the two calendars together, because almost every December decision lands in this American year and next British one, and the two answers rarely agree.
Then we fix the exclusion or credit choice before anything else. Our US federal returns service covers the filing.
If a sale, a move or a bonus is coming, get in touch before the year turns.
Last reviewed 4 November 2026. This article is general information and not personal tax advice, and the right answer depends on your own figures.
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Get in TouchPrimary sources
Official guidance from the IRS, FinCEN and GOV.UK. Thresholds and rates on those pages are updated annually — check the current tax year before relying on a figure.
- IRS — US citizens and resident aliens abroad (opens in a new tab)
- IRS — Foreign earned income exclusion (opens in a new tab)
- IRS — About Publication 54, Tax Guide for US Citizens Abroad (opens in a new tab)
- IRS — Topic 409, Capital gains and losses (opens in a new tab)
- GOV.UK — Self Assessment deadlines (opens in a new tab)
